![]() ![]() Australia and # New Zealand Banking # Group Limited #### 2024 Annual Report ![]() #### Contents Overview Our 2024 reporting suite 1 Operating environment Our operating environment 2 Our purpose and strategy 4 How we create value 6 About our business 8 Governance Directors 10 Risk management 14 Performance overview 20 Remuneration report 34 Directors’ report 76 Financial report 79 Glossary 216 ![]() ## Our 2024 reporting suite Annual Report structure The various elements of the Directors’ Report, including the Operating and Financial Review, are covered on pages 1 to 32. Commentary on our performance overview contained on pages 20 to 32 references information reported in the Financial Report pages 79 to 215. The Remuneration Report on pages 34 to 75 and the Financial Report on pages 79to 215 have been audited by KPMG. This report covers all ANZBGL operations worldwide over which, unless otherwise stated, we had control for the financial year 1 October 2023 to 30 September 2024. Monetary amounts in this document are reported in Australian dollars, unless otherwise stated. #### ANZ Group #### HoldingsLimitedABN 16 659 510 791 2024 Full Year Results Announcement anz.com/results 2024 ANZGHL Annual Report anz.com/annualreport 2024 Corporate GovernanceStatement anz.com/corporategovernance 2024 Climate-Related FinancialDisclosures anz.com/annualreport 2024 Environment, Social and Governance (ESG) Supplement anz.com/annualreport Australia and NewZealand #### Banking Group Limited #### ABN 11 005 357 522 2024 ANZBGL Annual Report anz.com/annualreport 2024 September Quarter APS330Pillar III Disclosure anz.com/results 2024 United Kingdom DisclosureandTransparency RulesSubmission (when released) anz.com/results Disclaimer & important notices The material in this report contains general background information about the Group’s activities current as at 7th November 2024. It is information given in summary form and does not purport to be complete. It is not intended to be and should not be relied upon as advice to investors or potential investors, and does not take into account the investment objectives, financial situation or needs of any particular investor. These should be considered, with or without professional advice, when deciding if an investment isappropriate. Forward-looking statements This report may contain forward-looking statements or opinions including statements regarding our intent, belief or current expectations with respect to the Group’s business operations, market conditions, results of operations and financial condition, capital adequacy, sustainability objectives or targets, specific provisions and risk management practices. Those maers are subject to risks and uncertainties that could cause the actual results and financial position of the ANZBGL Group to dier materially from the information presented herein. When used in the report, the words ‘forecast’, ‘estimate’, ‘goal’, ‘target’, ‘indicator’, ‘plan’, ‘pathway’, ‘ambition’, ‘modelling’, ‘project’, ‘intend’, ‘anticipate’, ‘believe’, ‘expect’, ‘may’, ‘probability’, ‘risk’, ‘will’, ‘seek’, ‘would’, ‘could’, ‘should’ and similar expressions, as they relate to the Group and its management, are intended to identify forward-looking statements or opinions. There can be no assurance that actual outcomes will not dier materially from any forward-looking statements or opinions contained herein. Also see the Risk management section on pages 14to19 in relation to risks that may aect forward-looking statements, and the `Key Judgements and Estimates’ identified in various places in the Annual Report. Those statements are usually predictive incharacter; ormay be aected by inaccurate assumptions or unknown risks and uncertainties or may dier materially from results ultimately achieved. As such, these statements should not be relied upon when making investment decisions. These statements only speak as at the date of publication and no representation is made as to their correctness on or aer this date. No member of the ANZBGL Group undertakes any obligation to publicly release the result of any revisions to these forward-looking statements to reflect events or circumstances aer the date hereof to reflect the occurrence of unanticipated events. Climate-related information This report also contains climate-related statements. Those statements should be read with the important notices in relation to the uncertainties, challenges and risks associated with climate-related information in our 2024 Climate-related Financial Disclosures report available at anz.com/annualreport. 1 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() ## Our operating environment #### A range of influences characterise the #### current operating #### environment. Economies have coped relatively well with the sharp increases in interest rates over 2022 and 2023. Economic activity has slowed, but recessions have been rare and shallow. Unemployment in Australia and New Zealand has only modestly increased. The cumulative impact of rising prices and higher interest rates is sustaining cost of living pressures for consumers, but household balance sheets, in aggregate, are sturdy. Investment plans are generally robust, but resource availability is a challenge, not least because of similar wants across economies. Industrial policy has become more common, including in Australia, and is likely to reshape the structure of economic activity over time as governments address perceived supplychain vulnerabilities and prioritise domestic resilience. China’s economy is operating on a dierent cycle. Growth has moderated asthe economy adjusts to an ageing demographic and the demand mix changes. Trade is still growing despite geopolitical complexities. High commodity prices are sustaining exports from Australia and New Zealand. Asian exports have had a particularly strong year, backed by renewed strength in technology trade. The climate transition remains a subtext tomany of these developments. Resource access challenges feature here as well, asmany economies strive to invest in renewable energy, building retrofits and more climate-friendly transport. 2 Australia and New Zealand Banking Group Limited 2024 Annual Report ![]() #### Economic outlook Growth has slowed, but many central banks have begun to reduce interest rates. Inflation has proven to be slightly stickier inAustralia than elsewhere. Australia, therefore, is likely to follow with a modest easing cycle of its own, but not until 2025. Easing cycles are likely to only partially reverse the sharp interest rate rises of recent years. Private sector balance sheets, in general, arein solid shape, suggesting lower interest rates are likely to generate economic traction without needing to be too vigorous. The supply side of many economies remains challenged by influences including ageing workforces, housing constraints, and the influence of geopolitics and industry policy on supply chains. This is also encouraging more sustained government spending than has been the case in previous cycles. Policy in China has been gradually responding to reduce the risks of a sharper slowdown. Excessively low inflation has been the primary macroeconomic challenge. Further easing is likely as China adjusts to soer structural drivers of demand. An ageing demographic suggests a shi in the mix of activity over time, including in the commodity sector. These shis are likely to have some permanence. 1. Refer to our 2024 Climate-related disclosures report for more information and for glossary of terms available at anz.com/esgreport. Challenges Examples of how we’re responding Inflationary pressures andhigherinterest rates • Assessing borrowers’ resilience to rising interest rates • Focusing on cost management and delivering ongoing productivity benefits, including from technology simplification • Dealing appropriately with customers experiencing financial hardship or in need of extra care • Adjusting our sta salaries appropriately Public and regulatory scrutiny • Being transparent about how we are addressing regulatory and political concerns • Working cooperatively with regulators, government and non- governmental organisations (NGOs) • Continuing to evolve our ESG policies and processes, seek to implement them eectively and transparently disclose ourprogress Competitive bankingindustry • Operating a diverse business, continuing to invest and prioritise resources across Retail, Commercial and Institutional segments • Deploying new and improved digital services, products and processes to help meet customer needs for ecient and accessible banking • Investing in underlying technology and systems to establish more flexible and responsive platforms (including ANZ Plus and Institutional Payments and Cash Management Platforms) Cybersecurity threats • Ongoing investment in cybersecurity, fraud and scams detection capabilities • Increasing customer awareness and education as to the relevant risks Geopolitical tension • Contingency plans for our medium-to- higher risk jurisdictions with trigger eventsidentified and monitored • Continuing to review our international network and operations Climate change and nature 1 • Elevating climate to a Material Risk inNovember 2023 • Our Board approving our Group wide Climate and Environment Strategy in October 2024 • Supporting our customers’ transition through banking and finance products and services, such as sustainability- linked loans and ESG-format bonds, that help drive the transition to a low carbon economy 3 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 3 ![]() ## Our purpose and strategy #### Our purpose is to shape a world where people and communities thrive. It explains ‘why’ we exist and #### drives everything we do at #### ANZ, including the choices #### we make each day about #### those we serve and how #### we operate. Our aspiration is to build a simpler, beer,more purpose-driven bank, through: purpose-led propositions and partnerships that improve financial wellbeing, access to housing and sustainability for our target segments automated business-services supported by modern, cloud- based technology that is more open, ecient, resilient and compliant an agile operating model that encourages innovation and makes it easier for our people to deliver value forour customers quickly disciplined allocation of resources, enhanced delivery capabilities, and an alignment of systems andincentives. Through our purpose we have elevated three areas facing significant societal challenges aligned with our strategy and our reach, which include commitments to: Improving the financial wellbeing of our people, customers and communities by helping them make the most of their money throughout their lives; Supporting household, business and financial practices that improve environmental sustainability; and Improving the availability of suitable and aordable housing options forall Australians and New Zealanders. Save for, buy and owna liveable home Start or buy and sustainably grow theirbusiness Move capital and goods around the region and sustainably grow their business In particular, we want to help customers: We bring our purpose to life through our strategy: to improve the financial wellbeing and sustainability of customers through excellent services, tools and insights that engage and retain them, and help positively change their behaviour. 4 Australia and New Zealand Banking Group Limited 2024 Annual Report ![]() #### Our values are: I.C.A.R.E #### Integrity We are honest and fair by speaking openly and transparently, making thoughtful and balanced decisions, doing what’s right and acting with courage. #### Collaboration We work together for the customer, by geing the right people together to get the job done and helping each other. #### Accountability We take ownership and get things done – we do what we say we will do – find the solutions by testing and learning andact with determination. #### Respect We care for all those we serve. We value dierence andencourage everyone to have a voice, think and act with consideration for our customers, community and theenvironment. #### Excellence We challenge ourselves to be beer. This is done by making things simple, finding ways to work dierently, using data toimprove and asking for as well as acting on feedback. #### Our values Our values shape how we deliver our purpose-led strategy. They are the foundation of ‘how’ we work – living our values every day enables us to deliver on our strategy and purpose, strengthen stakeholder relationships and earn the community’s trust. All employees and contractors must comply with our Code of Conduct, which sets down the expected standards of professional behaviour and guides us in applying our values. 5 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 5 ![]() #### We create value for our stakeholders through the ‘Bank We’re Building’, #### developing propositions our customers love, with easy-to-use products and #### services that evolve to meet their #### changing needs. #### We dierentiate through our global network, thought leadership, and diversified retail, commercial and #### institutional customer businesses. ## How we create value Our customer propositions are enabled through our people and our technology, data and risk management: Supported by our balance sheet strength, our partnerships and reputation: Purpose and values-led people who drive value by caring about our customers and the outcomes we create. Flexible and resilient digital banking platforms powering our customers and made available for others to power the industry. Risk management framework and culture, establishing, overseeing and influencing how risk is considered in decision making. Partnerships that unlock new valuewith ecosystems that help customers further improve their financial wellbeing and sustainability. Strong balance sheet positions with access to capital, funding and liquidity to protect and grow our business. Reputation underpinned by trusted relationships with customers we choose to bank, our business partners and the community to strengthen our brand and reputation. 6 Australia and New Zealand Banking Group Limited 2024 Annual Report ![]() #### Strategy & #### businessmodel Transformation outcomes More targeted We support more of our chosen customers to achieve their goals, by using data to understand their needs. More engaged We improve our customers’ financial wellbeing and sustainability by connecting with them and providing valued solutions that meet their needs. More ecient We serve our customers more eciently to save themmoney and time by simplifying and automating ourprocesses. Beer protected We reduce the risk of doing business for our customers and for the bank, with systems that are less complex, less prone to error and more secure. More dynamic We respond more rapidly to the evolving environment, with adaptable people, systems andprocesses. #### Aiming to create value for our stakeholders Our customers will have relatively beer financial wellbeing. Our employees will be more engaged and with beer toolstosupport customers. Our shareholders will be rewarded with stronger long-term financial results (in terms of sustainable economic profits). Our community will benefit from our financial contribution (including taxes), practices and services, contributing to positive economic development. Beer access to capital and talent, driving greater capacity to invest well Beer data, insights,risk decisions andpricing Beer customer propositions that are purposeful, engaging, ecient and safe Beer customer engagement, and greater use of our products and services Beer financial wellbeing and sustainability outcomes for customers and thecommunity Beer financial outcomes for shareholders and sta Beer reputation among customers and the community, and higher workforce engagement Beer acquisition and retention rates, and higher share of target customers Our customers will have relatively beer financial wellbeing, more sustainable practices and generate higher average lifetime value 7 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 7 ![]() ## About our business Australia Retail 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 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: • T ransaction 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 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 On 31 July 2024, the Group acquired 100% of the shares in SBGH Limited, the immediate holding company of Suncorp Bank. The transaction was undertaken to accelerate the growth of the Group’s retail and commercial businesses while also improving the geographic balance of its business inAustralia. The 2024 reported results include two months’ results for Suncorp Bank from the date of acquisition, presented as Suncorp Bank division. 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 Provides support to the operating divisions, including technology, property, risk management, financial management, treasury, strategy, marketing, human resources, corporate aairs, and shareholder functions. It also includes minority investments in Asia. We operate across a diverse business structure 8 Australia and New Zealand Banking Group Limited 2024 Annual Report ![]() Asia China Hong Kong India Indonesia Japan Laos Malaysia The Philippines Singapore South Korea Taiwan Thailand Vietnam Pacific Cook Islands Fiji Kiribati Papua New Guinea Samoa Solomon Islands Timor–Leste Tonga Vanuatu Europe France Germany United Kingdom Middle East United Arab Emirates (Dubai) United States ofAmerica International 1. On a cash profit basis. Excludes non-core items included in statutory profit. It is provided to assist readers in understanding the result of the ongoing business activities of the Group. For further information on adjustments between statutory and cash profit refer to page 21. #### Our international presence and profit composition by geography 1 International $1,082 million Australia $3,596 million New Zealand $2,107 million 50 years in Singapore Singapore is Australia’s largest two-way trading partner and investor in Southeast Asia. It is Australia’s fih largest trading partner ($52.9 billion inrecent years) and fih largest source of foreign direct investment ($148.6 billion in 2022). As we mark 50 years in Singapore, it will not only underline the country’s importance toour strategy – but also as a crucial investment and trading partner for thewhole country. Read the full story at bluenotes.anz. com/posts/2024/may/anz-news- shayne-ellio-singapore-champion 9 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 9 ![]() ## Directors As at the date of this report, there are ten members on the Board of Directors of ANZBGL. Their names, positions within ANZBGL and relevant other directorships are described below. Richard Gibb and John Cincoa each joined the Board on 15 February 2024 as an Independent Non-Executive Director and Sco St John joined the Board as an Independent Non-Executive Director on 25 March 2024. Ilana Atlas, AO and John Macfarlane each ceased as an Independent Non-Executive Director on 21 December 2023, both having served on the Board since 2014. RT Hon Sr John Key, GNZM AC ceased as an Independent Non-Executive Director on 14 March 2024, having served on the Board since 2018. Relevant other directorshi p s C h ai rm a n : ANZGHL (from 2022), Sin g tel O ptus Pty Limited (from 2014, Director from 2004 ) and Western Sydney Airport C orporation ( from 2017 ). Deputy Cha i rman : S t Vin ce nt’ s H ea lth Australia ( from 2024, Director from 2019 ) . R elevant former directorshi p s h eld in last three y ears includ e F ormer D i rector: C oca- C ola Amatil (2017-2021) and Indara Di g ital I nfrastructure (formerly Australian Tower N etwork Pty Ltd ) ( 2021-2023 ) . Relevant other directorships D i rector : ANZGHL ( from 2022 ) , ANZ Bank New Zealand Limited ( from 2009 ) , Norfina Limited (Suncor p Bank) (from 2 024 ) , the Financial Markets Foundation for Children ( from 2016 ) and the Sydney Marae Alliance ( from 2023 ) . M em b er: Business C ouncil of Australia ( from 2016 ) , the Australian Bankin g Association ( from 2016, Chairman 2 017- 2019 ) and the Australian C ustoms Advisory Board ( from 2020 ). Shayne Ellio Postion Chief Executive Ocer, Executive Director since January 2016 Paul O’Sullivan Postion Chairman, Independent Non-Executive Director since November 2019 10 Australia and New Zealand Banking Group Limited 2024 Annual Report ![]() R elevant other directorshi p s D i rector: Norfina Limited ( Suncorp B ank ) ( from 2024 ) . R elevant former d i rectorsh i ps h eld in last three years include Former D i rector: Barrenjoey C apital Partners G roup Holdings Pty Limited ( 2020-2024 ) . John Cincoa Postion Independent Non-Executive Director since February 2024 R elevant other directorshi p s D i r ector : ANZGHL ( from 2024 ). R elevant former directorshi p s h eld in last three y ears include Former D i rector: C redit S uisse ( Australia ) Limited ( 2019-2024 ) . Richard Gibb Postion Independent Non-Executive Director since February 2024 R elevant other directorships C h ai rm a n : Norfina Limited (Suncor p B ank ) ( from 2024 ) , Executive Board of t he Institute of Health Metrics and E va l uation at t h e U niversity o f W ashin g ton ( from 2024, Member from 2 007) and Coalition for Epidemic P re p aredness Innovations ( Norwa y) ( from 2018, Member from 2016 ) . Dir ector : ANZGHL ( from 2022 ) and C layton Utz ( from 2017 ) . Honorar y Professor: A us tr a li a n N ational Universit y Research School of P syc h o l ogy. A d j unct Professor: University of Sydney a nd University of Canberra. R elevant former directorships h eld in last three y ears include F o rm e r C h ai rm a n : Vault Systems ( 2017-2022) and Council on the A g ein g A ustralia ( 2017-2024 ) . F o rm e r D i r ec t o r : C r o wn R eso rt s Limit ed ( 2018-2022) and Naval Group Australia Pty Ltd ( 2021-2022 ) . F o rm e r M e m be r : N a ti o n a l CO VID-1 9 C ommission Advisory Board (2020- 2 021 ) . F o rm e r Cou n ci l M e m be r : A us tr a li a n S trate g ic Policy Institute (2016-2023). Jane Halton, AO PSM Postion Independent Non-Executive Director since October 2016 11 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() Relevant other directorshi p s Cha i rman : Australia Pacific Air p orts C or p oration ( from 2024 ) . Dir ec t o r : A NZGHL ( from 2022 ) , Norfina Limited ( Suncorp Bank ) ( from 2024 ) , BHP G roup Limited ( from 2020 ) and Infrastructure Victoria ( from 2023 ). R elevant former directorships h eld in last three years includ e F ormer D i rector: M e d i b an k P rivate L imited ( 2014–2021 ) , The Baker Heart & D iabetes Institute ( 2013-2023 ) and Stockland ( 2018-2024 ) . Christine O’Reilly Postion Independent Non-Executive Director since November 2021 Relevant other d i rectorsh i ps Cha i rman: R egis H ea l t h care L imite d ( Director from 2017, Chairman from 2 018 ). D i rector : A ssemble C ommunities ( from 2020 ) . Relevant former directorships held i n last three years i nclud e Dir ec t o r : AmBank Holdin g s Berhad ( 2016-2021 ) . Graham Hodges Postion Non-Executive Director since February 2023 Relevant other directorshi p s C h ai rm a n : Susa n M c Kinn o n F ou n da ti o n Advisory Board (from 2024). Pres i dent: F ederal Remuneration Tribunal ( from 2024 ) . Dir ec t o r : ANZGHL ( from 2023 ) , Woolworths Grou p Limited ( from 2016 ) and Fonterra C o-operative G roup Limited ( from 2020 ) . Member : Board Advisor y G rou p , Bain & C om p an y (from 2021). Se ni o r A d vi so r : Pollination ( from 2023 ) . Relevant former directorshi p s held in last three years includ e F o rm e r C h ai rm a n : Lendi G roup ( 2020-2021 ) . Former D i rector: A bacus G roup Holdings ( 2018-2022 ) and Endeavour Group Limited (2021-2023) . Former Pro C hancellor : Western Sydney University (2018-2024) . Holly Kramer Postion Independent Non-Executive Director since August 2023 12 Australia and New Zealand Banking Group Limited 2024 Annual Report ![]() R elevant other d i rectorsh i ps D i rector: ANZGHL ( from 2022 ) , ANZ G roup Services Pty Ltd ( from 2022 ) , S onrai Security Inc. (from 2021) and P exa Australia Limited ( from 2023 ) . A dv i sor: Zoom Video C ommunications , I nc ( from 2018 ) , Box, Inc ( from 2018 ) and World Fuel Services ( from 2023 ). Je Smith Postion Independent Non-Executive Director since August 2022 C h ai rm a n : ANZ Ba n k Ne w Zeala n d L imited ( from 2024, Director from 2021 ) a nd Mercur y NZ Limited (from 2024, D irector from 2017 ). Dir ector : ANZGHL ( from 2024 ) and the N EXT Foundation ( from 2017 ) . Relevant former directorshi p s held in last three years includ e F o rm e r C h ai rm a n : Fisher & Pa y kel Healthcare Corporation Limited ( 2020-2024, Director from 2015 ) . Former D i rector: Fonterra C o-o p erative G roup Limited (2016-2024) . Sco St John Postion Independent Non-Executive Director since March 2024 13 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() ## Risk management Constant changes and uncertainties in the macroeconomic environment, climate change and evolving geopolitical tensions continue to pose challenges to our operating conditions. We understand that our customers are similarly aected by these as well as additional challenges such as experiencing increasing fraud and scams activities. We continueto strengthen our risk management framework and practices to meet such challenges. #### External environment The Group’s financial performance is closely linked to the political, economic and financial conditions in the countries and regions in which ANZ, its customers and its counterparties carry on business. The current external environment is shaped by significant global events particularly geopolitical conditions and climate change that impact economic stability, regulatory environments and financial markets. • Geopolitical risk: Elections, conflicts, and increasing US – China competition have dominated the geopolitical environment this year. Conflict in the Middle East and Europe continue to impact regional security and supply chains and have increased market volatility. Meanwhile, economic security policymaking has accelerated as large economies vie for influence, resources, and industrial expansion. These dynamics are reshaping trade and investment flows, yetthe swi adaptation of these flows underscores the resilience of the international system. ANZ established a Geopolitical Risk function in 2021, which provides quarterly updates to key risk commiees, works with country teams to monitor and manage regional risks, and this year expanded to provide more analysis and advice to management on fast-moving developments. • Climate risk: In November 2023, the Board Risk Commiee approved climate risk as a material risk within ANZ’s risk management framework. Climate risk is also considered to be a driver of other risks within our risk management framework. Work is progressing to integrate and embed climate risk into the Group’s risk management framework through existing policies, processes and governance frameworks. It is anticipated that this will be a multi-year journey, recognising the complexities and challenges that arise from an evolving regulatory landscape, limitations on the availability of and access to reliable and consistent data, and the need to upli systems, tools, and capability across the Group. For details on our approach to managing climate risk and actions we are taking aspart of our Net-Zero Banking Alliance commitment, refer to our 2024 Climate-related Financial Disclosures available at anz.com/annualreport. OurClimate Change Commitment is available at anz.com/esgreport. • T echnology Disruption and Change: ANZ serves a diverse customer base, including retail, small business, corporates, multinational institutions, and other financial institutions. We tailor our digital channels and products to meet their varying needs. Our payments services process payments in 29 markets and annually we serve more than 10 million customers, facilitating over seven billion payments and capital flows. The pace of change continues toaccelerate driven by the dynamic regulatory landscape, increased technology disruption from both traditional and non-traditional competitors and industry-driven changes (such as decommission in legacy clearing streams (BECS & Cheques); Confirmation of Payee, faster payment adoption through Asia–Pacific, ISO20022). This level of change and disruption necessitates ongoing vigilance regarding our enhanced operational resilience, innovation and compliance capabilities. We are continually adapting our processes and systems to meet these evolving requirements, ensuring that we remain agile and responsive to the evolving regulatory, competitive, customer and technological demands. 14 Australia and New Zealand Banking Group Limited 2024 Annual Report ![]() In addition, economic instability including elevated interest rates, inflationary pressures and higher cost of living continue to increase financial stress for some customers. While households and businesses have been largely resilient to date, the Board and management continually monitor these developing conditions to set appropriate risk criteria for a range of potential scenarios. We will continue to carefully manage our capital and risk appetite seings so we can continue to support our customers. #### Suncorp Bank integration On 1st August 2024, we welcomed ~3000Suncorp Bank employees and 1.2 million customers into the ANZ Group. We believe this acquisition will bring significant public benefits and create a stronger, more competitive bank that will beer serve our customers. Suncorp Bank has acomprehensive risk management framework and policies that operate eectively. Through the establishment of the Suncorp Bank Board, and in line with commitments made, Suncorp Bank has its own dedicated Management and Board Risk Commiees. Work is in progress to ensure asmooth transition of risk management frameworks and policies, and eective integration into the ANZ risk management operating model. #### Non-financial risk During the year APRA required ANZ to holdan additional operational risk capital overlay of $250 million (total $750 million) from 30thSeptember 2024. This increase was a result of APRA viewing ANZ as having made insucient progress in addressing weaknesses in non-financial risk management. These concerns were heightened following a number of recent issues relating to our Markets business. While there has been a lot of work already completed in upliing our approach to non-financial risk management, there is still more to do, and ANZ remains commied to geing that work done as soon as possible. This includes the adoption of a consistent, simplified, bank-wide methodology and framework, from a technology, reporting, and culture perspective. Financial crime We maintain a financial crime risk management program that anticipates and navigates criminal threats. The Financial Crime portfolio continues to be responsible for ensuring that ANZ meets its regulatory obligations through its Anti-Fraud Policy, Anti-Money Laundering/ Counter Terrorism Finance and Sanction Programs for delivering detection, investigative and intelligence capability focused on identifying, mitigating, and managing financial crime risk to help protect the community. We also maintain our partnership with the Australian Transaction Report and Analysis Centre (AUSTRAC)-led Fintel Alliance to increase the resilience of the financial sector to prevent exploitation by criminals, and support investigations into serious crime and national security. Scams ANZ continues to invest significantly as part of its fight to help protect customers and the community from scams and other financial crimes. In 2024, ANZ has prevented more than $140 million of customer funds going to cybercriminals and total ANZ customer scam losses decreased compared to the previous year. This is partly due to increased friction we have put in place to slow down the payment process for high-risk payments. We also rely on our enhanced Falcon technology to detect more suspicious transactions. Our latest measures for ANZ Classic customers include the introduction of a dedicated team of specialists who handle calls about fraud and scams, a new Scam Scoring model that uses AI to boost our scam detection, and a Mule Detection model to detect mule accounts and restrict the movement of scam proceeds. We also increased personalised warning messages on Internet Banking when a transaction or activity is considered high risk. For ANZ Plus customers, we introduced a suite of scam safe features including screen share protection from scammers, location-based security, risky-app detection, crypto limits and active call status to detect coaching from scammers. We delivered various education initiatives to improve scam confidence and service capability for our bankers and customers. This included for example, new and enhanced content on ANZ’s security hub on anz.com, messages and alerts in ANZ’s digital channels, and the creation of new mandated security content for frontline employees to support customer engagement on security. We also added a new scams education module to ANZ’s flagship financial education program, MoneyMinded, which equips community professionals with resources to support their clients identify and protect themselves from scams. #### Emerging risks ANZ manages and monitors risks in accordance with our Risk Management Framework (RMF). In addition to our material risks – see below – two emerging risks that we are paying particular aention to are: Nature: We consider that our most material nature risks can arise from lending to customers that have material impacts and/ or dependencies on nature. These risks can also arise from legal and regulatory changes, which may impact ANZ directly or indirectly through our customers. Failure to manage these risks may lead to financial and non-financial risks to ANZ. We acknowledge the need to protect and restore nature and mitigate biodiversity loss including as a result of species extinction or decline, ecosystem degradation and nature loss. We are seeking to understand the impacts and dependencies nature can have on our customers, including how customers are managing and mitigating material risks and impacts. For details on our approach to managing nature risk refer to our 2024 Climate– related Financial Disclosures available at anz.com/annualreport. Our Climate Change Commitment is available at anz.com/esgreport. Artificial Intelligence (AI): At ANZ, we recognise the opportunity of using AI to help shape a beer world where communities thrive. AI has the potential to drive significant innovation and eciency in our operations, leading to enhanced customer experiences and business growth. With this opportunity comes the need to act responsibly to mitigate the potential risks associated with use of AI. ANZ is adapting our governance and risk management frameworks to ensure that AI is adopted safely, in pace with evolving regulatory standards and the expectations of our customers. 15 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() #### Risk culture Risk culture is an important component ofour organisational culture and underpins the shared values, behaviours and practices that influence how risk is considered in decision making. ANZ remains commied to strengthening risk culture, supporting the Group to meetthe evolving expectations of our customers, the community and regulators. Having achieved the target state in 2023, the enterprise’s risk culture has not met expectations of continuous improvement in 2024. Notwithstanding the strength in managing the Group’s financial risks across credit, market, capital, and liquidity, regulatory concerns around our Markets business and non-financial risk management are earnestly under review, ensuring learnings are captured to support improvement of risk management behaviours and practices where appropriate. Risk culture is actively monitored anddriven across the Group through completion of risk culture plans, enterprise-wide awareness activities and the continued focus on delivery of the Group wide non-financial risk framework. Risk culture is embedded in annual performance and remuneration, and recognition programs such as Risk RoleModels (see section 6 of the Remuneration Report). #### Our Risk Management #### Framework (RMF) The Board is ultimately responsible for establishing and overseeing the ANZ Group’s RMF which is supported by the Group’s underlying systems, structures, policies, procedures, processes and people. The Board has delegated authority to the Board Risk Commiee (BRC) to develop and monitor compliance with theGroup’s risk management policies. The Commiee reports regularly to the Board on its activities. The key pillars of ourGroup RMF include: • The Risk Management Strategy (RMS) which isa critical element of the Group’s RMF. The RMS includes: how the risk function is structured to support the Group’s purpose and strategy, and the execution of the Group Chief Risk Ocer’s prescribed responsibilities as an Accountable Person under the Financial Accountability Regime; the values, aitudes and behaviours that support risk decision-making in delivering on strategic priorities and a Board approved target risk culture; a description of each material risk; and an overview of how the RMS addresses each material 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 the material risks and the oversight mechanism and/or commiees in place. • The Risk Appetite Statement (RAS), conveys, for each material risk, the maximum level of risk the Group is willing to accept in pursuing its strategic objectives and its operating plans considering its shareholders’, depositors’ and customers’ interests. • Risk Principles support the RMF and outline the behaviours and practices that are expected to be applied to guide risk management and help to instil an appropriate risk culture across the Group. The Group operates under the Three Lines-of-Defence Model. Each line of defence has clearly defined roles, responsibilities and escalation paths to support eective risk management at ANZ. The three lines of defence model embeds a culture where risk is everyone’s responsibility. The business and enablement functions form the first lines-of-defence and are responsible for the implementation and ongoing maintenance of the RMF including day-to-day ownership of risksand controls. The Risk function forms the second line of defence, providing independent oversight of the Group’s risk profile and RMF, including eective challenge to activities and decisions that materially aect the Group’s risk profile and working with the first line, in developing and maintaining the RMF. Internal Audit is the third line of defence, providing independent evaluation andobjective assurance on the appropriateness, eectiveness and adequacy of the Group’s RMF. The governance and oversight of risk management, while embedded in day-to-day activities, is also the focus of commiees and regular forums across thebank (see diagram next page). The commiees and forums discuss and monitor known and emerging risks, review management plans and monitor progress to address known issues. 16 Australia and New Zealand Banking Group Limited 2024 Annual Report ![]() Ex ecu tiv e Co mmi ee A NZ’ s m os t se ni o r e x ecu tiv es m ee t regularly to discuss performance a n d review s h are d initiatives. Enterprise Accountab i l i ty G rou p Group Performance Execution Commiee A NZ’s key Mana g ement Commiee char g ed with oversight of the G roup’s overall operational performance a n d position an d execution o f t h e operating p l an. Principal Board C ommiee s G rou p Divisio n C ountr y Credit Ratin g s S ystem O versight Co mmi ee C a p ital and S tress Testing O versi g ht Co mmi ee Fin a n c i a l C rim e O RE C S ub- C ommiee Re g ional or C ountry Risk Management Co mmi ees Country Asset s and Liability C ommiee s C redit and Market Risk Co mmi ee G roup Asset a nd Liability Co mmi ee O perational Risk Executive Co mmi ee ( OREC ) E t h ics an d R esponsible Bus in ess Co mmi ee I nvestment C ommiee G roup Executive People Co mmi ee D ivisional / Fu n c t io n a l Accountab i l i ty G rou p s D ivi s i o n al Initiatives Review C ommiees / Project Advisory Cou n c il s Divisional Risk Mana g ement Co mmi ees Audit Commiee Ethics, Environment, Social and Governance Commiee Risk Commiee Digital Business and Technology Commiee Nomination and Board Operations Commiee People and Culture Commiee #### Board of Directors #### Key Management Commiees 17 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() The material risks facing the Group per the Group’s RMS, and how these risks are managed, are summarised below. Risk type Description Managing the risk Capital Adequacy Risk The risk of loss arising from the Group failing tomaintain the level of capital required by prudential regulators and other key stakeholders (shareholders, debt investors, depositors, rating agencies, etc.) to support the Group’s consolidated operations and risk appetite. We pursue an active approach to Capital Management, which is designed to protect the interests of depositors, creditors and shareholders through ongoing review, and Board approval, of the level and composition of our capital base against key policy objectives. Credit Risk The risk of financial loss resulting from: • A c ounterparty failing to fulfil its obligations; or • A decrease in credit quality of a counterparty resulting in a loss. Our Credit Risk framework is top down, being defined by credit principles, policies and requirements. Credit policies, requirements and procedures cover all aspects of the credit life cycle from initial approval and risk grading, through to ongoing management and problem debt management. Liquidity and Funding Risk The risk that the Group is unable to meet its payment obligations as they fall due, including: • Repaying depositors or maturing wholesale debt; or • The Group having insucient capacity to fundincreases in assets. The Group recognises the inherent liquidity andfunding risk in the balance sheet and has established a set of key principles, to mitigate andcontrol liquidity and funding risk. Our framework is top down, being defined by liquidity principles and policies. A liquidity limit framework is in place with liquidity limits set based on a liquidity stress testing framework. Market Risk The risk stems from our trading and balance sheet activities and is the risk to the Group’s earnings arising from: • Changes in interest rates, foreign exchange rates, credit spreads, volatility, correlations; or • Fluctuations in bond, commodity or equity prices. We have a detailed market risk management and control framework which includes incorporating an independent risk measurement approach to quantify the magnitude of market risk within the trading and balance sheet portfolios. This approach identifies the range of possible outcomes, that can be expected over a given period of time, and establishes the likelihood of those outcomes and allocates an appropriate amount of capital to support these activities. Strategic Risk Strategic Risk is defined as the risk that internal or external factors prevent the Group from achieving the key strategic goals that are core to its operations through introduced risk due to strategy changes, failure to execute the strategy eectively, or a failure to adapt the strategy in response to changing environments and requirements. Strategic risk may arise from factors such as changes in the environmental context, failure to meet strategic targets, and the introduction of new or heightened risks resulting from strategic adjustments. Strategic risks are discussed and managed by the Executive Commiee (ExCo) through the Group strategic planning process. Additionally, we monitor delivery risk associated with High Impact change initiatives and undertake risk assessments prior to execution of our strategic changes. ## Material risks 18 Australia and New Zealand Banking Group Limited 2024 Annual Report ![]() Risk type Description Managing the risk Climate Risk Climate risk includes: • Physical risk – arising from both longer-term changes in climate (chronic risk) as well as changes to the frequency and magnitude ofextreme weather events (acute risk). Examples ofchronic physical risk drivers include rising sea levels, rising average temperatures and ocean acidification. Examples of acute physical risk drivers include heatwaves, floods, bushfires andcyclones; • Transition risk – arising from the transition to a lower emission economy, including changes in domestic and international policy and regulatory seings, technological innovation, social adaptation and market changes; or • Liability risk – in the form of potential litigation or regulatory action that may arise as a consequence of afailure to adequately consider or respond to the impacts of climate change (including physical and transition risks). This includes for example, the risk of greenwashing, which may arise where an entity is alleged to have misrepresented its climate-related risks, business credentials orstrategies. Following the elevation of climate risk to a material risk in November 2023, work is progressing to integrate and embed climate risk into the Group’s risk management framework through existing policies, processes and governance frameworks. While climate risk can be a driver of credit risk through lending to our customers, it may also result in other financial risks, e.g. market risk Climate risks can also be a driver of non-financial risks including conduct risk, regulatory risk and operational resilience risk. Climate-related financial and non-financial risks are managed through the risk management strategies associated with these risks. In 2024, we identified insurability risk as an emerging risk to the Group and are seeking to further understand the potential risks and impacts to our customers. Non-Financial Risk Non-Financial Risk (NFR) is the risk of loss and/ or non-compliance (including failure to act in accordance with laws, regulations, industry standards and codes, and internal policies) resulting from inadequate or failed internal processes, people, system and/or data, or fromexternal events. The Group manages NFR in accordance with the industry-wide Operational Risk Exchange (ORX) taxonomy, of16 ‘Risk Themes’, noting some of these present a higher inherent risk to the Group such as Conduct, Data, Financial Crime, Information Security (including Cyber), Regulatory and Technology. The Group’s strategy for evolving NFR management provides a planned and proactive approach to improving the Group’s NFR management. The NFR strategy is being operationalised through the NFR Framework, which has been designed to enable the Group to holistically, consistently and eectively identify, assess, remediate, monitor and report on NFR. For further information about the principal risks and uncertainties that the ANZBGL Group faces, refer to Principal Risks and Uncertainties section contained within the ‘2024 United Kingdom Disclosure and Transparency Rules Submission’ available at anz.com/shareholder/centre/reporting/regulatory-disclosure/ 19 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() ## Performance overview #### Group performance The results of the Group’s operations and financial position are set out on pages 20-32. Pages 2-9 outline the Group’s strategy and prospects. Discussion of our approach to risk management, including a summary of our key material risks, is outlined on pages 14-19. Discussion or disclosure of further business strategies and prospects for future financial years has not been included in this report because, in the opinion of the directors, it would be likely to result in unreasonable prejudice to the Group. #### Group profit results 2024 2023 1 Statutory Cash Statutory Cash Income Statement $m $m $m $m Net interest income 16,037 16,037 16,568 16,568 Other operating income 4,484 4,746 3,910 4,344 Operating income 20,521 20,783 20,478 20,912 Operating expenses (10,669) (10,669) (10,087) (10,087) Profit before credit impairment and income tax 9,852 10,114 10,391 10,825 Credit impairment (charge)/release (406) (406) (245) (245) Profit before income tax 9,446 9,708 10,146 10,580 Income tax expense (2,816) (2,888) (2,945) (3,072) Non-controlling interests (35) (35) (28) (28) Profit attributable to shareholders of the Company 6,595 6,785 7,173 7,480 1. On 1 October 2023, the Group adopted AASB 17 Insurance Contracts and restated 2023 comparative information. Refer to Note 1 About our financial statements for further details. Statutory profit attributable to shareholders of the Company for the year decreased $578 million on the prior year to $6,595 million. The Group uses cash profit, a non-IFRS measure, to assess the performance of its business activities. It is an industry-wide measure which enables comparison with our peer group. We calculate cash profit by adjusting statutory profit for non-core items. In general, it represents the financial performance of our core business activities. We use cash profit internally to set targets and incentivise our Senior Executives and leaders through our remuneration plans. Refer to page 21 for adjustments between statutory and cash profit. The adjustments made in arriving at cash profit are included in statutory profit which is subject to audit within the context of the external auditor’s audit of the 2024 Financial Report. Cash profit is not subject to audit by the external auditor. Our external auditor has informed the Audit Committee that adjustments between statutory and cash profit have been determined on a consistent basis across each of the periods presented. Suncorp Bank acquisition On 31 July 2024, the Group acquired 100% of the shares in SBGH Limited, the immediate holding company of Suncorp Bank. Suncorp Bank provides banking and related services to retail, commercial, small and medium enterprises and agribusiness customers in Australia.The transaction was undertaken to accelerate the growth of the Group’s retail and commercial businesses while also improving the geographic balance of its business in Australia. The 2024 reported results include 2 months results for Suncorp Bank from the date of acquisition, presented as Suncorp Bank division. The Group is currently completing the purchase price allocation exercise to identify, measure and recognise the acquired tangible and intangible assets and assumed liabilities at their acquisition date fair values. As at 30 September 2024, all values have been recognised on a provisional basis pending completion of this exercise. The provisional goodwill balance of $1,402 million will be remeasured to take into account any adjustments from this exercise. For further information on the assets acquired and liabilities assumed, refer to Note 34 Suncorp Bank acquisition in the Financial Report. Suncorp Bank acquisition related adjustments Suncorp Bank’s divisional results for 2024 includes the following acquisition related adjustments recognised by the Group post transaction completion, with an after tax charge of $196 million: x Collectively assessed credit impairment charge of $244 million ($171 million after tax) for Suncorp Bank’s performing loans and advances. In accordance with Australian Accounting Standards requirements, the Group consolidated Suncorp Bank’s loans and advances on 31 July 2024, however the Group was not permitted to recognise an allowance for ECL on the performing loans and advances, leading to a proportional reduction in acquisition-related goodwill that would otherwise have been recognised. Subsequently, the Group was required to recognise a collectively assessed allowance for ECL estimated using the Group’s ECL methodologies, with a corresponding charge recognised in the Group’s Income Statement. x Accelerated software amortisation expense of $36 million ($25 million after tax) on alignment to the Group’s software capitalisation policy.  20 Australia and New Zealand Banking Group Limited 2024 Annual Report 20 ![]() #### Group performance Key measures of our financial performance are set out below.  Adjustments between statutory profit and cash profit ($m) Adjustments between continuing operations statutory profit and cash profit are summarised below: A djustmen t Comment for the adjustment Economic hedges 2024: $264 million loss 2023: $217 million loss Revenue and expense hedges 2024: $74 million gain 2023: $90 million loss The Group enters into economic hedges to manage its interest rate and foreign exchange risk which, in accordance with accounting standards, result in fair value gains and losses being recognised within the Income Statement. We remove the fair value adjustments from cash profit since the profit or loss resulting from the hedge transactions will reverse over time to match with the profit or loss from the economically hedged item as part of cash profit. This includes gains and losses arising from derivatives not designated in accounting hedge relationships but which are considered to be economic hedges, including hedges of foreign currency debt issuances and foreign exchange denominated revenue and expense streams, primarily NZD and USD (and USD correlated), as well as ineffectiveness from designated accounting hedges. In the 2024 financial year, losses on economic hedges relate to funding-related swaps, principally from narrowing USD/EUR currency basis spreads and the weakening of the USD against the AUD. Further losses were driven by the impact of falling AUD and NZD yield curves on net pay fixed economic hedge positions. The gain on revenue and expense hedges was mainly due to the appreciation of AUD against the USD and NZD. 1.57 1.70 2024 2023 Net interest margin – cash (%) 2020 Operating expenses to operating income - cash (%) Credit impairment charge /(release) – cash ($m) Cash profit ($m) Return on equity – cash (%) Common equity tier 1 (%) 51.3 48.2 2024 2023 406 245 2024 2023 6,785 7,480 2024 2023 12.2 13.3 2024 2023 9.9 11.2 2024 2023 264 2024 Statutory profit attributable to shareholders of the Company Economic hedges Revenue and expense hedges 2024 Cash profit attributable to shareholders of the Company 6,595 (74) 6,785 21 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 21 ![]() #### Group cash profit performance Cash profit ($m) 2024 2023 $m $m Movt Net interest income 16,037 16,568 -3% Other operating income 4,746 4,344 9% Operating income 20,783 20,912 -1% Operating expenses (10,669) (10,087) 6% Profit before credit impairment and income tax 10,114 10,825 -7% Credit impairment (charge)/release (406) (245) 66% Profit before income tax 9,708 10,580 -8% Income tax expense (2,888) (3,072) -6% Non-controlling interests (35) (28) 25% Cash profit attributable to shareholders of the Company 6,785 7,480 -9% Cash profit attributable to shareholders of the Company decreased $695 million (9%) compared with the 2023 financial year. Net interest income decreased $531 million (3%) driven by a 13 bps decrease in net interest margin, partially offset by a $48.8 billion (5%) increase in average interest earning assets. The decrease of 13 bps was driven by home loan pricing competition, markets activities impacted by higher funding costs, primarily on commodity assets, where the related revenues are recognised as other operating income, and higher wholesale funding issuance volume, partially offset by higher earnings on capital and replicating deposits. The increase in average interest earning assets was driven by higher Markets activities, lending growth across the Australia Retail, Australia Commercial and New Zealand divisions, and the acquisition of Suncorp Bank, partially offset by lower lending in the Institutional division. Other operating income increased $402 million (9%) driven by an increase of $392 million in Markets other operating income from more favourable trading conditions and higher transaction activity, and $43 million from a loss of disposal of data centres in Australia and $26 million from unfavourable valuation adjustments, both in the prior year. This was partially offset by a $91 million decrease in share of associates’ profit. Operating expenses increased $582 million (6%) driven by inflationary impacts, higher costs associated with strategic initiatives, the impact from the acquisition of Suncorp Bank and restructuring costs. This was partially offset by productivity initiatives and the initial one-off levy under the Compensation Scheme of Last Resort (CSLR) in 2023. Credit impairment increased $161 million (66%) driven by a $110 million increase in collectively assessed credit impairment driven by $244 million from Suncorp Bank, partially offset by improvement in economic outlook, and a $51 million increase in individually assessed credit impairment. 402 177 2023 Cash profit attributable to shareholders of the Company Net interest income Other operating income Operating expenses Credit impairment Income tax expense & non-controlling interests 2024 Cash profit attributable to shareholders of the Company 7,480 (531) (582) (161) 6,785 22 Australia and New Zealand Banking Group Limited 2024 Annual Report 22 ![]() #### Analysis of cash profit performance Net interest income Group net interest margin (bps) 2024 2023 $m $m Movt Net interest income 1 16,037 16,568 -3% Net interest margin (%) - cash 1 1.57 1.70 -13 bps Average interest earning assets 1,024,290 975,540 5% Average deposits and other borrowings 859,844 825,113 4% 1. Includes the major bank levy of -$389 million (2023: -$353 million).  Net interest income decreased $531 million (3%) driven by a 13 bps decrease in net interest margin, partially offset by a $48.8 billion (5%) increase in average interest earning assets. Net interest margin decreased 13 bps driven by home loan pricing competition, markets activities impacted by higher funding costs, primarily on commodity assets where the related revenues are recognised as other operating income, higher wholesale funding issuance volume, partially offset by higher earnings on capital and replicating deposits. Average interest earning assets increased $48.8 billion (5%) driven by higher Markets activities, lending growth across the Australia Retail, Australia Commercial, and New Zealand divisions and the acquisition of Suncorp Bank, partially offset by lower lending in the Institutional division. Average deposits and other borrowings increased $34.7 billion (4%) driven by higher term deposits, the acquisition of Suncorp Bank, and higher commercial paper, partially offset by lower repurchase agreements.  5 2023 Cash net interest margin Assets pricing Deposits pricing and wholesale funding Assets and funding mix Capital and replicating portfolio Suncorp Bank impact 2024 Cash net interest margin subtotal Markets activities 2024 Cash net interest margin 170 (8) (2) 0 0165 (8) 157 23 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 23 ![]() Other operating income Other operating income ($m)  2024 2023 $m $m Movt Net fee and commission income 1 1,854 1,855 0% Markets other operating income 2,315 1,923 20% Share of associates' profit/(loss) 134 225 -40% Other 1 443 341 30% Total cash other operating income 2 4,746 4,344 9% 1. Excluding the Markets business unit. 2. Suncorp Bank division contributed $6 million in 2024 for the 2 months ended post acquisition. Net fee and commission income decreased $1 million driven by a decrease in non-lending fees in the Australia Commercial division, and lower cards revenue in the Australia Retail division. This was partially offset by higher transaction activity in the Institutional division. Markets other operating income increased $392 million (20%) driven by increases in Franchise Revenue across most product groups from more favourable trading conditions and higher transaction activity, an increase in derivative valuation adjustments with gains from favourable credit and funding spreads, partially offset by lower Balance Sheet revenues from the impact of fewer short-term interest rate increases than prior year. Share of associates' profit decreased $91 million (40%) driven by loss of equity accounted earnings following the disposal of AMMB Holdings Berhad (AmBank), and a decrease in the Group’s equity accounted share of profit from P.T Bank Pan Indonesia (PT Panin). Other income increased $102 million (30%) primarily driven by the net increase from non-recurring items in the prior year (including unfavourable valuation adjustments, loss on disposal of data centres, and favourable adjustment to gain on sale relating to the completed UDC Finance divestment), and a release of excess provision following legal settlements. This was partially offset by lower gains from recycling of foreign currency translation reserves from other comprehensive income to Income Statement on dissolution of a number of international entities, and a loss on disposal of investment in AmBank.   392 102 2023 Cash other operating income Net fee and commission income Markets other operating income Share of associates’ profit/(loss) Other 2024 Cash other operating income 4,344 (91) 4,746 (1) 1 1 24 Australia and New Zealand Banking Group Limited 2024 Annual Report 24 ![]() Operating expenses Operating expenses ($m)  2024 2023 $m $m Movt Personnel 6,140 5,736 7% Premises 688 684 1% Technology 1,894 1,686 12% Restructuring 235 169 39% Other 1,712 1,812 -6% Total cash operating expenses 1 10,669 10,087 6% Full time equivalent staff 2 42,142 40,119 5% Average full time equivalent staff 40,379 39,444 2% 1. Suncorp Bank contributed $188 million in 2024 for the 2 months post acquisition. Excluding Suncorp Bank division, total operating expense increased 4%. 2. Includes 2,798 FTE from Suncorp Bank division. Excluding Suncorp Bank division, FTE decreased 2%.  Personnel expenses increased $404 million (7%) driven by inflationary impacts on wages including an increase in leave provisions, impact from acquisition of Suncorp Bank and higher resourcing associated with strategic initiatives. This was partially offset by benefits from productivity initiatives. Technology expenses increased $208 million (12%) driven by higher software licence costs, inflationary impacts on vendor costs and the impact from acquisition of Suncorp Bank including accelerated amortisation expense on alignment to the Group’s software capitalisation policy. This was partially offset by benefits from technology simplification. Restructuring expenses increased $66 million (39%) driven by operational changes across the Group. Other expenses decreased $100 million (6%) driven by the initial one-off CSLR levy in the September 2023 full year and benefits from productivity initiatives. This was partially offset by the impact from acquisition of Suncorp Bank. 404 4 208 66 2023 Cash operating expenses Personnel Premises Technology Restructuring Other 2024 Cash operating expenses 10,087 (100) 10,669 25 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 25 ![]() Credit impairment 2024 2023 Movt Collectively assessed credit impairment charge/(release) ($m) 262 152 72% Individually assessed credit impairment charge/(release) ($m) 144 93 55% Credit impairment charge/(release) ($m) 406 245 66% Gross impaired assets ($m) 1,693 1,521 11% Credit risk weighted assets ($b) 361.2 349.0 3% Total allowance for expected credit losses (ECL) ($m) 4,555 4,408 3% Individually assessed allowance for ECL as % of gross impaired assets 18.2% 24.7% Collectively assessed allowance for ECL as % of credit risk weighted assets 1.18% 1.16% Collectively assessed credit impairment charge/(release) ($m) The collectively assessed impairment charge of $262 million for 2024 was driven by acquisition accounting related adjustments for Suncorp Bank, deterioration in credit risk profile across all divisions, and portfolio growth. This was partially offset by improvement in economic outlook and a reduction in management temporary adjustments as anticipated risks are more represented in portfolio credit profiles. The collectively assessed impairment charge of $152 million for 2023 was driven by deterioration in the economic outlook and credit risk. This was partially offset by favourable changes in portfolio composition, particularly in the Institutional division. Individually assessed credit impairment charge/(release) ($m) The individually assessed credit impairment charge increased $51 million (55%) driven by increases in the Australia Commercial division from SME Banking portfolio, the Australia Retail division from unsecured portfolio and the New Zealand division from the Business & Agri portfolio, partially offset by a decrease in the Institutional division due to lower new impairment flows. 244 262 88 16 3 2023 Collectively assessed credit impairment charge Australia Retail Australia Commercial Institutional New Zealand Suncorp Bank Pacific Group Centre 2024 Collectively assessed credit impairment charge 152 (84) (57) (100) 93 144 20 30 16 4 2023 Individually assessed credit impairment charge Australia Retail Australia Commercial Institutional New Zealand Suncorp Bank Pacific 0 Group Centre 2024 Individually assessed credit impairment charge (18) (1) 26 Australia and New Zealand Banking Group Limited 2024 Annual Report26 ![]() Gross impaired assets by division ($m) Gross impaired assets increased $172 million (11%) driven by an increase in the Australia Retail division due to restructured home loan facilities, the acquisition of Suncorp Bank, an increase in the Australia Commercial due to deterioration in the SME Banking portfolio, and an increase in the New Zealand division due to portfolio deterioration across all portfolios. This was partially offset by a decrease in the Institutional division due to the upgrade of several single name exposures, and the Pacific division due to reduced restructured exposures. Total allowance for expected credit losses ($m) The increase in total allowance for expected credit losses was driven by a $215 million increase in the collectively assessed allowance for expected credit losses, partially offset by a $68 million decrease in the individually assessed allowance for expected credit losses. The increase in collectively assessed allowance for expected credit losses was driven by deterioration in credit risk profile across all divisions ($267 million), the additional allowance for ECL from Suncorp Bank ($248 million), and portfolio growth ($88 million). This was partially offset by reduction in management temporary adjustments ($201 million), improvement in economic outlook ($136 million), and reduction from foreign currency translation and other impacts ($51 million). The decrease in individually assessed allowance for expected credit losses was driven by a decrease in the Institutional division due to lower new impairment flows and continued write-backs. 350 43 36 66 2023 Gross impaired assets Australia Retail Australia Commercial Institutional New Zealand Suncorp Bank Pacific Group Centre 2024 Gross impaired assets 1,521 (278) (45) 01,693 14 248 3 2023 Total allowance for expected credit losses Australia Retail Australia Commercial Institutional New Zealand Suncorp Bank Pacific Group Centre 2024 Total allowance for expected credit losses 4,408 (38) (55) (10) (15) 4,555 27 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 27 ![]() #### Divisional performance Australia Australia New Suncorp Group 2024 Retail Commercial Institutional Zealand Bank 2 Pacific Centre Group Net interest margin 1 1.91% 2.59% 0.75% 2.57% 1.93% 3.88% n/a 1.57% Operating expenses to operating income 59.7% 43.0% 41.7% 38.8% 73.2% 64.5% n/a 52.0% Cash profit ($m) 1,607 1,342 2,858 1,536 (122) 60 (496) 6,785 Net loans and advances ($b) 332.5 65.0 210.5 123.5 70.9 1.7 - 804.0 Customer deposits ($b) 176.8 116.3 264.4 100.9 54.7 3.6 (0.1) 716.6 Number of FTE 10,832 3,294 6,272 6,756 2,798 985 11,205 42,142 Australia Australia New Suncorp Group 2023 Retail Commercial Institutional Zealand Bank Pacific Centre Group Net interest margin 1 2.22% 2.70% 0.89% 2.64% - 3.91% n/a 1.70% Operating expenses to operating income 54.3% 39.6% 40.5% 36.5% - 69.7% n/a 49.3% Cash profit ($m) 1,938 1,440 2,949 1,546 - 71 (464) 7,480 Net loans and advances ($b) 312.2 61.6 210.2 121.8 - 1.7 0.1 707.7 Customer deposits ($b) 164.8 113.4 266.5 99.1 - 3.7 (0.1) 647.4 Number of FTE 11,313 3,514 6,366 6,766 - 1,013 11,147 40,119 1. The net interest margin excluding Markets business unit was 2.35% (2023: 2.39%) for the Group and 2.38% (2023: 2.31%) for the Institutional division. 2. Suncorp Bank 2024 Cash profit includes Suncorp Bank acquisition related adjustment charge after tax of $196 million. 28 Australia and New Zealand Banking Group Limited 2024 Annual Report 28 ![]()  #### Divisional performance Australia Retail Lending volumes increased driven by home loan growth. Net interest margin decreased driven by margin contraction from home loan and deposit pricing competition, unfavourable deposit mix with a shift towards lower margin term deposits, and higher net funding costs. This was partially offset by higher earnings on capital and replicating portfolio. Operating expenses increased driven by inflationary impacts and incremental costs associated with strategic initiatives including ANZ Plus, partially offset by lower restructuring expense, and benefits from productivity initiatives. Credit impairment charge decreased primarily driven by lower collectively assessed credit impairment, partially offset by higher individually assessed credit impairment charge due to higher new impairment flows in the unsecured portfolio. Australia Commercial Lending volumes increased driven by Diversified & Specialist Businesses, partially offset by lower lending in Central Functions and SME Banking. Net interest margin decreased driven by unfavourable deposit mix with a shift towards lower margin term deposits, asset margin contraction from pricing competition, and higher net funding costs. This was offset by favourable deposit margins and higher earnings on capital and replicating portfolio. Other operating income decreased driven by a decrease in non-lending fees and a gain on sale of Investment Lending business in the prior year. Operating expenses increased driven by higher restructuring expense and inflationary impacts, partially offset by benefits from productivity initiatives. Credit impairment charge decreased driven by lower collectively assessed credit impairment, partially offset by higher individually assessed credit impairment charge due to higher new impairment flows in the SME Banking portfolio. Institutional Lending volumes increased driven by higher Markets balances, partially offset by lower core lending in Transaction Banking. Net interest margin ex-Markets increased driven by higher earnings on capital. Other operating income increased driven by higher Markets revenues in the customer franchise business lines. Operating expenses increased driven by inflationary impacts and higher restructuring expense, partially offset by benefits from productivity initiatives. Credit impairment release decreased driven by higher collectively assessed credit impairment, partially offset by higher individually assessed credit impairment release due to lower new impairment flows. New Zealand Lending volumes increased driven by home loan growth, partially offset by contraction in business lending. Net interest margin decreased driven by unfavourable deposit margin, unfavourable deposit mix with a shift towards lower margin term deposits. This was partially offset by lower net funding costs and higher earnings on capital. Other operating income decreased driven by a gain on disposal of data centres in New Zealand in the prior year. Operating expenses increased driven by inflationary pressure, higher restructuring expense and seasonal factors, partially offset by benefits from productivity initiatives. Credit impairment charge decreased driven by lower collectively assessed credit impairment flows, partially offset by higher individually assessed credit impairment due to higher new impairments mainly in the Business & Agri portfolio. Suncorp Bank 2024 results include 2 months results from the date of acquisition. This includes acquisition related adjustments of $196 million loss after tax comprising a collectively assessed credit impairment charge of $244 million ($171 million after tax) for Suncorp Bank’s performing loans and advances, and an accelerated software amortisation expense of $36 million ($25 million after tax) on alignment to the Group’s software capitalisation policy. Pacific Cash profit decreased driven by lower credit impairment release, partially offset by lower expenses and higher other operating income. Group Centre Cash loss increased primarily driven by lower equity accounted earnings and a loss on sale following the disposal of AmBank, partially offset by increases driven by a number of non-recurring items in the prior year, including unfavourable valuation adjustment from investments measured at fair value through profit or loss in the prior year, and a loss on disposal of data centres in Australia.  29 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 29 ![]() #### Financial position of the Group Condensed balance sheet As at 2024 2023 $b $b Movt Assets Cash / Settlement balances owed to ANZ / Collateral paid 166.5 186.1 -11% Trading assets and investment securities 186.0 134.0 39% Derivative financial instruments 54.4 60.4 -10% Net loans and advances 804.0 707.7 14% Other 18.7 17.9 4% Total assets 1,229.6 1,106.1 11% Liabilities Settlement balances owed by ANZ / Collateral received 22.8 29.6 -23% Deposits and other borrowings 905.2 815.2 11% Derivative financial instruments 55.3 57.5 -4% Debt issuances 156.4 116.0 35% Other 21.1 18.7 13% Total liabilities 1,160.8 1,037.0 12% Total equity 68.8 69.1 0% Cash / Settlement balances owed to ANZ / Collateral paid decreased $19.6 billion (10%) driven by decreases in balances with central banks, and settlement balances owed to ANZ, and the impact of foreign currency translation. This was partially offset by increases in reverse repurchase agreements and overnight interbank deposits. Trading assets and investment securities increased $52.0 billion (39%) driven by an increase in government and semi-government bonds, and treasury bills, and the acquisition of Suncorp Bank ($11.6 billion), partially offset by the impact of foreign currency translation. Net loans and advances increased $96.3 billion (14%) driven by the acquisition of Suncorp Bank ($70.9 billion), increases in the Australia Retail ($20.3 billion) and New Zealand ($3.2 billion) divisions due to home loan growth, and higher lending volumes in the Institutional ($5.2 billion) and Australia Commercial ($3.5 billion) divisions, partially offset by the impact of foreign currency translation. Settlement balances owed by ANZ / Collateral received decreased $6.9 billion (23%) driven by decreases in collateral received and cash clearing accounts. Deposits and other borrowings increased $90.0 billion (11%) driven by the acquisition of Suncorp Bank ($62.3 billion), higher customer deposits in the Australia Retail ($12.0 billion), Institutional ($7.2 billion), New Zealand ($3.1 billion) and Australia Commercial ($2.9 billion) divisions, increases in commercial paper ($14.5 billion), and deposits from banks and repurchase agreements ($8.8 billion), partially offset by the impact of foreign currency translation. Debt issuances increased $40.4 billion (35%) driven by the issue of new senior and subordinated debt, including ANZ Capital Notes 9, partially offset by the redemption of ANZ Capital Notes 4, and the acquisition of Suncorp Bank ($16.6 billion). Total equity decreased $0.3 billion (0%) driven by capital returned from ANZBGL to ANZGHL to fund $2 billion share buy-back, partially offset by an increase in retained earnings.  30 Australia and New Zealand Banking Group Limited 2024 Annual Report 30 ![]() Liquidity Average 2024 2023 Total liquid assets ($b) 1 273.9 268.3 Liquidity Coverage Ratio (LCR) 1 133% 130% 1. Full year average, calculated as prescribed per APRA Prudential Regulatory Standard (APS 210 Liquidity) and consistent with APS 330 requirements. The Group holds a portfolio of high quality unencumbered liquid assets in order to protect the Group’s liquidity position in a severely stressed environment, as well as to meet regulatory requirements. High Quality Liquid Assets comprise three categories, with the definitions consistent with Basel 3 LCR: x Highest-quality liquid assets (HQLA1): Cash, highest credit quality government, central bank or public sector securities eligible for repurchase with central banks to provide same-day liquidity. x High-quality liquid assets (HQLA 2): 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. x Alternative liquid assets (ALA): Eligible securities listed by the RBNZ. The 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. The LCR remained above the regulatory minimum of 100% throughout this period. Funding 2024 2023 $b $b Customer liabilities (funding) 729.5 659.1 W holesale funding 376.6 316.8 Shareholders’ equit y 68.8 69.1 T otal funding 1 1,174.9 1,045.0 Net Stable Funding Ratio 116% 116% 1 Includes $79.1 billion of funding from the acquisition of Suncorp Bank. The Group targets a diversified funding base, avoiding undue concentrations by investor type, maturity, market source and currency. Net Stable Funding Ratio remained above the regulatory minimum of 100% throughout this period. During 2024, the ANZBGL Group issued $41.6 billion of term wholesale funding (including $3.7 billion of pre-funding for the September 2025 full year, $1.4 billion of Suncorp Bank issuance and $0.8 billion of perpetual subordinated notes issued by ANZ Holdings (New Zealand) Limited). In addition, $1.7 billion of APRA compliant Additional Tier 1 capital and $0.3 billion of RBNZ compliant additional tier 1 capital was issued.  31 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 31 ![]() Capital management 2024 2023 Movt Common Equity Tier 1 (Level 2) - APRA Basel III 12.2% 13.3% Credit risk weighted assets ($b) 361.2 349.0 3% Total risk weighted assets ($b) 446.6 433.3 3% APRA Leverage Ratio 4.7% 5.4% The Group’s capital management framework includes managing to Board approved risk appetite settings and maintaining all regulatory requirements. APRA requirements at Level 1 and Level 2 include ANZ operating at or above APRA’s expectation for Domestic Systematically Important Banks (D-SIBs). APRA, under the authority of the Banking Act 1959, sets minimum regulatory requirements for banks including what is acceptable as regulatory capital and provides methods of measuring the risks incurred by ANZ Bank Group. The ANZ Bank Group’s Common Equity Tier 1 ratio was 12.2% based on APRA Basel III standards, exceeding APRA’s minimum requirements. It decreased 114 bps driven by the impact of dividends paid during the year, acquisition of Suncorp Bank, the transfer of capital from ANZBGL to ANZGHL to fund $2 billion share buy-back, and underlying RWA movement. This was partially offset by cash earnings, proceeds from disposal of investment in AmBank and mortgage RWA modelling initiatives. At 30 September 2024, ANZ Bank Group’s leverage ratio was 4.7% which is above the 3.5% minimum for internal ratings-based approach ADI, including ANZ. Dividends ANZBGL paid the following dividends during the year: x  $ 2,771 million 2023 final dividend to ANZ BH Pty Ltd on 22 December 2023; x  $ 2,496 million 2024 interim dividend to ANZ BH Pty Ltd on 1 July 2024. On 7 November 2024, the Directors proposed a final dividend of $2,472 million be paid on 20 December 2024, to ANZ BH Pty Ltd. Further details on dividends paid during the year ended 30 September 2024 are set out in Note 6 Dividends in the Financial Report. 32 Australia and New Zealand Banking Group Limited 2024 Annual Report 32 ![]() Page intentionally le blank 33 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() ## Remuneration report Holly Kramer Chair – People & Culture Commiee #### 2024 Remuneration #### Report – audited Dear Shareholder, Following a record performance in 2023, the ANZ team has delivered another year of strong financial results, along with significant progress on our strategic agenda, including completion of the acquisition of Suncorp Bank and significant growth in customers joining ourANZ Plus platform. For shareholders, we have delivered 27% Total Shareholder Return (TSR) in financial year 2024, and wealso announced an on market share buy-back in May 2024. Two years ago, the Board revised the executive remuneration structure to ensure compliance with CPS 511 Remuneration and to ensure that the Board had levers within the framework to take into account business and leadership performance, as well as the management of financial and non-financial risk. This year, the Board applied these levers with respect to 2024 remuneration outcomes, including as a result of a series of issues stemming from our Markets business, and an additional $250m capital overlay imposed by APRA due to Non-Financial Risk (NFR) maers. (Note: these issues are outlined in the ‘Chairman’s message’ of the Annual Report, and in this report we have referenced the specific instances where consequences have been considered and applied, with an overall summary outlined in Section 6). Notwithstanding these issues, the Boardconsiders that the business has performed well in 2024, and financial #### Contents 1. Who is covered by this report 36 2. Remuneration at a glance 37 3. Historical information 38 4. Executive performance and remuneration framework overview 40 5. Executive remuneration outcomes 47 6. Accountability and Consequence Framework 57 7. Non-Executive Director (NED) remuneration 60 8. Remuneration governance 62 9. Other remuneration information 64 risks have been well managed. Therefore, the challenge has been to balance the reward for good overall performance, with the need to apply consequences fairly and appropriately to reflect the impact of these recent events on ANZ’s reputation, and customer, shareholder and regulator confidence. #### 2024 remuneration outcomes Short Term Variable Remuneration (STVR) – Awarded The ANZ Group Scorecard performance isa key component informing STVR outcomes for the Chief Executive Ocer (CEO) and Disclosed Executives, as well as the majority of ANZ Group employees. The 2024 Group Scorecard performance was assessed at 99% of target. However, with the application of the Risk Modifier, the overall scorecard performance reduced to90%/Below Target. In order to improve clarity and alignment to the ANZ Group Scorecard, the Board determined that for 2024, the CEO’s STVR would be based on 100% of the ANZ Group Scorecard results, with allowance for a CEO Leadership Modifier adjustment focused on the CEO’s leadership of key strategic priorities and risk management (Section 5.1.2). In the Board’s assessment, the CEO Shayne Ellio, has continued to demonstrate good leadership of the Group and we have therefore assessed him as on target for the CEO Leadership Modifier component of his assessment. Specifically, his leadership of key strategic objectives has positioned ANZ well for the future, and he is consistently a role model of ANZ’s values and behaviours. Given, however, that the CEO has ultimate accountability for the broader Group’s performance, the CEO needs to bear appropriate accountability for the impact of the Markets and NFR maers. As a result, the Board applied its discretion andassessed the CEO’s performance asBelow Target, and determined the appropriate 2024 STVR outcome was 65% of target opportunity (52% of maximum opportunity). For Disclosed Executives, the Board approved 2024 STVR outcomes which range from 50% to 88% of target (average 34 Australia and New Zealand Banking Group Limited 2024 Annual Report34 34 Australia and New Zealand Banking Group Limited 2024 Annual Report ![]() 75%). This reflects their individual and Divisional performance, the Below Target assessment for Group performance, collective accountability for the NFR maers, and individual consequences (where relevant) for the Markets maers. Long Term Variable Remuneration (LTVR) – Lapsed/Granted The performance rights granted in late 2019 to the CEO and relevant Disclosed Executives did not meet the hurdles when tested at the end of the performance period in November 2023, therefore 100% of these performance rights lapsed. Last year, the 2024 LTVR (comprised of 50% performance rights and 50% restricted rights), was granted to the CEO and Disclosed Executives at full opportunity, following the Board’s pre grant assessment in October 2023 for restricted rights, determining that no reduction was required. For the CEO, the 2024 LTVR grant was $3,375,000, noting that LTVR is future focused and vests over time. In considering the pre grant assessment for the 2025 LTVR, the Board has chosen to adjust the restricted rights (which make up 50% of LTVR at full opportunity), downward by 10%, due to the risk maers discussed above. The CEO’s proposed 2025 LTVR of $3,206,250, will be subject to a shareholder vote at the upcoming 2024 Annual General Meeting (AGM). Fixed remuneration Eective for 2024, Disclosed Executives (excluding the CEO), received a Fixed Remuneration (FR) adjustment to maintain or improve market positioning. There were no further increases to FR for 2024. #### Changes to the way we #### remunerate executives #### (from2024 onward) For LTVR awards of performance rights, only from financial year 2024 onward, theBoard approved in July 2023: • the removal of DBS Bank Limited from the Select Financial Services (SFS) relative TSR comparator group, to beer balance the weighting of international peers in our comparator group; and • that Compound Annual Growth Rate (CAGR) targets for the absolute CAGR TSR hurdle be based on the time weighted Cost of Capital (CoC) over the four-year performance period rather than the CoC at the start of the period, to beer reflect cyclical factors impacting shareholders. In addition, post the Suncorp Bank acquisition and applicable to both awards currently on foot and future LTVR awards of performance rights, the Board approved the removal of Suncorp Group Limited from the relative TSR SFS comparator group (Section 9.1). Holly Kramer Chair – People & Culture Commiee #### Changes to the way we #### remunerate executives #### (from 2025 onward) In 2024, the People & Culture Commiee recommended, and the Board approved, changes to the ANZ Group Scorecard and performance approach for financial year 2025 onward. Theintention is to provide a greater focus on fewer, more meaningful objectives that will drive sustainable long-term performance, and to provide a more transparent link between performance and remuneration outcomes. This approach is also consistent with shareholder feedback. The key changes arising from this review will be eective from 2025, and are summarised as follows: • reduction in the number of objectives and indicators; • provision of weightings for each objective rather than at the category level only; • introduction of threshold/target/ stretch targets for each indicator; • increase in the performance assessment weighting for Group performance for frontline Disclosed Executives, from 25% to 40%, to recognise the increase in Group-wide priorities (excluding Group Executive and CEO, New Zealand); and • increase in the weighting of financial measures from 40% to 50% in our Group and Divisional Scorecards. #### Non-Executive #### Director (NED) fees For 2024 there was a 2% upli to the NEDmember fee, and uplis to fees for Commiee chairs and members. There was no change to the fees for the Board Chair (Section 7.1). In closing, and on behalf of my Board colleagues, I’d like to thank all of our ANZemployees for their important contributions this past year. While the year has been marked by some challenges in the bank, underlying performance was strong and we have made meaningful progress on our long-term goals. 35 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 35 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() The Remuneration Report for Australia and New Zealand Banking Group Limited (ANZBGL) outlines our remuneration strategy and structure and the remuneration practices that apply to Key Management Personnel (KMP). This report has been prepared, and audited, as required by the Corporations Act 2001. It forms part of the Directors’ Report. This report includes disclosures for the full financial year 2024 (1 October 2023 to 30 September 2024). Ordinary shares and employee equity (deferred shares, deferred share rights, restricted rights and performance rights) held prior to 3 January 2023 1 were previously ANZBGL related equity – post the listing of ANZGHL, the equity was converted to ANZGHL related equity. References to ‘the Board’ throughout this report mean the Boards of ANZGHL and ANZBGL. Section 5.1.1 ANZ Group Scorecard – approach and 2024 outcomes relates to ANZGHL rather than ANZBGL given this forms the basis for determining performance and remuneration outcomes for the CEO and Disclosed Executives. KMP are Directors of the Group (or entity) (whether executive directors or otherwise), and those personnel with a key responsibility for the strategic direction and management of the Group (or entity) (i.e., members of the Group Executive Commiee (ExCo)) who have Financial Accountability Regime (FAR) Accountability and who report to the CEO (referred to as Disclosed Executives). #### 1.1 Disclosed Executive and Non-Executive Director #### changes There were several changes to our KMP during the 2024 year: • Ilana Atlas and John Macfarlane retired as Non-Executive Directors (NEDs) on 21 December 2023, at the conclusion of the 2023 AGM. • John Cincoa and Richard Gibb commenced as NEDs on 15 February 2024. • Following Sir John Key retiring as a NED on 14 March 2024, Sco St John commenced as a NED on 25 March 2024. • Richard Howell concluded as Acting Group Executive, Talent & Culture on 8 October 2023 following the appointment of Elisa Clements to the role of Group Executive, Talent & Culture, eective 9 October 2023. #### 1.2 Key Management Personnel (KMP) The KMP whose remuneration is disclosed in this year’s report are: 2024 Non-Executive Directors (NEDs) – Current P O’Sullivan Chairman J Cincoa Director from 15 February 2024 (ANZBGL NED only) R Gibb Director from 15 February 2024 J Halton Director G Hodges Director (ANZBGL NED only) H Kramer Director C O’Reilly Director J Smith Director S St John Director from 25 March 2024 2024 Non-Executive Directors (NEDs) – Former I Atlas Former Director – retired 21 December 2023 J Key Former Director – retired 14 March 2024 J Macfarlane Former Director – retired 21 December 2023 2024 Chief Executive Ocer (CEO) and Disclosed Executives – Current S Ellio CEO and Executive Director M Carnegie Group Executive, Australia Retail E Clements Group Executive, Talent & Culture (GE T&C) from 9 October 2023 K Corbally Chief Risk Ocer (CRO) F Faruqui Chief Financial Ocer (CFO) G Florian Group Executive, Technology & Group Services C Morgan Group Executive, Australia Commercial A Strong Group Executive, Strategy & Transformation A Watson Group Executive and CEO, New Zealand M Whelan Group Executive, Institutional 2024 Disclosed Executives – Former R Howell Former Acting Group Executive, Talent & Culture (GE T&C) – concluded in role 8 October 2023 No changes to KMP since the end of 2024 up to the date of signing the Directors’ Report. 1. ANZ Group Holdings Limited (ANZGHL) replaced Australia and New Zealand Banking Group Limited (ANZBGL) as the listed entity on 3 January 2023 under a scheme of arrangement approved by shareholders at the AGM on 15 December 2022. 1. Who is covered by this report 1.1 Disclosed Executive and Non-Executive Director changes 1.2 Key Management Personnel (KMP) 36 Australia and New Zealand Banking Group Limited 2024 Annual Report 36 Australia and New Zealand Banking Group Limited 2024 Annual Report ![]() 2. Remuneration at a glance CEO: Disclosed Executives: NEDs: • No Fixed Remuneration (FR) increase. • Awarded STVR of 65% of target (52% of maximum opportunity), reflecting his overall performance assessment ofBelow Target. • Awarded LTVR of $3,375,000 (following 2023 AGM shareholder approval). • Received 2024 total remuneration of $4.1m (inclusive of the value of prior equity awards which vested in 2024) (Section 5.3). • Received a Fixed Remuneration adjustment eective 1October 2023 to maintain or improve market positioning (approved October 2023 by the Board) – no further FR increases for 2024. • Awarded STVR outcomes averaging 75% of target (60% of maximum opportunity), with individual outcomes ranging from 50% to 88% of target (40% to 71% of maximum opportunity). • Awarded LTVR full opportunity of 135% of FR (100% of FR for the CRO) – as LTVR is future focused, 2024 LTVR awards were approved in October 2023 by the Board. Following the 2024 NED fees review in September 2023 (approved by the People & Culture Commiee): • Received a 2% increase to the NED member fee to $245,000 (unchanged since 2016). • Aligned fee structure across all Commiees increasing each Commiee chair fee to $68,000 and each Commiee member fee to $34,000. • Board Chairman fee remains unchanged. Restricted rights and performance rights outcomes: • 2024 LTVR restricted rights made at full award value following the 2024 LTVR pregrant assessment in October 2023 by the Board. • 100% of the 2019 performance rights award granted in late 2019 were lapsed, as performance hurdles were not met when tested in November 2023 – end of the performance period. #### For 2024 37 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 37 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 3. Historical information 3.1 Five-year ANZ financial performance summary 3.2 Historical performance and remuneration outcomes 3.3 ANZ TSR performance (1 to 10 years) #### 3.1 Five-year ANZ financial performance summary When determining variable remuneration outcomes for the CEO, Disclosed Executives and employees, a range of dierent financial indicators are considered. The Group uses cash profit as a measure of performance for the Group’s ongoing business activities, as this provides a basis to assess Group and Divisional performance against earlier periods and against peer institutions. The adjustments made in arriving at cash profit are included in statutory profit which is subject to audit. Although cash profit is not audited, the external auditor has informed the Audit Commiee that the cash profit adjustments have been determined on a consistent basis across each period presented. 2024 statutory profit is down 8% compared to the prior financial year, while cash profit is down 9%, with both metrics impacted by one-o Suncorp Bank acquisition related adjustments. Excluding the one-o adjustments, statutory profit is down 5% and cash profit is down 7%. During 2024 the Group commenced a $2billion share buy-back to return surplus capital to its shareholders, which up to 30September 2024 has resulted in the Group returning $883m of capital to shareholders via the acquisition of 30 million shares onthe market. ANZ’s financial performance 1 , including cash profit 2 , over the last five years. 1. The Group completed the divestment of its Aligned Dealer Group business, its Onepath Pensions and Investment business, and life insurance business across the 2020 and 2019 financial years. The financial results of these divested businesses were treated as discontinued operations in the 2022, 2021 and 2020 years. The Group ceased reporting discontinued and continuing operations from completion in 2022. On 1 October 2023, the Group adopted AASB 17 Insurance Contracts (AASB 17), applied AASB 17 effective 1 October 2022 and restated prior period comparative information. 2. Cash profit excludes non-core items included in statutory profit with the net after tax adjustment resulting in a decrease to statutory profit of $190m for 2024, made up of several items. It is provided to assist readers understand the results of the core business activities of the Group. Statutory profit aributable to ordinary shareholders ($m) 6,535 7,119 3,577 2024 2022 2020 2023 2021 7,106 6,162 Cash profit ($m, unaudited) 6,725 6,496 3,660 2024 2022 2020 2023 2021 7,413 6,181 Cash profit - continuing operations ($m, unaudited) 6,725 6,515 3,758 2024 2022 2020 2023 2021 7,413 6,198 Cash profit before provisions - continuing operations ($m, unaudited) 10,068 8,968 8,369 2024 2022 2020 2023 2021 10,766 8,396 Return on equity - cash (%) - continuing operations (unaudited) 9.7 10.4 6.2 2024 2022 2020 2023 2021 11.0 9.9 Earnings per share - cash - continuing operations (unaudited) 224.3 228.8 128.7 2024 2022 2020 2023 2021 247.3 216.5 38 Australia and New Zealand Banking Group Limited 2024 Annual Report 38 Australia and New Zealand Banking Group Limited 2024 Annual Report ![]() #### 3.2 Historical performance and remuneration outcomes The table below shows the link between financial performance and variable remuneration outcomes over the past five years. STVR outcomes are reasonably aligned with financial performance trends over the corresponding 2020 to 2024 periods, noting that the 2023 STVR outcomes were higher reflecting that year’s record result. 2020 2021 2022 2023 2024 CEO STVR 1 outcome (% of target) 50% 5 80% 93% 120% 65% Disclosed Executive STVR 2 outcome (average % of target 3 )54% 5 90% 97% 111% 75% Disclosed Executive STVR 2 outcome (range % of target 3 ) 46% - 66% 69% - 99% 89% - 120% 100% - 125% 50% - 88% LTVR/VR PR vesting outcome (% vested) 0% 43.3% 51.6% n/a 0% Share price 4 at 30 September ($) 17.22 28.15 22.8 25.66 30.48 Total dividend (cents per share) 60 142 146 175 166 Total shareholder return (12 month %) -36.9 70.7 -14 20 27.0 1. Previously referred to as AVR pre-2022 for the CEO. 2. Previously referred to as VR pre-2022 for Disclosed Executives. 3. Pre 2022, % of target applied to the full VR due to the combined VR structure for Disclosed Executives in those years. 4. On 1 October 2019, opening share price was $28.22. 5. Post 50% COVID-19 reduction. #### 3.3 ANZ TSR performance (1 to 10 years) The table below compares ANZ’s TSR performance against the median TSR and upper quartile TSR of the performance rights Select Financial Services (SFS) comparator group 1 over one to ten years, noting that for this table TSR is measured over a dierent timeframe (i.e., to 30 September 2024) to the performance period for our performance rights. • ANZ’s TSR performance was below the median TSR of the SFS comparator group 1 when comparing over one, three and ten years; and • Either just above or just below the median over five years dependent on the size of the SFS comparator group. Years to 30 September 2024 13510 ANZ (%) 27.0 31.1 41.3 74.6 Median TSR SFS 2,3 (%) 37. 0 3 8 . 3 47.1 4 6 . 3 4 8 . 5 37.1 95 .7 76 . 0 Upper quartile TSR SFS 2,3 (%) 41.3 42.1 58.6 52.4 105.5 81.7 205.7 151.8 1. See section 9.1.2 for details of the SFS comparator group. 2. Blue = SFS includes DBS Bank Limited and excludes Suncorp Group Limited. 3. White = SFS excludes DBS Bank Limited and Suncorp Group Limited. 39 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 39 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 4. Executive performance and remuneration framework overview 4.1 Strategy, principles and governance 4.2 Alignment of remuneration and risk 4.3 Remuneration structure and delivery 4.4 Performance assessment 4.5 Board discretion 4.6 Alignment of executive and shareholder interests 4.7 Remuneration mix #### ANZ’s purpose and strategy 1 Is underpinned by our Performance and Remuneration Policies which include our Reward Principles: Aract, motivate and keep great people Reward our people for doing the right thing having regard to our customers and shareholders Focus on how things are achieved as much as what is achieved Fair and simple to understand With remuneration delivered to our CEO and Disclosed Executives through: Fixed remuneration (FR) Performance linked variable remuneration Short Term Variable Remuneration (STVR) Awarded at end of year based on Group and individual performance Long Term Variable Remuneration (LTVR) Awarded at start of year, with LTVR vesting subject to performance conditions tested at end of 4-year performance period While governed by: The People & Culture Commiee and the Board determining FR and the variable remuneration outcomes for the CEO and each Disclosed Executive. Additionally, the CEO’s LTVR outcome is also subject to shareholder approval at the AGM. Board discretion (with supporting decision-making frameworks) is applied when determining performance and remuneration outcomes (including grant of short and long-term variable remuneration awards), before any scheduled release of previously deferred remuneration (Section 4.5), before the vesting of LTVR restricted rights (Section 9.1.1), and in applying any required consequences (Section 6). 1. See the ‘Our purpose and strategy’ section of the Annual Report. #### 4.1 Strategy, principles and governance The following overview highlights how the executive performance and remuneration framework supports ANZ’s purpose and strategy. 40 Australia and New Zealand Banking Group Limited 2024 Annual Report 40 Australia and New Zealand Banking Group Limited 2024 Annual Report ![]() #### 4.2 Alignment of remuneration and risk Variable remuneration for the CEO and Disclosed Executives is designed to align remuneration and risk. Alignment of remuneration and risk Variable remuneration for the CEO and Disclosed Executives is aligned to risk management through: Assessing behaviours based on ANZ’s values and risk/compliance standards (including the FAR) Determining variable remuneration outcomes with risk as amodifier – impacting outcomes at both a pool and individual level Weighting remuneration toward the longer-term with a significant proportion at risk Emphasising risk in the determination and vesting of LTVR restricted rights (Section 9.1.1) Reinforcing the importance of risk culture in driving sustainable long-term performance in the LTVRdesign Providing material weight to non-financial metrics (particularly risk) in line with APRA requirements Ensuring risk measures are considered over a long-time horizon (up to 5 and 6 years) Determining accountability andapplying consequences whereappropriate Strengthening risk consequences with clawback (Section 4.5) Prohibiting the hedging of unvested equity Variable remuneration can be adjusted downwards, including to zero, allowing the Board to hold executives accountable, individually or collectively, for the longer-term impacts of their decisions and actions. #### 4.3 Remuneration structure and delivery There are two core components of remuneration at ANZ – fixed remuneration and at risk variable remuneration. In structuring remuneration, the Board aims to find the right balance between fixed and variable remuneration (at risk), the way itisdelivered (cash versus deferred remuneration) and appropriate deferral time frames (the short, medium and long-term). The Board sets and reviews annually the CEO and Disclosed Executives’ FR based on financial services market relativities and reflectingeach executive’s responsibilities, performance, qualifications and experience. The CEO and Disclosed Executives’ variable remuneration is comprised of STVR and LTVR consistent with external market practice. At target performance, 63% of variable remuneration for the CEO and Disclosed Executives, and 56% of variable remuneration for theCRO is deferred for at least four years from the date the Board approved the variable remuneration in October, and the date shareholders approve the CEO’s LTVR, noting that this complies with the FAR minimum deferral requirement of 60% for the CEO and 40% for Disclosed Executives. 41 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 41 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 4.3.1 Remuneration structure CEO and Disclosed Executives (DEs) (excluding CRO 1 ) 4.3.2 Variable remunerationdelivery Variable remuneration for the CEO and the Disclosed Executives (excluding the CRO and former Acting GE T&C) is delivered as follows: • STVR as 50% cash paid to executives at the end of the annual Performance and Remuneration Review (December), and subject to clawback for two years post payment, and 50% shares deferred equally over years 2 and 3 (granted in November in respect of performance for the prior financial year); and • LTVR as restricted rights and performance rights granted at the beginning of the financial year in November/December, and deferredover: – year 4 (33%), year 5 (33%) and year 6 (34%) for the CEO; and – year 4 (50%) and year 5 (50%) for Disclosed Executives. Both restricted rights and performance rights are tested against the relevant performance condition at the end of the four-year performance period and are then subject to additional holding period(s) until the completion of the respective deferral periods (Section 9.1). Before any scheduled release of deferred remuneration, the Board considers whether malus should be applied to previously deferred remuneration (or further deferral of vesting), or clawback to variable remuneration previously granted (two years post payment or vesting), for the CEO and Disclosed Executives (Section 4.5). 1. CRO mix: 33.3% FR/33.3% STVR/33.3% LTVR. STVR maximum opportunity: the same as CEO/DE at 100% of FR, LTVR full opportunity: 100% of FR and delivered as 100% RR to support independence. 2. If the CEO receives above target STVR, the amount above target will be delivered as 40% cash and 60% DS (20% year 4, 20% year 5, 20% year 6) to ensure compliance with the minimum deferral requirements with respect to FAR and APRA’s Prudential Standard CPS 511 Remuneration. Mix at Maximum Maximum/full opportunity Delivery Timing/ deferral Year 1 Cash 100% Fixed Remuneration (FR) 30% 100% of FR Cash and superannuation contributions Year 2 DS 25% Year 3 DS 25% Year 1 Cash 50% Short Term Variable Remuneration (STVR) 2 30% 100% of FR 50% Cash 50% Deferred shares (DS) Awarded at end of year based onGroup and individual performance 50% Restricted rights(RR) 50% Performance rights (PR) Long Term Variable Remuneration (LTVR) 40% 135% of FR ~2 yr HP ~1 yr HP 4-year Performance Period • Awarded at start of year subject to – RR: Pre grant assessment (riskbasedmeasures) – RR & PR: Shareholder approval at AGM for CEO award • Performance condition tested at end of 4-yearperformance period – RR: Pre vest assessment (riskbasedmeasures) – PR: Relative and absolute TSR hurdles For both RR and PR: Deferral period = 4-year Performance Period + Holding Period (HP) Year 4 CEO: 33% / DE: 50% Year 5 CEO: 33% / DE: 50% Year 6 CEO 34% All variable remuneration is subject to the Board’s ongoing discretion to apply in-year adjustments, malus and clawback 42 Australia and New Zealand Banking Group Limited 2024 Annual Report 42 Australia and New Zealand Banking Group Limited 2024 Annual Report ![]() For deferred variable remuneration for the CEO and Disclosed Executives, we calculate the number of deferred shares to be granted based on the VWAP of the shares traded on the ASX in the five trading days leading up to and including 1 October (i.e., in line with the beginning of the financial year). Allocations prior to the 2022 financial year were based on the VWAP in the five trading days leading up to and including the date of grant. The VWAP used for disclosure and expensing purposes is the one-day VWAP at the date of grant, which is in line with the Accounting Standard. In some cases, we may grant deferred share rights to executives instead of deferred shares. Each deferred share right entitles the holder to one ordinary share. #### 4.4 Performance assessment The following provides a summary of the performance assessment approach for the CEO and Disclosed Executives. Financial Accountability Regime (FAR) compliance is the gateway that requires the Accountable Person to meet their obligations in line with their Accountability Statement under the FAR since 15 March 2024 and, prior to that, under the Banking Executive Accountability Regime (BEAR). The ‘what’ assessment comprises of the ANZ Group Scorecard and Divisional Scorecard (excluding the CEO). Both the Group and Divisional Scorecard assessments are calculated as follows: Risk modifier 1 % x [Shareholder/Financial % + Customer % + People & Culture %]. The ‘what’ assessment outcome is then modified by the ‘how’ modifier. The ‘how’ modifier for Disclosed Executives considers a macro view of the individual’s approach to risk, demonstration of ANZ behaviours, and their contribution to building a successful Group Executive team. See below and Section 5.1.2 for CEO Leadership Modifier detail. 4.4.1 CEO performance The CEO’s STVR is assessed 100% on the ANZ Group Scorecard, adjusted by the CEO Leadership Modifier, which takes into consideration the CEO’s leadership of: • Key strategic priorities aligned with ANZ’s strategy • ANZ’s values/behaviours • ANZ’s risk and compliance standards This is a change from 2023, where performance informing the CEO’s STVR was split 50% between the Group Scorecard and the CEO’s individual objectives. With the change to 100% assessment on the ANZ Group Scorecard (as highlighted in the ‘People & Culture Commiee Chair leer’), the weighting to financial performance for the CEO is around 40% (moving to 50% in 2025); however noting that the CEO’s STVR is not formulaic. 1. Note for the CRO, Risk is incorporated in the Scorecard rather than as a separate modifier. 2. Performance arrangements for the CRO are addressed additionally by the Risk Committee. Performance arrangements for the GE & CEO, New Zealand are determined and approved by the ANZ NZ HR Committee/ANZ NZ Board in consultation with and endorsed by the People & Culture Committee/Board, consistent with their respective regulatory obligations. The Scorecard/strategic priorities are agreed upon by the Board at the beginning of the financial year (and are designed to be stretching). At the end of the financial year, the People & Culture Commiee reviews and recommends to the Board for approval the CEO’s overall performance taking into consideration: i. Performance against the ANZ Group Scorecard ii. CEO Leadership Modifier iii. Input from the Chairman iv. Compliance with FAR obligations v. Control function reports from the CRO (on risk management), CFO (on financial performance), GE T&C (on talent and culture maers) and Group General Manager Internal Audit (GGM IA) (on internal audit maers) vi. Material risk, audit and conduct events that have either occurred or come to light in the year vii. Input from both the Audit Commiee and the Risk Commiee of the Board 4.4.2 Disclosed Executive performance At the start of each year, stretching performance objectives are set for Disclosed Executives through Divisional Scorecards, aligned with the ANZ Group Scorecard. At the end of the financial year, the People & Culture Commiee recommends to the Board for approval the performance of each Disclosed Executive 2 against: i. the ANZ Group Scorecard (25% to 50% weighting) ii. their Divisional Scorecard (50% to 75% weighting) iii. ANZ’s values/behaviours iv. points iv) to vii) as detailed for the CEO The ANZ Group Scorecard weighting for Disclosed Executives varies based on role focus: • 50% weighting for enablement Disclosed Executives: Chief Financial Ocer, GE Strategy & Transformation, GE Talent & Culture, and GE Technology & Group Services • 25% weighting for Chief Risk Ocer, and frontline Disclosed Executives: GE Australia Retail, GE Australia Commercial, GE & CEO New Zealand, and GE Institutional FAR Compliance Gateway ‘How’ Modifier % Key Inputs: • Risk Standards assessment • How assessment • Leadership of key strategic priorities (CEO only) ANZ Group Scorecard assessment % Weighting CEO: 100% CRO: 25% Frontline DEs: 25% Enablement DEs: 50% Divisional Scorecard assessment % Weighting CEO: n/a CRO: 75% Frontline DEs: 75% Enablement DEs: 50% ‘What’ assessment Overall Performance Assessment % Key Inputs: • Informs STVR outcome 43 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 43 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 1. Except for the CRO who has a percentage weighting assigned to risk measures. 2. Considers all risk types including capital adequacy risk, liquidity and funding risk, credit risk, market risk, climate risk, non-financial risk and strategic risk. However, to reinforce the importance of collective accountability and contribution to Group outcomes, the Group weighting will increase from 25% to 40% in 2025 for frontline Disclosed Executives (excluding GE & CEO, New Zealand). The Chief Risk Ocer will retain a 25% weighting to reinforce independence of the role. Similar to the ANZ Group Scorecard, the Divisional Scorecards include the key elements of Shareholder/Financial, Customer, and People & Culture, with Risk acting as a modifier. 1 The weighting of each element varies to reflect the responsibilities of each individual’s role. TheShareholder/Financial element weightings range from 20% to 40% (increasing to 50% in 2025). 4.4.3 Alignment with the achievement of stretching performance objectives Variable remuneration for the CEO and Disclosed Executives is designed to align with the achievement of stretching performance objectives that support our business strategy and drive long-term sustainable outcomes for shareholders. Alignment with the achievement of stretching performance objectives Variable remuneration outcomes are based on a range of measures (as illustrated below), with material weight provided to non-financial measures in accordance with Prudential Standard CPS 511 Remuneration. STVR Mix of financial and non-financial measures Key individual assessment inputs ANZ’s values/behaviours ANZ’s risk and compliance standards FAR obligations ANZ Group Scorecard 25%-100% weighting Divisional Scorecards 50%-75% weighting Control function input Risk, Finance, T&C, Audit 2024 ANZ Group Scorecard Below are examples of key drivers of shareholder value Shareholder/Financial (40%) • Ensure dynamic, ecient and disciplined resource allocation, including capital, that creates more value and sustainable returns for customers, shareholders and society Customer (40%) • Create propositions that aract and engage more of our target customers, and improve their financial well-being, access to housing and sustainability • Build resilient business services and technology that more safely and eciently serve customers People & Culture (20%) • Establish an adaptable workforce and operating model that delivers innovation and outcomes for our customers more quickly Risk modifier (0% to 110%) • Maintain risk discipline focused on good customer and regulatory outcomes Additional financial and non-financial considerations in determining Group and individual performance and size of the ANZ Incentive Plan (ANZIP) variable remuneration pool include: • Broader financial performance • Quality of earnings and operating environment • Shareholder experience • Our Reward Principles (Section 4.1) LTVR Aligned to shareholder experience LTVR restricted rights Mostly non-financial LTVR performance rights Financial Prudential soundness Capital ratio and liquidity prudential minimums Risk measures • Material risk outcomes 2 • APRA active supervision • Risk culture TSR 75% relative TSR Performance relative to SFS comparator group 25% absolute TSR Focuses on positive growth – even when market is declining 44 Australia and New Zealand Banking Group Limited 2024 Annual Report 44 Australia and New Zealand Banking Group Limited 2024 Annual Report ![]() #### 4.5 Board discretion Variable remuneration is ’at risk’ remuneration and can range from zero to maximum opportunity. At the end of the financial year, theBoard 1 approves variable remuneration recommendations for the CEO and each Disclosed Executive following lengthy and detaileddiscussions and assessment, supported by comprehensive analysis of performance from a number of sources. Board discretion is applied when determining all CEO and Disclosed Executive variable remuneration outcomes including: • the size of the ANZIP variable remuneration pool; • STVR and LTVR outcomes for each financial year; • LTVR vesting outcomes (including pre vest assessment); and • downward adjustment of variable remuneration as part of consequence management, in accordance with applicable law and anyterms and conditions provided (see below). Downward adjustment of variable remuneration The Board may choose to exercise the following options or a combination of these at any time, but will always consider their use if any of the circumstances specified by Prudential Standard CPS 511 Remuneration occur. #1 to #3 below are applicable to all employees, while clawback (#4) is limited to select employees (primarily the CEO, Disclosed Executives and senior employees in jurisdictions where clawback regulations apply): 1. In year adjustment The most common type of downward adjustment, which reduces the amount of variable remuneration an employee may have otherwise been awarded for that year. 2. Further deferral/freezing Delays the decision to pay/ allocate variable remuneration, or further defers the vesting of deferred remuneration or freezes vested/unexercised shares and rights. This would typically only be considered where an investigation is pending/underway. 3. Malus Is an adjustment to reduce the value of all or part of deferred remuneration before it has vested. Malus is used in cases of more serious performance or behaviour issues. Any and all variable remuneration we award or grant to an employee is subject to ANZ’s on-going and absolute discretion to apply malus and adjust variable remuneration downward (including to zero) at any time before the relevant variable remuneration vests. 4. Clawback Is the recovery of variable remuneration that has already vested or been paid (up to two years from vesting/payment or a longer period as determined by Board discretion, policy or applicable law). This would typically only be considered if the other types of downward adjustment/other consequences are considered inadequate given the severity of the situation. Before any scheduled vesting of deferred remuneration, the Board (for the CEO, Disclosed Executives and other specified roles) and/or the Enterprise Accountability Group (EAG) (for other employees) considers whether any further deferral, malus, or clawback should be applied (Section 6). #### 4.6 Alignment of executive and shareholder interests Variable remuneration for the CEO and Disclosed Executives is designed to align executive and shareholder interests. Alignment of executive and shareholder interests More broadly, ANZ’s variable remuneration structure supports the alignment of executives with the interests of shareholders through: Substantial shareholding requirements (around 80% of variable remuneration at maximum opportunity deferred into ANZ equity, and 75% for the CRO to ensure alignment with shareholder interests and to ensure focus on long-term value creation) Significant variable remuneration deferral up to 5 and 6 years in ANZ equity (which also supports retention) Significant weighting to the LTVR component (around 60% of VR) which includes relative and absolute TSR hurdles Consideration of cash profit and economic profit in determining ANZIP variable remuneration pool Consideration of theshareholder experience (in respect of the share price anddividend) in determining ANZIP variable remuneration pool and individual outcomes 1. Remuneration arrangements for the Group Executive and CEO, New Zealand are determined and approved by the ANZ NZ Board in consultation with and endorsed by the Board, consistent with their respective regulatory obligations. 45 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 45 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() #### 4.7 Remuneration mix The CEO and Disclosed Executives 1 have an aligned remuneration mix of 30% FR, 30% STVR and 40% LTVR at maximum/full opportunity, and structure, with the exception of longer deferral for the CEO in line with APRA’s deferral requirements. CEO Remuneration mix – CEO ($m) 2.500 2.500 +1.200 +1.300 +1.688 +1.688 2.500 Minimum opportunity 8.375 (44% cash, 56% equity) Maximum/full opportunity 30% 30% 40% LTVR PRLTVR RRSTVR deferred sharesSTVR cashFR Disclosed Executives The dollar amounts in the below example are for illustrative purposes only, and are based on the FR value of $1.25m. Remuneration mix – Disclosed Executives 1 ($m) 1.250 Minimum opportunity 4.188 (45% cash, 55% equity) Maximum/full opportunity 1.250 1.250 +0.625 +0.625 + 0.844 +0.844 30% 30% 40% LTVR PRLTVR RRSTVR deferred sharesSTVR cashFR Chief Risk Ocer To preserve the independence of the role and to minimise any conflicts of interest in carrying out the risk control function across the organisation, the CRO’s remuneration arrangements dier to other Disclosed Executives. While the STVR opportunity (100% of FR) is the same as the CEO and Disclosed Executives, the LTVR opportunity is dierent (100% of FR instead of 135% of FR) reflecting the delivery of LTVR as 100% restricted rights (instead of 50% restricted rights and 50% performance rights). Maximum variable remuneration opportunity is 200% of FR for the CRO. The remuneration mix is 33.3% FR/33.3% STVR/33.3% LTVR. Former Acting Group Executive, Talent & Culture Due to the acting nature of R Howell’s appointment his remuneration arrangements diered to other Disclosed Executives. For the time spent in this acting role, his FR was set at $700k per annum from 1 June 2023 and increased to $703k from 1 July 2023 (due to the impact of the Superannuation Guarantee rate change). His VR maximum opportunity was set at 150% of FR (his remuneration mix was therefore 40% FR/60% VR). His VR in the acting role was delivered as 60% cash and 40% as shares deferred over years 4 to 5 to ensure compliance with CPS 511 deferral requirements. 1. Excluding CRO. 46 Australia and New Zealand Banking Group Limited 2024 Annual Report 46 Australia and New Zealand Banking Group Limited 2024 Annual Report ![]() 5. Executive remuneration outcomes 5.1 Short term variable remuneration (STVR) 5.2 Long term variable remuneration (LTVR) 5.3 2024 Received remuneration 5.4 2024 CEO remuneration comparison with prior years Remuneration outcomes have been presented in the following three ways: 1. Awarded remuneration – STVR and LTVR (Sections 5.1.2, 5.2.1 and 5.4) 2. Received remuneration (Section 5.3) 3. Statutory remuneration (Section 9.2) #### 5.1 Short term variable remuneration (STVR) 5.1.1 ANZ Group Scorecard – approach and 2024 outcomes The ANZ Group Scorecard is approved by the Board at the start of each year. It plays a key role to: Message internally what maers most Reinforce the importance of sound management in addition to risk, shareholder/financial, customer, and people and culture outcomes Inform focus of eort, prioritisation and decision- making across ANZ Assessment of performance against the ANZ Group Scorecard provides a key input (as illustrated in Section 4.4): In determining the size of the ANZ Incentive Plan (ANZIP) variable remuneration pool, which funds individual variable remuneration outcomes for all employees/STVR for Disclosed Executives (excluding the CEO to help mitigate potential conflicts of interest) In the overall performance assessment for the CEO (100% weighting, adjusted based on a CEO Leadership Modifier) and Disclosed Executives (25% – 50% weighting), which informs the STVR awarded outcomes in Section 5.1.2 As managing risk appropriately is fundamental to the way ANZ operates, risk forms an integral part of the assessment, directly impacting theoverall ANZ Group Scorecard outcome (a modifier ranging from 0% to 110% of the ANZ Group Scorecard assessment). On the following pages we have outlined ANZ’s 2024 Group Scorecard and provided a summary of outcomes for each of the key performance categories to inform the overall assessment for 2024. 47 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 47 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() Shareholder/Financial 40% weight: 110%/Above Target Key objectives Outcomes Ensure dynamic, ecient and disciplined resource allocation, including capital, that creates more value and sustainable returns for customers, shareholders and society Below Target Above Deliver Group economic profit 1 to plan or beer in a high-quality manner, targeting sustainable returns Eectively manage total cost growth, in support of our 3yr Strategic Plan (including our 2024 productivity ambition) • Economic profit exceeded plan by $88m aer removing the impact from Suncorp Bank, which was not included in the original plan. • Total cost growth was 6%. Excluding Suncorp Bank division, the cost growth of 4% was marginally higher than plan as a result of higher restructuring costs to further our productivity agenda. Continued inflation and high levels of investment directed into growth, productivity and simplification initiatives were partially oset by disciplined cost management and productivity initiatives. • Return on equity (ROE) exceeded target by 36 basis points aer removing the impacts from Suncorp Bank earnings not included in the original plan. Customer 40% weight: 88%/Below Target Key objectives Outcomes • Create propositions that aract and engage more of our target customers, and improve their financial well-being, access to housing and sustainability • Build resilient business services and technology that more safely and eciently serve customers Below Target Above Suncorp Bank: Ensure Suncorp integration is on track Australia Retail: Make ANZ Plus a success including Plus Home loan in market and migration of initial cohort from Classic to Plus Australia Commercial: Continue to execute Commercial strategy with targeted growth in chosen segments and an increase in digital lending Institutional: Deliver against Environmental, Social and Governance (ESG) targets and extend leadership in platforms New Zealand: Continue to make banking easier • Suncorp Bank acquisition was completed, with a successful day 1 cutover. • Australia Retail ANZ Plus growth has been strong, with Deposit Funds Under Management (FUM) of $16.5bn and customer numbers of 850k surpassing target, coupled with the rollout of additional features and continued improvement in Net Promoter Score (NPS) 2 . However, ANZ Plus Home Loans have been slower to market and achieved slower growth than target. • Australia Commercial maintained sound delivery of initiatives to support strategy and achieved targeted growth in specific segments. NPS continued to improve year-on-year. Digital lending exceeded target. Flat growth with Business Owner/Home Owner FUM. • Institutional achieved well beyond the 2024 target set to make progress on funding and facilitating $100bn by the end of 2030 in social and environmental activities. Significant mandates won for Payment Platforms and named best bank for cash management globally by Global Finance. • New Zealand made significant progress on the Ngā Tapuwae program (to move ANZ NZ core to cloud and redesign business for greater resilience, agility and lower cost) – the key enabler in making banking easier for customers in New Zealand. Delivered first Climate Related Disclosure for New Zealand Climate standards. 1. 2. See footnotes over page. 48 Australia and New Zealand Banking Group Limited 2024 Annual Report 48 Australia and New Zealand Banking Group Limited 2024 Annual Report ![]() People & Culture 20% weight: 100%/On Target Key objectives Outcomes Establish an adaptable workforce and operating model that delivers innovation and outcomes for our customers more quickly Below Target Above Retain high performers (particularly those with the skills to support our business transformation) Maintain a purpose led culture, with strong employee engagement, and improved diversity and inclusion • Engagement continued to be very high (84% vs 87% in 2023). This engagement is evidenced beyond survey data in other measures such as participation in the ‘Lead@ANZ program’ (over 75% of eligible leaders having commenced the program), around 1,300 engineers having completed the ‘Engineering Career Pathways program’ and the number of sta who chose to be upskilled in ESG (3,249 completed the ‘ESG@ANZ learning program’). • Retention of high performers was also strong, despite a more competitive employment market. • A new Diversity and Inclusion (D&I) target was created in 2024 (aligned to our D&I strategy), and improvement from the baseline was positive. We continued to make progress on Women in Leadership (38.8%, up from 37.3% in 2023) and also maintained our #1 ranking amongst major bank peers in Glassdoor 3 employer of choice ratings. Risk modifier 0 to 110%: 90%/Below Target Maintain risk discipline focused on good customer and regulatory outcomes • Strong credit outcome with no material credit events recorded. Overall, credit and market risk has been well managed, and liquidity risk remains appropriate. • Ongoing progress in delivering key regulatory commitments and upliing NFR management, however, the recent impost of an additional $250m operational risk overlay on top of our current $500m overlay is acknowledged as a clear sign that we need to do more in this area, and this will be a significant focus for 2025. • The enterprise’s risk culture has been assessed as Needs Improvement in 2024. Regulatory concerns around our Markets business and NFR management have contributed to this re-assessment. Importantly, a high ‘Speak Up’ index of 81% was achieved, reflecting sustained eorts to encourage people to speak up and challenge each other respectfully. • No repeat adverse audits, no material Risk Appetite Statement breaches, and no material overdue regulatory issues. Overall Group Performance Assessment Assessment: 90%/Below Target Overall performance (excluding the impact of the Risk Modifier), is assessed at 99% or slightly below target, despite a challenging economic and socio-political environment. This reflects our strong financial performance with all business lines each contributing strongly, solid progress against our long-term strategic objectives, and good customer and people outcomes. However, while ANZ delivered against the majority of the Group Scorecard objectives, the recent issues in the Markets business, and the additional $250m capital overlay from APRA in response to concerns regarding NFR maers, resulted in the application of a Risk Modifier of 90%, and therefore an overall performance assessment for 2024 of 90% (rounded) or Below Target. The Board notes that STVR outcomes for the CEO and Disclosed Executives also take into consideration performance against individual objectives. 1. Economic profit is a risk adjusted profit measure used to evaluate business unit performance and is not subject to audit by the external auditor. Economic profit is calculated via a series of adjustments to cash profit with the economic credit cost adjustment replacing the accounting credit loss charge; the inclusion of the benefit of imputation credits (measured at 70% of Australian tax) and an adjustment to reflect the cost of capital. 2. Net Promoter Score (NPS) is a customer loyalty metric used globally to evaluate a company’s brand, products or services. Net Promoter® and NPS® are registered trademarks and Net Promoter Score and Net Promoter System are trademarks of Bain & Company, Satmetrix Systems and Fred Reichheld. 3. Glassdoor is a website where employees and former employees anonymously review companies and their management. 49 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 49 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 5.1.2 CEO and DEs STVR – 2024 outcomes At the end of the financial year, the People & Culture Commiee makes a recommendation to the Board for approval in respect of STVR outcomes. STVR will vary up or down year-on-year, it is not guaranteed, and may range from zero to a maximum opportunity. Where expectations are met, STVR is likely to be awarded around 80% of maximum opportunity. Where performance is below expectations, STVR will be less (potentially down to zero), and where above expectations, STVR will be more (potentially up to maximum opportunity). The degree of variance in individual STVR outcomes for Disclosed Executives reflects the weighting of the Group component (i.e., roles with 50% Group weighting will generally have less dierentiation), and relative performance of the dierent areas/individuals. Summary of how the 2024 overall performance assessment has impacted the STVR Allocation 2024 remuneration outcomes reflect both the overall performance of the Group and the performance of each individual/Division. The following provides a summary of how the performance assessment has been impacted as a result of the Markets and NFR maers, and therefore the resulting impact on the 2024 awarded STVR. 2024 STVR Allocation (Target: 80%; Max: 100% as % of FR) 1. The term ‘accountability’ is used in the broader sense – i.e., taken to mean that the CEO/Disclosed Executives are ultimately responsible for the effective management of risk and the performance of the bank, and therefore should bear appropriate consequences for the impacts of the matters. As used in this report, the term should not be taken to mean accountability under FAR, unless otherwise stated. Where referring to FAR accountability, the term ‘Accountability’ will be capitalised. The STVR awarded tables show a year-on-year comparison of STVR awarded to the CEO, and Disclosed Executives for the 2023 and 2024 performance periods. STVR awarded reflects actual cash and the deferred shares component of STVR awarded in respect of the relevant financial year. As non-cash components are subject to future vesting outcomes, the awarded value may be higher or lower than the future realised value. Awarded STVR Current Fixed Remuneration STVR Target (80%) Additional downward Board discretion applied to select individuals, to ensure a fair and proportionate STVR outcome with respect to executive accountability 1 for the Markets and NFR maers + / - Adjustment (if applicable) Board discretion Awarded STVR Group Risk modifier adjusted Individual Risk outcome adjusted All DEs impacted ANZ Group Scorecard assessment % Divisional Scorecard assessment % Overall Performance Assessment % 50 Australia and New Zealand Banking Group Limited 2024 Annual Report 50 Australia and New Zealand Banking Group Limited 2024 Annual Report ![]() Awarded STVR in the relevant financial year – CEO Actual STVR STVR as % of Financial year STVR maximum opportunity $ Total STVR $ STVR cash $ STVR deferred shares $ Target opportunity Maximum opportunity CEO S Ellio 2024 2,500,000 1,300,000 650,000 650,000 65% 52% 2023 2,500,000 2,400,000 1,160,000 1,240,000 120% 96% Board assessment of CEO Leadership Modifier The CEO has delivered well against the key factors forming part of the CEO Leadership Modifier. 1. Led/driven performance against theANZ Group Scorecard The CEO’s leadership of the bank’s key priorities resulted in strong progress against ANZ’s longer term strategy, and good overall performance against 2024 objectives (Section 5.1.1). Key leadership highlights include: • Final approval and acquisition of SuncorpBank • The ongoing successful rollout of ANZ Plus with strong adoption numbers, FUM growth and NPS, although acknowledging the slower than planned progress in some areas (e.g., home loans) • Exceeding many ESG targets • Significant productivity saves, to enable investment in key platforms for long term success While 2024 has been a year of many successful achievements, the Board’s reduction to the Risk Modifier resulted in aBelow Target Group Scorecard assessment overall. 2. ANZ values/behaviours The CEO’s personal role modelling of the ANZ values and behaviours is exemplary, and as a result he is highly respected by ANZ sta and regarded as an authentic leader. Externally, the CEO demonstrates industry leadership on a range of maers, including his advocacy on making banking more accessible to the general population, along with his regular engagement with non-profit partners and community groups. 3. Individual risk/compliance assessment The CEO actively leads, encourages and cultivates a culture where people seek to understand, measure and proactively manage risk and compliance maers. He sets the tone from the top regarding the importance of risk management and speak up culture across the bank, as evidenced by the improvement from 83% to 88% for the response to “At ANZ there are appropriate risk consequences when risk management processes and behaviours are not followed.” While the CEO is ultimately accountable for the Markets and NFR maers, he has provided strong positive leadership in response to each maer. Board discretion While on balance the CEO’s performance against the ‘what’ and ‘how’ assessments were good, the Markets and NFR maers have impacted ANZ’s reputation, the confidence of customers, shareholders and regulators, and increased the risk capital overlay on ANZ by $250m. As a result, the Board has applied its discretion to ensure a fair and proportionate performance and STVR outcome for the CEO, given he has ultimate accountability for these maers. CEO The Board determined that an STVR outcome of $1.3m (65% of target/52% of maximum opportunity) was appropriate for 2024 having regard to the overall performance of the Group, the CEO Leadership Modifier, and the Board’s application of downward adjustment due to risk and reputation considerations arising from the Markets and NFR maers. As a result, the CEO’s STVR outcome is down 46% year-on-year. The Board assessed the CEO’s 2024 performance as follows: ‘What’ assessment ‘How’ assessment Basis for: Assessed as: Basis for: Assessed as: ANZ Group Scorecard (Section 5.1.1) (100% weighting) 90%/ Below Target CEO Leadership Modifier (see below) Overall: Met 1. Led/driven performance against the ANZ Group Scorecard (including leadership of personal objectives aligned to the ANZ Group Scorecard) Met 2. ANZ values/behaviours Role Modelled 3. Individual risk/compliance assessment Consistently demonstrated Board discretion: Downward adjustment to reflect impacts arising from the Markets and NFR maers Overall performance assessment of 65% of target aligned to STVR outcome 51 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 51 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() Awarded STVR in the relevant financial year – Disclosed Executives Actual STVR STVR as % of Financial year STVR maximum opportunity $ Total STVR $ STVR cash $ STVR deferred shares $ Target opportunity Maximum opportunity Current Disclosed Executives M Carnegie 2024 1,300,000 865,000 432,500 432,500 83% 67% 2023 1,250,000 1,100,000 550,000 550,000 110% 88% E Clements 1 2024 784,000 470,400 235,200 235,200 75% 60% K Corbally 2024 1,300,000 624,000 312,000 312,000 60% 48% 2023 1,250,000 1,065,000 532,500 532,500 107% 85% F Faruqui 2024 1,275,000 885,000 442,500 442,500 87% 69% 2023 1,250,000 1,200,000 600,000 600,000 120% 96% G Florian 2024 1,262,500 865,000 432,500 432,500 86% 69% 2023 1,250,000 995,000 497,500 497,500 100% 80% C Morgan 1 2024 1,135,000 650,000 325,000 325,000 72% 57% 2023 627,000 500,000 250,000 250,000 100% 80% A Strong 1 2024 850,000 580,000 290,000 290,000 85% 68% 2023 690,000 630,200 315,100 315,100 114% 91% A Watson 2 2024 1,129,635 797,660 398,830 398,830 88% 71% 2023 1,106,505 945,140 472,570 472,570 107% 85% M Whelan 2024 1,500,000 595,000 297,500 297,500 50% 40% 2023 1,460,000 1,460,000 730,000 730,000 125% 100% Former Disclosed Executives R Howell 1 2024 21,490 n/a n/a n/a n/a n/a 2023 348,068 300,000 180,000 120,000 108% 86% 1. STVR based on time as a Disclosed Executive in either 2023 (C Morgan, A Strong, R Howell) or 2024 (E Clements, R Howell). 2. Paid in NZD and converted to AUD. Year to date average exchange rate used to convert NZD to AUD as at 30 September for the relevant year. #### 5.2 Long term variable remuneration (LTVR) LTVR reinforces the focus on achieving longer term strategic objectives, driving outperformance relative to peers, and creating long- term sustained value for all stakeholders. LTVR will be awarded based on full opportunity unless the LTVR restricted rights pre grant assessment results in any reduction (and is also subject to shareholder approval for the CEO). Disclosed Executives STVR outcomes for Disclosed Executives continue to dier both year-on-year and between executives demonstrating the variability in Group and individual performance year-on-year and the at risk nature of this element of remuneration (i.e., it is not guaranteed and may be adjusted up or down ranging from zero to a maximum opportunity). In 2024, STVR outcomes for all Disclosed Executives have been impacted by the Markets and NFR maers (i.e., down 29% on average year-on-year for those in role for a full year in 2023 and 2024), due to the: • impact of the Risk Modifier outcome on the Group Scorecard assessment; and • the application of a -20% individual Risk Modifier adjustment for most Disclosed Executives to reflect collective executive accountability for the NFR challenges. The risk assessment impact was greatest for the CRO and GE, Institutional to reflect their greater overall accountability for these maers (i.e., issues took place within their area of control and influence), resulting in an average STVR reduction of 50% year-on-year. The average STVR outcome for current Disclosed Executives is 75% of target (60% of maximum opportunity). This reflects both the overall assessment of ANZ Group performance as Below Target (Section 5.1.1), which is weighted 25% or 50%, and also individual performance (Section 4.4.2) which is weighted 75% or 50% depending on role. Outcomes range from 50% to 88% of target (or 40% to 71% of maximum opportunity). To ensure an overall fair and proportionate consequence for the Markets and NFR maers, downward Board discretion was applied to STVR outcomes for select individuals (refer to Section 6 for consequence considerations). The 2024 STVR awarded outcome for EClements is based on her time as a Disclosed Executive during 2024. R Howell was awarded nil STVR for the 8 days he was a Disclosed Executive during 2024. 52 Australia and New Zealand Banking Group Limited 2024 Annual Report 52 Australia and New Zealand Banking Group Limited 2024 Annual Report ![]() A pre vest assessment will determine the number of restricted rights that ultimately vest, and performance against TSR hurdles will determine the level of vesting of performance rights and subsequent value of performance rights at the end of the performance period. LTVR (restricted rights and performance rights) is designed to strengthen the alignment of executive interests with shareholders, and performance rights provide a strong link between the reward for executive performance and TSR returns over the next four-year period. 5.2.1 CEO and DEs 1 LTVR – 2024 outcomes 2024 Awarded LTVR and pre grant assessment outcome Following completion of the 2024 LTVR pre grant assessment, based on its outcome in October 2023, the Board determined that the 2024 LTVR (awarded at the start of the 2024 financial year) should be awarded at full opportunity to Disclosed Executives (November 2023) and the CEO (December 2023 post AGM). The restricted rights component of LTVR was subject to a pre grant assessment by the Board which determined that the award should be made at full value (i.e., no reduction); and will be subject to a pre vest assessment by the Board of non-financial measures at the end of the four-year performance period to determine whether the restricted rights should vest in full. Restricted rights 2024 pre grant assessment (Section 9.1.1) Step Action Outcome Step 1 Assess Prudential Soundness Met Step 2 Assess Risk Measures Met Step 3 Apply Board discretion No adjustment Pre grant assessment outcome 100% CEO LTVR: Shareholders approved at the 2023 AGM a 2024 LTVR award of $3,375,000 (135% of FR), delivered in the form of 50% restricted rights and 50% performance rights. Disclosed Executives LTVR: 2024 LTVR awarded at full opportunity (135% of FR, and 100% for the CRO). Note that R Howell was not eligible in his acting capacity. Section 4.3 outlines delivery details. 2024 Awarded LTVR – CEO and Disclosed Executives 2024 LTVR Allocation (Full Opportunity 1 : 135% of FR; 2024 LTVR awarded at 100% of Full Opportunity) Overall 135% of FR 2024 Fixed Remuneration 2024 Fixed Remuneration LTVR Restricted Rights opportunity (67.5%) 2024 Pre grant assessment Outcome: 100% LTVR Restricted Rights Allocation: 67.5% of Fixed Remuneration LTVR Performance Rights Allocation: 67.5% of Fixed Remuneration LTVR Performance Rights opportunity (67.5%) 1. CRO role: Full opportunity at 100% of Fixed Remuneration and delivered wholly in restricted rights. Actual LTVR 1 Total LTVR 1 $ LTVR restricted rights $ LTVR performance rights $ CEO and Current Disclosed Executives S Ellio 3,375,000 1,687,500 1,687,500 M Carnegie 1,755,000 877,500 877,500 E Clements 1,080,000 540,000 540,000 K Corbally 1,300,000 1,300,000 - F Faruqui 1,721,250 860,625 860,625 G Florian 1,704,375 852,188 852,188 C Morgan 1,532,250 766,125 766,125 A Strong 1,147,500 573,750 573,750 A Watson 2 1,524,903 762,451 762,451 M Whelan 2,025,000 1,012,500 1,012,500 1. LTVR full opportunity based on FR at start of financial year. 2. Awarded in NZD and converted to AUD. Year to date average exchange rate used to convert NZD to AUD as at 30 September for the relevant year. 53 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 53 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 2024 Received LTVR 2019 performance rights granted to the CEO in December 2019 and Disclosed Executives (excluding the CRO) in November 2019, reached the end of their performance period in November 2023. Based on performance against hurdles, 100% of the performance rights lapsed and executives received no value from this award. Performance rights vesting outcomes Over four years Hurdle Grant date 1 First date exercisable 1 ANZ TSR/ CAGR 2 TSR Median TSR/ CAGR 2 TSR threshold target Upper quartile TSR/CAGR 2 TSR maximum target % vested Overall performance rights outcome 75% relative TSR Select Financial Services (SFS) comparator group 22-Nov-19 22-Nov-23 12.32% 18.64% 47.58% 0% 100% lapsed 25% absolute CAGR 2 TSR 22-Nov-19 22-Nov-23 2.95% 8.5% 12.75% 0% 1. Grant date for the CEO was 17 December 2019, and date first exercisable was 17 December 2023. The CEO’s performance period was the same as the performance period for Disclosed Executives. 2. Compound Annual Growth Rate (CAGR). 5.2.2 CEO and DEs 1 LTVR – 2025 outcomes Following completion of the 2025 LTVR pre grant assessment, the Board determined in October 2024 that the 2025 LTVR restricted rights (50% of full LTVR opportunity), should be awarded at 90% of full opportunity to Disclosed Executives (November 2024) and the CEO (December 2024 post AGM) due to risk considerations. This adjustment formed part of a holistic assessment (i.e., including consideration of risk adjustments impacting STVR), to ensure a proportionate collective impact for the NFR maers contributing to the additional capital overlay (Section 6). This would result in a total 2025 LTVR award (awarded at the start of the 2025 financial year) at 95% of full opportunity (90% of full opportunity for the CRO, whose LTVR is delivered wholly in restricted rights). The restricted rights component of LTVR was subject to a pre grant assessment by the Board (outcomes are summarised below); and will be subject to a pre vest assessment by the Board of non-financial measures at the end of the four-year performance period to determine whether the restricted rights should vest in full. Restricted rights 2025 pre grant assessment (Section 9.1.1) Step Action Outcome Step 1 Assess Prudential Soundness Met Step 2 Assess Risk Measures Not met Step 3 Apply Board discretion No adjustment Pre grant assessment outcome 90% The performance rights component of LTVR is subject to TSR hurdles, which will determine the level of vesting and subsequent value of performance rights at the end of the performance period. CEO LTVR: 2025 LTVR subject to shareholder approval at the 2024 AGM – 2025 LTVR award of $3,206,250 (128.25% of FR), delivered in the form of 47% restricted rights and 53% performance rights. Disclosed Executives LTVR: 2025 LTVR awarded at 90% of their full opportunity (128.25% of FR, and 90% for the CRO), delivered as part restricted rights and part performance rights (except for the CRO whose LTVR is delivered wholly in restricted rights). 1. See footnote over page. 54 Australia and New Zealand Banking Group Limited 2024 Annual Report 54 Australia and New Zealand Banking Group Limited 2024 Annual Report ![]() 2025 LTVR Allocation (Full Opportunity 1 : 135% of FR; 2025 LTVR awarded at 95% of Full Opportunity) u Overall 128.25% of FR (95% of full opportunity) 2025 Fixed Remuneration 2025 Fixed Remuneration LTVR Restricted Rights opportunity (67.5%) 2025 Pre grant assessment Outcome: 90% 2 LTVR Restricted Rights Allocation: 60.75% of Fixed Remuneration LTVR Performance Rights Allocation: 67.5% of Fixed Remuneration LTVR Performance Rights opportunity (67.5%) 1. CRO role: Full opportunity at 100% of Fixed Remuneration, overall awarded at 90% of full opportunity (as delivered wholly in restricted rights). 2. Downward adjustment due to risk considerations in2024. All DEs impacted. #### 5.3 2024 Received remuneration This table shows the remuneration the CEO and Disclosed Executives actually received in relation to the 2024 financial year as cash paid, or in the case of prior equity awards, the value which vested in 2024. FR adjustments were received by Disclosed Executives eective 1 October 2023 to maintain or improve market positioning, approved by the Board in October 2023. There were no other adjustments to FR for Disclosed Executives in 2024. 2024 Received remuneration – CEO and Disclosed Executives: Received value includes the value of prior equity awards which vested in that year Fixed remuneration $ Cash variable remuneration $ Total cash $ Deferred variable remuneration which vested during the year 1 $ Other deferred remuneration which vested during the year 1 $ Actual remuneration received 2 $ Deferred variable remuneration which lapsed/ forfeited during the year 1,3 $ CEO and Current Disclosed Executives S Ellio 2,500,000 650,000 3,150,000 958,134 - 4,108,134 (4,297,414) M Carnegie 4 1,300,000 432,500 1,732,500 526,735 - 2,259,235 (992,392) E Clements 5 784,000 235,200 1,019,200 196,188 - 1,215,388 - K Corbally 4 1,300,000 312,000 1,612,000 1,057,966 - 2,669,966 - F Faruqui 4 1,275,000 442,500 1,717,500 697,515 - 2,415,015 (1,680,521) G Florian 4 1,262,500 432,500 1,695,000 516,838 - 2,211,838 (562,329) C Morgan 4,6 1,135,000 325,000 1,460,000 - 242,326 1,702,326 - A Strong 4 850,000 290,000 1,140,000 329,428 - 1,469,428 - A Watson 4,7 1,129,635 398,830 1,528,465 584,674 - 2,113,139 - M Whelan 4 1,500,000 297,500 1,797,500 656,862 - 2,454,362 (1,753,220) Former Disclosed Executives R Howell 5 14,327 n/a 14,327 - - 14,327 - 1. Deferred variable remuneration which either vested or lapsed/forfeited during the year is the point in time value of previously deferred remuneration granted as deferred shares, deferred share rights and/or restricted rights/performance rights, and is based on the one day Volume Weighted Average Price (VWAP) of the Company’s shares traded on the ASX on the date of vesting or lapsing/forfeiture multiplied by the number of deferred shares/deferred share rights and/or restricted rights/performance rights. 2. The sum of fixed remuneration, cash variable remuneration and deferred variable remuneration which vested during the year. 3. The lapsed/forfeited values relate to 100% of the performance rights awarded in November/December 2019 lapsing in November/December 2023 due to the performance hurdles not being met. 4. Fixed remuneration reflects increases applied from 1 October 2023 to maintain or improve market positioning (M Carnegie, K Corbally, F Faruqui, G Florian, C Morgan, A Strong, A Watson, M Whelan). 5. Fixed remuneration based on time as a Disclosed Executive (E Clements, R Howell). 6. Other deferred remuneration for C Morgan relates to deferred remuneration forfeited and bonus opportunity forgone as a result of joining ANZ, that was deferred in prior years as deferred shares and vested during the year. 7. Paid in NZD and converted to AUD. Year to date average exchange rate used to convert NZD to AUD as at 30 September for the relevant year. 55 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 55 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() Awarded Received Statutory Awarded remuneration reflects actual cash and the deferred shares component of STVR awarded in the year. As non-cash components are subject to future vesting outcomes, the awarded value may be higher or lower than the future realised value. Awarded remuneration is lower in 2024 (compared to 2023), due to the notably lower STVR in 2024. Note, STVR is awarded at the end of the year. Received remuneration reflects the actual remuneration received in the year (i.e., cash paid and the value of previously awarded STVR deferred shares and LTVR performance rights whichvested in the year). The amount received is lower in 2024 (compared to 2023), due to the notably lower STVR in2024. Note that whilst all LTVR due tovest in 2024 lapsed, for comparative purposes, in 2023 there was no LTVR due to vest as a result of changing from a three to four-year performance period in November 2019. Statutory remuneration reflects remuneration in accordance with Australian Accounting Standards which includes FR and the amortised accounting value of equity based variable remuneration, not the actual awarded or received value in respect of the relevant financial year (i.e., includes the value of STVR and LTVR expensed in the year). This is dierent to remuneration received in 2024 (which includes prior year awards which vested). Fixed remuneration $ STVR $ LTVR $ Total remuneration $ Total remuneration $ Total remuneration $ 2024 2,500,000 1,300,000 3,375,000 7,175,000 4,108,134 5,699,642 2023 2,500,000 2,400,000 3,375,000 8,275,000 4,579,413 6,186,508 #### 5.4 2024 CEO remuneration comparison with prior years CEO – Summary of 2023 and 2024 total remuneration 56 Australia and New Zealand Banking Group Limited 2024 Annual Report 56 Australia and New Zealand Banking Group Limited 2024 Annual Report ![]() 6.1 Board considerations of #### consequences for material #### risk, audit and conduct events Considerations regarding accountability and consequences for our most senior executives are considered and determined by the People & Culture Commiee and Board, including the application of malus and clawback (Section 4.5) for the CEO and Disclosed Executives. When determining consequences, consideration is given to the level of accountability, and the severity of the issue, including customer impacts. Consequences may include, for example, one or more of the following: counselling, formal warnings, impacts to in year performance and remuneration outcomes or application of malus to previously deferred remuneration and ultimately termination of employment or clawback for the most serious issues. As part of our standard process, reports on the most material risk, audit and conduct issues are presented to the People & Culture, Risk and Audit Commiees at a joint meeting. This information is considered by the Board when considering the performance ofthe Group, the ANZIP variable remuneration pool for all employees and in determining the performance and remuneration outcomes of the CEO andDisclosed Executives. #### 6.2 Additional Board #### governance and oversight regarding the Markets and #### non-financial risk maers in2024 Further to consideration of material risk, audit and conduct events, the Board put inplace in 2024 additional governance to ensure it is well placed to determine accountability consequences on issues associated with the various Markets maers. As part of the additional governance, the Board also considered ANZ’s NFR framework, particularly the additional $250m capital overlay issued byAPRA. In reviewing these maers, and to ensure the application of fair and proportionate consequences that are based on clearly established evidence and facts, the Board: • appointed its own independent legal advisors to review material resulting from three external reviews, and an independent Markets expert to ensure Board independence and that FAR obligations had been met; • established a sub-commiee consisting of the Board Chair and three Board directors with experience in Markets trading; • spent considerable time deliberating remuneration outcomes for the CEO and Disclosed Executives taking into consideration the findings from the accountability reviews, and the fact that the Executive Commiee have collective accountability for the performance of the bank; and • sought independent advice in relation tothe application of the remuneration consequences for the CEO and Disclosed Executives. The Board views that relevant Executive Commiee members should bear appropriate accountability for actions and outcomes that took place within their area of control or influence, irrespective of whether they themselves were personally involved or were otherwise at fault, by virtue of their role and seniority. Similarly, with respect to the NFR maers, the Board considered itappropriate to hold the Executive Commiee collectively accountable. The Board has determined for the CEOand Disclosed Executives, that the deferred remuneration available in November/December 2024, should vest infull (subject to performance hurdles). However, as investigations into the maers above are ongoing, the Board view that there is sucient deferred remuneration on-foot (Section 9.3), to apply downward adjustment should further information come to light that justifies the application of additional consequences. 6. Accountability and Consequence Framework 6.1 Board considerations of consequences for material risk, audit and conduct events 6.2 Additional Board governance and oversight regarding theMarkets and non-financial risk maers in 2024 6.3 Summary of consequences applied to the CEO and Disclosed Executives 6.4 Role of the Enterprise Accountability Group 6.5 Material positive risk events 6.6 Risk role models 6.7 Compliance with Prudential Standard CPS 511 Remuneration 6.8 Evolving the Accountability & Consequence Framework 6.9 Speak up culture 6.10 Application of consequences 57 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 57 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() #### 6.3 Summary of consequences applied to the CEO and Disclosed Executives The following summarises how consequences related to the Markets and NFR maers have been considered overall for the CEO and Disclosed Executives (DEs), both in terms of ANZ’s performance and remuneration framework and the additional Board governance put in place to address these issues in 2024. Summary of 2024 Consequence Approach and Outcomes Note, no malus or clawback was applied to the remuneration of the CEO and Disclosed Executives during 2024. While the 2024 Remuneration Report focuses on consequences for the CEO and Disclosed Executives, the Board has and will continue to provide oversight (as appropriate), of consequence considerations for other current and former employees should there be findings of accountability regarding the Markets maers. #### 6.4 Role of the Enterprise Accountability Group The Enterprise Accountability Group (EAG) is the governance mechanism for the operation of the Accountability and Consequence Framework (A&CF), and reviews accountability and consequences for employees below the CEO and ExCo/Disclosed Executives. The EAG is chaired by the CEO and members include the CRO, CFO and GE T&C. It operates under the delegated authority of thePeople & Culture Commiee, considering Accountability questions under FAR and accountability in its broader sense, and is responsible for: • supporting the Board in monitoring the implementation and ongoing eectiveness of ANZ’s A&CF; • reviewing the most material risk, conduct and audit events for accountability and the application of consequences, whereappropriate; • providing guidance to the Divisions and considering initiatives across the Divisions to strengthen risk behaviours; • acknowledging material positive risk events and recognising risk role models, whose achievements are profiled across the organisation; and • approving the release or application of downward adjustment for deferred variable remuneration (noting that for the CEO and Disclosed Executives this is approved by the Board). The EAG has processes in place to ensure that we mitigate the risk of conflicts of interest in reviewing events and determining accountability and consequences. For example, when undertaking accountability reviews, a recommendation regarding the review leader and scope must be sent to the CRO (or in the case of an event involving Group Risk to the CEO), for review and approval to ensure the individual is capable of undertaking an impartial and unbiased review. ANZ Performance Assessment Framework Group Risk modifier adjusted Individual Risk outcome adjusted All DEs impacted – with higher impact for those assessed as having greater accountability Additional Board Governance regarding Markets & NFR Maers (incl. external reviews) Board discretion overlay with STVR adjustments for select individuals Adjustments applied based on a consequence lens, rather than a ‘pure’ performance lens 2025 LTVR Pre Grant Assessment Downward adjustment due to 2024 risk considerations All DEs impacted Future downward adjustment (if required) Further adjustment ifadditional information comes to light at a later date See Section 4.5 for downward adjustment options Fair and proportionate remuneration consequences 2024 STVR and 2025 LTVR outcomes Awarded STVR outcome of 52% of maximum for CEO and average of 60% of maximum for Disclosed Executives; 90% LTVR RR resulting in 95% 2025 LTVR overall 58 Australia and New Zealand Banking Group Limited 2024 Annual Report 58 Australia and New Zealand Banking Group Limited 2024 Annual Report ![]() #### 6.5 Material positive #### riskevents The EAG reviews material positive risk decisions and events – times when our proactive approach to identifying and mitigating risk have had a material positive outcome. Reviewing these examples provides an opportunity to acknowledge the importance of these events and share learnings across the enterprise. #### 6.6 Risk role models In 2024, 104 individuals were recognised by the EAG for role modelling outstanding risk behaviours through their eorts to identify, manage and mitigate the organisation’s risks and contribute to our strong risk culture. Recognition provided included a personalised e-mail from the CEO, local recognition events, and having their achievement profiled on our intranet and in internal newsleers. #### 6.7 Compliance with #### Prudential Standard #### CPS 511 Remuneration ANZ’s A&CF is an integral part of our enterprise approach to meeting the requirements of APRA’s Prudential Standard CPS 511 Remuneration. We introduced clawback provisions for the CEO and our Disclosed Executives eective 2022, in addition to existing downward adjustment tools such as in year adjustment, further deferral and malus. In 2024, we have continued to raise employee awareness with respect to accountability and consequences through explicit references to the A&CF (including remuneration consequences) in employee training and communications and performance and remuneration policy documents. In addition, as part of our annual performance and remuneration process, we have provided our People Leaders with guidance regarding appropriate (and in 1. Results reported are taken from the Q2 and/or Q4 employee engagement surveys, and Risk Culture Survey. some cases, mandatory) remuneration consequences for conduct and performance issues, including insights from the previous year’s consequences applied. These activities are part of our continued focus on consistency in application of remuneration consequence across ANZ globally. #### 6.8 Evolving the Accountability #### & Consequence Framework Our A&CF is designed to support our customer commitment that when things go wrong, we fix them and hold executives, (current and former where we can), to account where appropriate. We are also focused on ensuring that we learn from the cause of the event, mitigate the risk of future recurrences and continuously seek to strengthen our risk culture. We review the eectiveness of the A&CF every year and implement enhancements to further strengthen the A&CF based on regulatory and internal stakeholder input. #### 6.9 Speak up culture We continue to raise employee awareness of, and promote the various ways employees can speak up and raise issues and ideas for improvement including through initiatives such as: • targeted jurisdiction and business specific awareness sessions, designed to build trust in the process and program and promote speak up channels; • digital communications designed to build confidence and trust in the Whistleblower Program and process; and • the monitoring of responses in our employee engagement surveys. Key risk and speak up scores, including ‘My manager (the person I report to) demonstrates personal accountability for managing risk and sound risk behaviours (92%)‘, ‘I can raise issues and concerns without fear of reprisals’ (77%), ‘In my team, it feels safe to ask questions, make mistakes, highlight problems & take social risks (85%)’ and ‘When I speak up, my ideas, opinions and concerns are heard’ (81%) remained strong, in keeping with 2023, 2022 and 2021 results. 1 6.10 Application of #### consequences In 2024, there were 1,400 employee relations cases involving alleged breaches of our Code, with 488 resulting in a formal consequence or the employee leaving ANZ, down from 501 in 2023. Breaches ranged from compliance/procedural breaches (20.7%), through to general unacceptable behaviour (38.5%), email/ systems misuse (10.5%), aendance issues (17.4%), fraud/the (5.5%), conflict of interest (3.7%) and breaches of our Equal Opportunity, Bullying and Harassment Policy (3.7%). Outcomes following investigations of breaches this year included 88 terminations, 306 warnings and 94 employees leaving ANZ. In relation to the application of consequences to our senior leadership population (senior executives, executives and senior managers), 20 current and former employees (30 in 2023) had a consequence applied as a result of the application of our Code of Conduct Policy and/or findings of accountability for a relevant event. Consequences included warnings, impacts on performance and remuneration outcomes and dismissal. All employees and contractors across the enterprise are required to complete mandatory learning modules. Permanent employees who fail to complete their mandatory learning requirements within 30 days of the due date are (in the absence of genuinely exceptional circumstances) ineligible for any FR increase or variable remuneration award as part of our annual Performance and Remuneration Review. In 2024, the mandatory learning course compliance rate across the enterprise was 99.73%. 59 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 59 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() #### 7.1 NED Remuneration structure A review of 2024 NED fees was completed by the People & Culture Commiee in September 2023. Following that review of 2024 fees (as previously disclosed in the 2023 Remuneration Report), the People & Culture Commiee approved a 2% increase to the NED member fee (from $240,000 to $245,000) which has remained unchanged since 2016. The Board Chairman fee remains unchanged. Following review, the People & Culture Commiee also approved the alignment of the fee structure across all Commiees increasing each Commiee chair fee to $68,000, and each Commiee member fee to $34,000. This fee review considered increased complexity in the regulatory environment, uplis for ANZ’s broader employee population, and the external market. The fee structure is applicable to NEDs of ANZGHL and ANZBGL. Fees prior to the implementation of the Non-Operating Holding Company (NOHC) structure related to membership of the ANZBGL Board, and post implementation are viewed as a single fee covering both Boards (i.e., membership of ANZGHL and ANZBGL Boards/Commiees). Currently the fee structure applies irrespective of whether NEDs serve on one or more Boards. NEDs receive a fee for being a Director of the Board, and additional fees for either chairing, or being a member of a Board Commiee. The Chairman of the Board does not receive additional fees for serving on a Board Commiee. In seing Board and Commiee fees, the following are considered: general industry practice, ASX Corporate Governance Principles and Recommendations, the responsibilities and risks aached to the NED role, the time commitment expected of NEDs on Group and Company maers, and fees paid to NEDs of comparable companies. ANZ compares NED fees to a comparator group of Australian listed companies with a similar market capitalisation, with particular focus on the major financial services institutions. This is considered an appropriate group, given similarity in size and complexity, nature of work and time commitment by NEDs. To maintain NED independence and impartiality: • NED fees are not linked to the performance of the Group; and • NEDs are not eligible to participate in any of the Group’s variable remuneration arrangements. The current aggregate fee pool for NEDs of $4m was approved by shareholders at the 2012 AGM. The annual total of NEDs’ fees, including superannuation contributions, is within this agreed limit. This table shows the NED fee policy structure for 2024 compared to 2023. NED fee policy structure – 2024 and 2023 Financial year Chair fee Member fee Board 1,2 2024 $850,000 $245,000 2023 $850,000 $240,000 Audit Commiee 2024 $68,000 $34,000 2023 $65,000 $32,500 Risk Commiee 2024 $68,000 $34,000 2023 $65,000 $32,500 People & Culture Commiee (previously Human Resources Commiee) 2024 $68,000 $34,000 2023 $65,000 $32,500 Digital Business & Technology Commiee 2024 $68,000 $34,000 2023 $55,000 $27,500 Ethics, Environment, Social & Governance Commiee 2024 $68,000 $34,000 2023 $55,000 $27,500 1. Including superannuation. 2. The Chairman of the Board does not receive additional fees for serving on a Board Committee. The Chairman of the Board and NEDs do not receive a fee for serving on the Nomination and Board Operations Committee. 7. Non-Executive Director (NED) remuneration 7.1 NED Remuneration structure 7.2 2024 Statutory remuneration – NEDS 60 Australia and New Zealand Banking Group Limited 2024 Annual Report 60 Australia and New Zealand Banking Group Limited 2024 Annual Report ![]() NED shareholding guidelines We expect our NEDs to hold ANZ shares. NEDs are required: • to accumulate shares – over a five-year period from their appointment to the value of: – 100% of the NED member fee for Directors; – 100% of the Chairman fee for the Chairman; and • to maintain this shareholding while they are a Director of ANZ. Based on the ANZ share price as at 30 September 2024, all NEDs who have served five years met the holding guideline. #### 7.2 2024 Statutory remuneration – NEDS The following table outlines the statutory remuneration of NEDs 1 disclosed in accordance with Australian Accounting Standards. 1. In addition to the fees shown below the following NEDs were awarded fees relating to other ANZ entities: • John Cincotta awarded $35,743 in 2024 for his role as NED of Norfina Limited (Suncorp Bank). • Jane Halton awarded $60,984 in 2024 for her role as Chair of Norfina Limited (Suncorp Bank). • Christine O’Reilly awarded $35,743 in 2024 for her role as NED of Norfina Limited (Suncorp Bank). • Scott St John awarded NZD 324,342 in 2024 for his roles as Chair and NED of ANZ Bank New Zealand Limited. • Sir John Key awarded NZD 200,697 in 2024 (NZD 422,050 in 2023) for his role as Former Chair of ANZ Bank New Zealand Limited. 2024 Statutory remuneration – NEDS Short-term NED benefits Post- employment Financial year Fees 1 $ Non monetary benefits 2 $ Super contributions 1 $ Total remuneration 3 $ Current Non-Executive Directors P O’Sullivan 2024 821,968 - 28,032 850,000 2023 824,181 - 25,819 850,000 J Cincoa 4 2024 177,802 184 18,253 196,239 R Gibb 4 2024 206,291 184 18,253 224,728 J Halton 2024 358,281 - 28,032 386,313 2023 329,181 - 25,819 355,000 G Hodges 4 2024 284,968 184 28,032 313,184 2023 176,745 - 17,102 193,847 H Kramer 4 2024 328,577 184 28,032 356,793 2023 35,841 - 3,942 39,783 C O’Reilly 2024 362,484 - 28,032 390,516 2023 344,181 - 25,819 370,000 J Smith 2024 347,332 - 28,032 375,364 2023 298,889 - 25,819 324,708 S St John 4 2024 146,879 - 14,800 161,679 Former Non-Executive Directors I Atlas 4 2024 78,047 - 6,850 84,897 2023 339,181 - 25,819 365,000 J Key 4 2024 143,595 1,295 13,699 158,589 2023 301,681 - 25,819 327,500 J Macfarlane 4 2024 78,047 4,974 6,850 89,871 2023 336,443 - 25,819 362,262 Total of all Non-Executive Directors 2024 3,334,271 7,005 246,897 3,588,173 2023 2,986,323 - 201,777 3,188,100 1. Year-on-year differences in fees relate to changes to the NED fees and also to the superannuation Maximum Contribution Base. 2. Non monetary benefits generally consist of company-funded benefits (and the associated Fringe Benefits Tax) such as welcome gifts from the ANZ NZ Board and gifts provided upon retirement. 3. Long-term benefits and share-based payments do not apply for the NEDs. 4. Remuneration based on time as a NED in either 2023 (G Hodges and H Kramer) or 2024 (J Cincotta, R Gibb, S St John, I Atlas, J Key and J Macfarlane). 61 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 61 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() #### 8.1 The People & #### CultureCommiee 8.1.1 Role of the People & Culture Commiee The Board is ultimately responsible for and oversees ANZ Group’s Performance and Remuneration Framework (P&R Framework) and its eective application throughout the ANZ Group. The People & Culture Commiee’s role is to assist the Board in its oversight of the eective operation of P&R Framework and other T&C maers. It has been delegated authority to act as the remuneration commiee for ANZBGL. During the year the People & Culture Commiee met on six occasions and reviewed and approved, or made recommendations to the Board on maersincluding: • remuneration for the CEO and other key executives (broader than those disclosed in the Remuneration Report) in accordance with ANZ’s Board level P&R Policies, and fees for the NEDs; • maers related to P&R Framework compliance with APRA’s Prudential Standard CPS 511 Remuneration, and updates on Treasury’s Financial Accountability Regime (FAR); • the ANZ Group Scorecard (annual objectives seing and assessment) and annual variable remuneration spend; • performance and reward outcomes for key senior executives, including the consideration of material events that have either occurred or came to light in the year; • the release, further deferral or application of malus of deferred remuneration or clawback; • key senior executive appointments andterminations; • the review of ANZ’s Board level P&R Policies, and the Accountability & Consequence Framework (A&CF); • building capabilities required to deliveron our strategy; • succession plans for key senior executives; and • culture, diversity and inclusion, employee engagement, and how wework. 8.1.2 Link between remunerationand risk The People & Culture Commiee has a strong focus on the relationship between business performance, risk management and remuneration, aligned with our business strategy. The chairs of the Risk and Audit Commiees and the full Board (ANZGHL and ANZBGL) are in aendance for specific People & Culture Commiee meetings. A joint meeting of the People & Culture, Risk and Audit Commiees was held to review: • material risk, conduct and audit events that either occurred or came to light in 2024; • 2024 performance and variable remuneration recommendations at boththe Group, CEO and Disclosed Executive level. To further reflect the importance of the link between remuneration and risk: • the Board had three NEDs (in addition to the Chairman) in 2024 who served on both the People & Culture Commiee and the Risk Commiee; • the People & Culture Commiee has free and unfeered access to risk and financial control personnel (the CRO andCFO aend People & Culture Commiee meetings for specific agenda items); • the CRO (together with GE T&C and GGM IA) provides an independent report to the People & Culture Commiee on the most material risk, conduct and audit events (as relevant) to help inform considerations of performance and remuneration, and accountability and consequences at the Group, Divisional and individual level; • the CRO also provides an independent report to assist the Board in their assessment of performance and remuneration outcomes for the CEO and Disclosed Executives; • the chairs of the Risk and Audit Commiees are asked to provide input to ensure appropriate consideration of all relevant risk and internal audit issues; • the ANZ Group Scorecard and Divisional Scorecards include Risk as a key element acting as a modifier, and it forms an integral part of each framework’s assessment and directly impacts the overall outcomes; and • the LTVR restricted rights pre grant and pre vest assessments undertaken by the Board are primarily based on non-financial risk outcomes. 8.1.3 Conflict of interest To help mitigate potential conflicts of interest: • management are not in aendance when their own performance or remuneration is being discussed by the People & Culture Commiee or Board; • the CEO’s STVR is funded and determined separately from the ANZIP variable remuneration pool; • the CRO’s remuneration arrangements dier to other Disclosed Executives to preserve the independence of the role; • the EAG also has processes in place to help mitigate conflicts of interest as outlined in Section 6; and • the People & Culture Commiee seeks input from a number of sources to inform their consideration of performance and remuneration outcomes for the CEO and Disclosed Executives including: – independent reports from Risk, Finance, Talent and Culture, and Internal Audit; – material risk, conduct and audit event data provided by the CRO; – input from both the Audit Commiee and the Risk Commiee of the Board. More details about the role of the People & Culture Commiee, including its Charter, can be found on our website. Go to anz.com > Our company > Strong governance framework > ANZ People & Culture Commiee Charter. 8. Remuneration governance 8.1 The People & CultureCommiee 8.2 Internal governance 62 Australia and New Zealand Banking Group Limited 2024 Annual Report 62 Australia and New Zealand Banking Group Limited 2024 Annual Report ![]() 8.1.4 External advisors provided information but not recommendations The People & Culture Commiee can engage independent external advisors as needed. Throughout the year, the People & Culture Commiee and management received information from the following external advisors: Ashurst, Deloie, EY, Guerdon Associates, PayIQ Executive Pay and PricewaterhouseCoopers. This information related to market data, market practices, analysis and modelling, legislative requirements and the interpretation of governance and regulatory requirements. During the year, ANZ did not receive any remuneration recommendations from external advisors about the remuneration ofKMP. ANZ employs in-house remuneration professionals who provide recommendations to the People & Culture Commiee and the Board. The Board made its decisions independently, using the information provided and with careful regard to ANZ’s key strategic priorities, purpose and values, risk appetite, and the ANZ Group P&R Framework, ANZ’s Board level P&R Policies and ANZ’s Reward Principles. #### 8.2 Internal governance 8.2.1 Hedging prohibition All deferred equity must remain at risk until it has fully vested. Accordingly, executives and their associated persons must not enter into any schemes that specifically protect the unvested value of equity allocated. If they do so, then they would forfeit the relevant equity. 8.2.2 CEO and Disclosed Executives’ shareholding guidelines We expect the CEO and each Disclosed Executive to, over a five-year period: • accumulate ANZ shares to the value of 200% of their FR; and • maintain this shareholding level while they are an executive of ANZ. Executives are permied to sell ANZ securities to meet taxation obligations on employee equity even if below the 200% guideline. However, tax obligations for the purpose of these guidelines is limited to that arising from the initial taxing point event (i.e., when the deferred shares vest or rights are exercised). Shareholdings include all vested and unvested equity (excluding performance rights). Based on equity holdings as at 30 September 2024, the CEO and all Disclosed Executives meet or, if less than five years’ tenure, are on track to meet their minimum shareholding guidelines requirements. 8.2.3 CEO and Disclosed Executives’ contract terms and equity treatment The details of the contract terms and the equity treatment on termination (in accordance with the Conditions of Grant) relating to the CEO and Disclosed Executives are below. Although they are similar, they vary in some cases to suit dierent circumstances. Type of contract Permanent ongoing employment contract. Notice on resignation • 12 months by CEO; • 6 months by Disclosed Executives. 1 Notice on termination by ANZ 2 • 12 months by ANZ for CEO and Disclosed Executives. 3 However, ANZ may immediately terminate an individual’s employment at any time in the case of serious misconduct. In that case, the individual will be entitled only to payment of FR up to the date of their termination and their statutory entitlements. How unvested equity is treated on leaving ANZ Executives who resign or are terminated will forfeit all their unvested deferred equity – unless the Board determines otherwise. If an executive is terminated due to redundancy or they are classified as a ‘good leaver’, unless the Board determines otherwise, then: • their STVR (deferred shares/share rights) remain on foot and are released at the original vesting date; • their LTVR (restricted rights/performance rights) (for grants awarded from 31 December 2020) remain on foot and are released at the original vesting date (to the extent that the performance hurdles are met); and • their performance rights 4 (for grants awarded pre 31 December 2020) are pro-rated for service to the full notice termination date and released at the original vesting date (to the extent that the performance hurdles are met). On an executive’s death or total and permanent disablement, their deferred equity vests. Unvested equity remains subject to malus post termination. Change of control (applies to the CEO only) If a change of control or other similar event occurs, then we will test the performance conditions applying to the CEO’s LTVR (restricted rights/performance rights). They will vest to the extent that the performance conditions are satisfied. 1. 3 months by the former Acting GE T&C. 2. For M Carnegie, E Clements, K Corbally, F Faruqui, G Florian, C Morgan, A Strong, M Whelan and R Howell, their contracts state that in particular circumstances they may be eligible for a retrenchment benefit in accordance with the relevant ANZ policy, as varied from time to time. For A Watson, notice on retrenchment is 6 weeks and compensation on retrenchment is calculated on a scale up to a maximum of 79 weeks after 25 years’ service. 3. 6 months by ANZ for the former Acting GE T&C. 4. Or deferred share rights granted to the CRO instead of performance rights. 63 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 63 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() #### 9.1 LTVR Remuneration detail 1 The award of restricted rights ensures that LTVR provides material weight to non-financial measures (as required under APRA’s Prudential Standard CPS 511 Remuneration), as well as supporting long-term alignment with shareholders. Having a risk-based focus reflects the intent of the Prudential Standard CPS 511 Remuneration in ensuring remuneration arrangements appropriately incentivise individuals to prudently manage risks. The performance conditions are designed to ensure there is focus on both material risk events and building a strong risk culture over the longer term. The following table details design features common to both LTVR restricted rights and performance rights. Below details the LTVR approach that applied to the 2024 LTVR award granted in November/December 2023. LTVR element Detail Description Restricted rights and performance rights provide a right to acquire one ordinary ANZ share at nil cost – as long as applicable time and performance conditions are met. Their future value may range from zero to an indeterminate value. The value depends on performance against the applicable performance condition andon the share price at the time of exercise. Performance period Both restricted rights and performance rights have a four-year performance period commencing from 1October and ending four years later on 30 September (e.g., 1 October 2023 to 30 September 2027 for the2024 grant), noting that LTVR is awarded at the start of the financial year (rather than the end). A four-year performance period provides sucient time for longer term performance to be reflected. Deferral periods The deferral period is the sum of the four-year performance period and the applicable holding period. The holding period commences the day aer the end of the four-year performance period (e.g., 1 October 2027 in the case of the 2024 LTVR award), and finishes on the 4th, 5th or 6th anniversary of grants. Exercise period Rights can only be exercised at the end of the relevant deferral period (4, 5 or 6 years) when the rights vest andbecome exercisable. There is a two-year exercise period which commences at the end of the relevant deferral period for restricted rights and performance rights. Expensing ANZ engages PricewaterhouseCoopers to independently determine the fair value of restricted rights and performance rights, which is only used for expensing for accounting purposes. They consider factors including: the market performance conditions, share price volatility, life of the instrument, dividend yield, and share price at grant date. Dividends 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 equivalent payments accrue over the full deferral period for restricted rights, and only during the holding period for performance rights. Allocation basis The value the Board uses to determine the number of restricted rights and performance rights to be allocated to the CEO and Disclosed Executives is the face value of ANZGHL shares traded on the ASX in the five trading days leading up to and including 1 October (beginning of the financial year and LTVR performance period). LTVR is awarded around the start of the financial year in late November for Disclosed Executives and December for the CEO (subject to shareholder approval). Satisfying vesting On vesting, the Board may determine to sele the relevant restricted rights and/or performance rights with acash equivalent payment, rather than with shares. 1. Excluding former Acting GE T&C. 9. Other remuneration information 9.1 LTVR Remuneration detail 9.2 2024 Statutory remuneration – CEO and Disclosed Executives 9.3 Equity holdings 9.4 Loans 9.5 Other transactions 64 Australia and New Zealand Banking Group Limited 2024 Annual Report 64 Australia and New Zealand Banking Group Limited 2024 Annual Report ![]() 9.1.1 2024 LTVR restricted rights further details – CEO and Disclosed Executives 1 LTVR element Performance condition detail Restricted rights pre grant and pre vest assessments Pre grant assessment purpose: Determines whether any reduction should be made to restricted rights award value and is primarily based on outcomes in the prior financial year. Pre vest assessment purpose: Determines whether the restricted rights amount awarded should vest in full and is based on outcomes over the four-year performance period. The pre grant and pre vest assessments also take into consideration any adjustments already applied for the same event/outcomes in either the current or prior years (i.e., adjustments to STVR and LTVR, malus and clawback), to ensure the overall impact is fair and proportionate to the severity of the outcome. Therefore, given other remuneration adjustments are likely to be considered first, and as the award of restricted rights is future focused, it is anticipated that restricted rights will be allocated at full value in most years – unless the outcome of the following three assessment steps determines otherwise. Step 1 Assess Prudential soundness Step 2 Assess risk measures Step 3 Apply Board discretion • Nil award if ANZ does not meet capital ratio and liquidity prudential minimums. • Consideration of any Material Risk Outcomes from executive actions or inactions which are expected to/or have resulted in significant impacts. • Consideration of any significant adverse change in APRA’s Active Supervision level. • Consideration of Risk Culture (additional measure for pre vest) that examines whether or not ANZ has maintained (or made progress towards) a sound risk culture, considering both executive actions or inactions. • Board to determine whether any reduction should be made to LTVR restricted rights outcome based on consideration of a range of factors, including: – the outcomes from steps 1 and 2; – the impact, if any, of the issue/s on ANZ’s reputation/standing in the market; – whether the issue was specific to ANZ, the banking industry or the broader market; – any impacts already applied (e.g., regarding downward adjustment mechanisms, pre grant assessment impact to LTVR restricted rights); – whether any impact should be made on an individual or collective basis. The assessments are not intended to be formulaic given the circumstances requiring the application of Board discretion will typically be dierent or unique, however a Board decision making framework is in place to guide the Board in applying discretion. Material risk outcomes process The consideration of material risk outcomes is a key process that forms part of our broader Accountability and Consequence Framework (A&CF) (Section 6), and is a comprehensive boom-up process designed to ensure that all relevant events are surfaced and considered appropriately. Key steps include: • Risk, conduct and audit events are reported in ANZ’s Compliance & Operational Risk System. • Divisional Accountability Groups review serious risk, conduct and audit events, and provide recommendations regarding accountability and consequences, where appropriate. • Enterprise Accountability Group (EAG) reviews recommendations of the Divisional Accountability Groups and make final determination (with some exceptions where local Board approval is required or for material risk takers and other non-administrative direct reports to the CEO, where Board approval is required). • People & Culture Commiee reviews the most serious risk, conduct and audit events (as part of independent report from CRO) and determines impacts at the Group, Division and individual level for the CEO and ExCo. 1. Excluding former Acting GE T&C. 65 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 65 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 9.1.2 2024 LTVR performance rights further details – CEO and Disclosed Executives excluding the CRO 1 LTVR element Performance condition detail Performance rights hurdles The performance rights have TSR performance hurdles reflecting the importance of focusing on achieving longer term strategic objectives and aligning executives’ and shareholders’ interests. There are two TSR performance hurdles for the 2024 grants of performance rights: • 75% will be measured against a relative TSR hurdle. • 25% will be measured against an absolute TSR hurdle. TSR represents the change in value of a share plus the value of reinvested dividends paid. We regard it as the most appropriate long-term measure – it focuses on the delivery of shareholder value and is a well understood and tested mechanism to measure performance. The combination of relative and absolute TSR hurdles provides balance to the plan by: • Relative: rewarding executives for performance that exceeds that of comparator companies; and • Absolute: ensuring there is a continued focus on providing positive growth – even when the market isdeclining. The two hurdles measure separate aspects of performance: • the relative TSR hurdle measures our TSR compared to that of the Select Financial Services (SFS) comparator group, made up of core local and global competitors. This comparator group is chosen to broadly reflect the geographies and business segments in which ANZ competes for revenue; and • the absolute Compound Annual Growth Rate (CAGR) TSR hurdle provides executives with a more direct line of sight to the level of shareholder return to be achieved. It also provides a tighter correlation between the executives’ rewards and the shareholders’ financial outcomes. We will measure ANZ’s TSR against each hurdle at the end of the four-year performance period to determine whether any performance rights become exercisable. We measure relative and absolute TSR hurdles independently from the other – for example one may vest fully or partially but the other may not vest. Relative TSR hurdle for performance rights The relative TSR hurdle is an external hurdle that measures our TSR against that of the SFS comparator group over four years. As previously disclosed in the 2023 Remuneration Report, in July 2023 for LTVR awards of performance rights from financial year 2024 onwards, the Board approved for DBS Bank Limited to be removed from the comparator group (noting that this change does not apply to prior awards currently on foot). This change reflects the need to beer balance the weighting of international peers in our comparator group to more appropriately reflect the change in capital allocated to Asia compared to when international comparators were originally included in 2015 (as part of the super regional strategy at that time). In July 2023, the Board approved the removal of Suncorp Group Limited from the comparator group, post the Suncorp Bank acquisition. This change applies to both prior awards currently on foot and future LTVR awards of performance rights (i.e., from financial year 2025). When considering an appropriate cohort of peers for benchmarking TSR performance, the Board take into consideration organisations with a similar scope of activities, common geographical focus, broadly comparable risk compliance and regulatory profiles, and relative stability and transparency across market cycles. The SFS comparator group for the 2024 LTVR performance rights is made up of: Bank of Queensland Limited; Bendigo and Adelaide Bank Limited; Commonwealth Bank of Australia Limited; Macquarie Group Limited; National Australia Bank Limited; Standard Chartered PLC; and Westpac Banking Corporation. If the TSR of the company compared to the TSR of the constituents of the comparator group: The percentage of performance rights which will vest is: Does not reach the 50 th percentile 0% Reaches or exceeds the 50 th percentile 50%, plus 2% for every one percentile increase above the 50 th percentile Reaches or exceeds the 75 th percentile 100% 1. Excluding former Acting GE T&C. 66 Australia and New Zealand Banking Group Limited 2024 Annual Report 66 Australia and New Zealand Banking Group Limited 2024 Annual Report ![]() LTVR element Performance condition detail Absolute TSR hurdle for performance rights The absolute CAGR TSR hurdle is an internal hurdle focused on ANZ achieving or exceeding a threshold level of growth that is set by the Board at the start of the performance period. The Board reviews and approves the absolute CAGR TSR targets for each performance rights award. When determining the targets, the Board references ANZ’s assessed Cost of Capital (CoC). As previously disclosed in the 2023 Remuneration Report, in October 2023 the Board approved an update to ANZ’s absolute CAGR TSR model for LTVR awards of performance rights from financial year 2024 onwards, to reflect a dynamic (rather than static) target for CoC (noting that this change does not apply to prior awards currently on foot). The TSR hurdle is now based on the time weighted CoC over the four-year performance period. Therefore, the CAGR TSR target will be adjusted on a time weighted basis unless the Board applies discretion not to adjust. Any CoC changes approved by the Board throughout the performance period are prospective only (i.e., reflect current market factors) and will form part of the dynamic CAGR TSR target calculation. This approach further strengthens executive and shareholder alignment as the target is more responsive to future changes in both the interest rate cycle and ANZ’s risk profile. The level of performance required for each level of vesting, and the percentage of performance rights that vest at each level of performance, is based on the time weighted CoC over the four-year performance period. The Board will review and approve any changes to the CoC on a quarterly basis throughout the performance period, based on the output from the Capital Asset Pricing Model (CAPM) methodology (which takes into consideration the risk-free bond rate, the market risk premium and the beta – i.e., the volatility of ANZ’s historical share price relative to the market). The Board will also approve the level of vesting (if any) at the end of the performance period based on the time weighted CoC. The Board retains discretion to adjust the absolute CAGR TSR hurdle in exceptional circumstances to ensure that executives are neither advantaged nor disadvantaged by maers outside management’s control that materially aect achievement of the absolute CAGR TSR performance condition. If the absolute CAGR TSR of the company: The percentage of performance rights which will vest is: Does not reach the threshold 1 0% Reaches the threshold 50% Exceeds the threshold but does not reach the full vesting level (i.e., 150% of threshold) Progressive pro-rata vesting between 50% and 100% (on a straight line basis) Reaches or exceeds 150% of threshold 100% Calculating TSR performance When calculating performance against TSR, we: • reduce the impact of share price volatility – by using an averaging calculation over a 90-trading day period for start and end values; • ensure an independent measurement – by engaging the services of an external organisation, to calculate ANZ’s performance against both the absolute and relative TSR hurdles; and • test the performance against the relevant hurdle once only at the end of the four-year performance period – the rights lapse if the performance hurdle is not met – there is no retesting. 1. Based on the CoC at the start of the performance period, the CAGR TSR threshold was 9.75% and the full vesting level was based on a CAGR TSR of 14.63%; however this may be subject to change based on the time weighted CoC over the performance period unless the Board exercises discretion to set it otherwise. 67 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 67 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() #### 9.2 2024 Statutory remuneration – CEO and Disclosed Executives The following table outlines the statutory remuneration disclosed in accordance with Australian Accounting Standards. While it shows the FR awarded (cash and superannuation contributions) and also the cash component of the 2024 variable remuneration award, it does not show the actual variable remuneration awarded or received in 2024 (Sections 5.1.2, 5.2.1, 5.3 and 5.4), but instead shows the amortised accounting value for this financial year of deferred remuneration (including prior year awards). 2024 Statutory remuneration – CEO and Disclosed Executives Short–term employee benefits Post–employment Financial year Cash salary 1 $ Non monetary benefits 2 $ Total cash incentive 3 $ Other cash 4 $ Super contributions 5 $ CEO and Current Disclosed Executives S Ellio 2024 2,471,968 10,394 650,000 - 28,032 2023 2,474,181 15,676 1,160,000 - 25,819 M Carnegie 9 2024 1,271,468 30,510 432,500 - 28,532 2023 1,224,181 77,341 550,000 - 26,319 E Clements 10 2024 755,468 13,042 235,200 - 28,532 K Corbally 9 2024 1,271,968 10,394 312,000 - 28,032 2023 1,224,181 10,176 532,500 - 25,819 F Faruqui 9 2024 1,246,968 15,990 442,500 - 28,032 2023 1,224,181 11,423 600,000 - 25,819 G Florian 9 2024 1,234,468 21,358 432,500 - 28,032 2023 1,216,181 23,179 497,500 - 25,819 C Morgan 4,9,10 2024 1,106,468 33,024 325,000 - 28,532 2023 608,220 15,707 250,000 407,000 18,780 A Strong 9,10 2024 821,968 - 290,000 - 28,032 2023 670,504 - 315,100 - 19,496 A Watson 5,8,9,11 2024 1,043,345 10,870 398,830 - 64,667 2023 1,062,823 21,431 472,570 - 60,557 M Whelan 9 2024 1,471,968 10,394 297,500 - 28,032 2023 1,434,181 10,176 730,000 - 25,819 Former Disclosed Executives R Howell 10 2024 7,477 – – – 6,850 2023 224,942 – 180,000 – 6,850 1. Cash salary includes any adjustments required to reflect the use of ANZ’s Lifestyle Leave Policy for the period in the KMP role. 2. Non monetary benefits generally consist of company-funded benefits (and the associated Fringe Benefits Tax) such as car parking, taxation services and costs met by the Company in relation to relocation/accommodation. 3. The total cash incentive relates to the cash component of STVR only. The relevant amortisation of the STVR deferred components is included in share-based payments and has been amortised over the vesting period. The total STVR was approved by the ANZBGL and ANZGHL Boards in October 2024, and in addition for A Watson by the ANZ NZ Board in October 2024. 100% of the cash component of the STVR awarded for the 2023 and 2024 years vested to the executive in the applicable financial year. 4. Other cash and other equity allocations (C Morgan) relate to the employment arrangements of deferred variable remuneration forfeited and bonus opportunity forgone as a result of joining ANZ. 5. For Australian based executives, the 2023 and 2024 superannuation contributions reflect the Superannuation Guarantee Contribution based on the Maximum Contribution Base. A Watson participates in KiwiSaver where ANZ provides an employer superannuation contribution matching member contributions up to 4% of total gross pay. KiwiSaver employer superannuation contributions are also contributed on top of cash STVR at the time of payment. 6. For Australian based executives, long service leave accrued takes into consideration the impact of changes to the Superannuation Guarantee percentage. Year-on-year fluctuations in long service leave accrued relate to the impact of historical fixed remuneration increases on the accrual as calculated at the end of each financial year. 68 Australia and New Zealand Banking Group Limited 2024 Annual Report 68 Australia and New Zealand Banking Group Limited 2024 Annual Report ![]() Long–term employee benefits Share–based payments 7 Total amortisation value of Long service leave accrued during the year 6 $ Variable remuneration Other equity allocations 4,8 Deferred shares $ Deferred share rights $ Restricted rights $ Performance rights $ Deferred shares $ Termination benefits $ Total remuneration $ 34,899 983,953 - 470,353 1,050,043 - - 5,699,642 35,112 1,061,506 - 212,024 1,202,190 - - 6,186,508 24,194 537,168 - 278,624 318,478 - - 2,921,474 22,858 548,990 - 132,871 298,501 - - 2,881,061 62,803 258,379 - 74,331 41,931 - - 1,469,686 28,812 504,806 184,609 412,784 - - - 2,753,405 27,518 568,319 265,999 196,849 - - - 2,851,361 19,593 587,723 11,970 276,254 339,842 - - 2,968,872 19,332 600,306 56,608 132,871 364,031 - - 3,034,571 19,520 519,518 - 262,636 314,818 - - 2,832,850 30,978 531,235 - 122,240 270,977 - - 2,718,109 17,191 248,970 - 193,884 109,398 238,340 - 2,300,807 5,367 67,909 - 1,414 798 29,899 - 1,405,094 33,855 382,072 - 173,812 94,524 - - 1,824,263 18,550 354,547 - 73,347 38,600 - - 1,490,144 7,560 494,722 - 244,918 294,280 - - 2,559,192 6,612 528,328 - 117,866 222,922 46 - 2,493,155 31,775 589,980 - 323,689 378,985 - - 3,132,323 36,172 700,447 - 155,192 393,646 - - 3,485,633 237 2,831 – – – – – 17,395 9,32162,538––– – – 483,651 7. As required by AASB 2 Share-based payments, the amortisation value includes a proportion of the fair value (taking into account market-related vesting conditions) of all equity that had not yet fully vested as at the commencement of the financial year. The fair value is determined at grant date and is allocated on a straight-line basis over the relevant vesting period. The amount included as remuneration neither relates to, nor indicates, the benefit (if any) that the executive may ultimately realise if the equity becomes exercisable. No terms of share-based payments have been altered or modified during the financial year. There were no cash settled share-based payments or any other form of share-based payment compensation during the financial year for the CEO or Disclosed Executives. 8. Other equity allocations (A Watson) relate to shares received in relation to the historical Employee Share Offer which provided a grant of ANZ shares in each financial year to eligible employees subject to Board approval. 9. 2024 fixed remuneration reflects increases applied from 1 October 2023 to maintain or improve market positioning (M Carnegie, K Corbally, F Faruqui, G Florian, C Morgan, A Strong, A Watson, M Whelan). 10. Remuneration based on time as a Disclosed Executive in either 2023 (C Morgan, A Strong, R Howell) or 2024 (E Clements, R Howell). 11. Paid in NZD and converted to AUD. 69 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 69 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() Type of equity Number granted 1 Equity fair value (for 2024 grants only) $ Grant date First date exercisable Date of expiry Vested Lapsed/ Forfeited Exercised/Sold Vested and exercis- able as at 30 Sep 2024 3 Unexer- cisable as at 30 Sep 2024 4 Name Number % Value 2 $ Number % Value 2 $ Number % Value 2 $ CEO and Current Disclosed Executives S Ellio Deferred shares 3,001 22-Nov-19 22-Nov-23 - 3,001 100 72,966 - - - (3,001) 100 72,966 - Deferred shares 5,420 07-Dec-20 22-Nov-23 - 5,420 100 131,781 - - - (5,420) 100 131,781 - - Deferred shares 10,830 22-Nov-21 22-Nov-23 - 10,830 100 263,318 - - - (10,830) 100 263,318 - - Deferred shares 20,156 01-Oct-22 22-Nov-23 - 20,156 100 490,069 - - - (20,156) 100 490,069 - - Deferred shares 19,740 25.66 01-Oct-23 22-Nov-24 - - - - - - - - - - - 19,740 Deferred shares 19,739 25.66 01-Oct-23 22-Nov-25 - - - - - - - - - - - 19,739 Deferred shares 3,158 25.66 01-Oct-23 22-Nov-26 - - - - - - - - - - - 3,158 Deferred shares 3,158 25.66 01-Oct-23 22-Nov-27 - - - - - - - - - - - 3,158 Deferred shares 3,158 25.66 01-Oct-23 22-Nov-28 - - - - - - - - - - - 3,158 Restricted rights 21,984 20.08 21-Dec-23 21-Dec-27 21-Dec-29 - - - - - - - - - - 21,984 Restricted rights 21,984 18.85 21-Dec-23 21-Dec-28 21-Dec-30 - - - - - - - - - - 21,984 Restricted rights 22,651 17.70 21-Dec-23 21-Dec-29 21-Dec-31 - - - - - - - - - - 22,651 Performance rights 126,050 17-Dec-19 17-Dec-23 17-Dec-25 - - - (126,050) 100 (3,223,073) - - - - - Performance rights 42,016 17-Dec-19 17-Dec-23 17-Dec-25 - - - (42,016) 100 (1,074,341) - - - - - Performance rights 16,488 12.54 21-Dec-23 21-Dec-27 21-Dec-29 - - - - - - - - - - 16,488 Performance rights 5,496 7.35 21-Dec-23 21-Dec-27 21-Dec-29 - - - - - - - - - - 5,496 Performance rights 16,488 11.33 21-Dec-23 21-Dec-28 21-Dec-30 - - - - - - - - - - 16,488 Performance rights 5,496 7.26 21-Dec-23 21-Dec-28 21-Dec-30 - - - - - - - - - - 5,496 Performance rights 16,988 10.08 21-Dec-23 21-Dec-29 21-Dec-31 - - - - - - - - - - 16,988 Performance rights 5,662 7.15 21-Dec-23 21-Dec-29 21-Dec-31 - - - - - - - - - - 5 ,662 M Carnegie Deferred shares 36 20-Aug-16 01-Jun-17 - - - - - - - (36) 100 1,038 - - Deferred shares 3,584 20-Aug-16 20-Aug-17 - - - - - - - (3,584) 100 103,364 - - Deferred shares 1,327 20-Aug-16 21-Nov-17 - - - - - - - (1,327) 100 38,271 - - Deferred shares 1,327 20-Aug-16 27-Feb-18 - - - - - - - (1,327) 100 38,271 - - Deferred shares 1,327 20-Aug-16 01-Jun-18 - - - - - - - (1,327) 100 38,271 - - Deferred shares 1,182 22-Nov-16 22-Nov-19 - - - - - - - (1,182) 100 34,089 - - Deferred shares 1,182 22-Nov-16 22-Nov-20 - - - - - - - (1,182) 100 34,089 - - Deferred shares 4,785 22-Nov-17 22-Nov-18 - - - - - - - (4,785) 100 138,001 - - Deferred shares 4,785 22-Nov-17 22-Nov-19 - - - - - - - (4,785) 100 138,001 - - Deferred shares 4,785 22-Nov-17 22-Nov-20 - - - - - - - (4,785) 100 138,001 - - Deferred shares 4,785 22-Nov-17 22-Nov-21 - - - - - - - (4,785) 100 142,975 - - Deferred shares 5,205 22-Nov-18 22-Nov-19 - - - - - - - (5,205) 100 156,052 - - Deferred shares 5,202 22-Nov-18 22-Nov-20 - - - - - - - (5,202) 100 155,962 - - Deferred shares 5,202 22-Nov-18 22-Nov-21 - - - - - - - (5,202) 100 155,962 - - Deferred shares 5,202 22-Nov-18 22-Nov-22 - - - - - - - (5,202) 100 155,962 - - #### 9.3 Equity holdings For the equity granted to the CEO and Disclosed Executives in November/December 2023, all deferred shares were purchased on the market. For deferred share rights, which vested to Disclosed Executives in November 2023, where the rights were not able to be satisfied through the reallocation of previously forfeited shares they were satisfied through the on market purchase of shares. 9.3.1 CEO and Disclosed Executives’ equity granted, vested, exercised/sold and lapsed/forfeited The table below sets out details of deferred shares and rights that we granted to the CEO and Disclosed Executives: • during the 2024 year, relating to 2023 Performance and Remuneration Review outcomes; or • in prior years and that then vested, were exercised/sold or which lapsed/were forfeited during the 2024 year. Equity granted, vested, exercised/sold and lapsed/forfeited – CEO and Disclosed Executives 70 Australia and New Zealand Banking Group Limited 2024 Annual Report 70 Australia and New Zealand Banking Group Limited 2024 Annual Report ![]() Type of equity Number granted 1 Equity fair value (for 2024 grants only) $ Grant date First date exercisable Date of expiry Vested Lapsed/ Forfeited Exercised/Sold Vested and exercis- able as at 30 Sep 2024 3 Unexer- cisable as at 30 Sep 2024 4 Name Number % Value 2 $ Number % Value 2 $ Number % Value 2 $ CEO and Current Disclosed Executives M Carnegie Deferred shares 7,924 22-Nov-19 22-Nov-20 - - - - - - - (7,924) 100 234,926 - - Deferred shares 5,942 22-Nov-19 22-Nov-21 - - - - - - - (5,942) 100 176,131 - - Deferred shares 3,961 22-Nov-19 22-Nov-22 - - - - - - - (3,961) 100 117,411 - Deferred shares 1,980 22-Nov-19 22-Nov-23 - 1,980 100 48,141 - - - - - - 1,980 - Deferred shares 7,099 07-Dec-20 22-Nov-21 - - - - - - - (7,099) 100 210,426 - - Deferred shares 5,323 07-Dec-20 22-Nov-22 - - - - - - - (5,207) 98 154,344 116 - Deferred shares 3,549 07-Dec-20 22-Nov-23 - 3,549 100 86,290 - - - - - - 3,549 - Deferred shares 6,165 22-Nov-21 22-Nov-23 - 6,165 100 149,895 - - - - - - 6,165 - Deferred shares 9,970 01-Oct-22 22-Nov-23 - 9,970 100 242,409 - - - - - - 9,970 - Deferred shares 10,857 25.66 01-Oct-23 22-Nov-24 - - - - - - - - - - - 10,857 Deferred shares 10,856 25.66 01-Oct-23 22-Nov-25 - - - - - - - - - - - 10,856 Restricted rights 17,321 18.92 22-Nov-23 22-Nov-27 22-Nov-29 - - - - - - - - - - 17,321 Restricted rights 17,321 17.77 22-Nov-23 22-Nov-28 22-Nov-30 - - - - - - - - - - 17,321 Performance rights 30,612 22-Nov-19 22-Nov-23 22-Nov-25 - - - (30,612) 100 (744,294) - - - - - Performance rights 10,204 22-Nov-19 22-Nov-23 22-Nov-25 - - - (10,204) 100 (248,098) - - - - - Performance rights 12,991 11.94 22-Nov-23 22-Nov-27 22-Nov-29 - - - - - - - - - - 12,991 Performance rights 4,330 7.37 22-Nov-23 22-Nov-27 22-Nov-29 - - - - - - - - - - 4,330 Performance rights 12,991 10.74 22-Nov-23 22-Nov-28 22-Nov-30 - - - - - - - - - - 12,991 Performance rights 4,330 7.26 22-Nov-23 22-Nov-28 22-Nov-30 - - - - - - - - - - 4,330 E Clements 5 Deferred shares 2,751 07-Dec-20 22-Nov-23 - 2,751 100 66,887 - - - - - - 2 ,751 - Deferred shares 2,285 22-Nov-21 22-Nov-23 - 2,285 100 55,557 - - - - - - 2,285 - Deferred shares 3,033 22-Nov-22 22-Nov-23 - 3,033 100 73,744 - - - - - - 3,033 - Deferred shares 4,102 24.31 22-Nov-23 22-Nov-24 - - - - - - - - - - - 4,102 Deferred shares 4,102 24.31 22-Nov-23 22-Nov-25 - - - - - - - - - - - 4,102 Deferred shares 4,102 24.31 22-Nov-23 22-Nov-26 - - - - - - - - - - - 4,102 Restricted rights 10,659 18.92 22-Nov-23 22-Nov-27 22-Nov-29 - - - - - - - - - - 10,659 Restricted rights 10,659 17.77 22-Nov-23 22-Nov-28 22-Nov-30 - - - - - - - - - - 10,659 Performance rights 7,994 11.94 22-Nov-23 22-Nov-27 22-Nov-29 - - - - - - - - - - 7,994 Performance rights 2,664 7.37 22-Nov-23 22-Nov-27 22-Nov-29 - - - - - - - - - - 2,664 Performance rights 7,994 10.74 22-Nov-23 22-Nov-28 22-Nov-30 - - - - - - - - - - 7,994 Performance rights 2,664 7.26 22-Nov-23 22-Nov-28 22-Nov-30 - - - - - - - - - - 2,664 K Corbally Deferred shares 3,829 22-Nov-19 22-Nov-23 - 3,829 100 93,098 - - - (3,829) 100 93,225 - - Deferred shares 3,720 07-Dec-20 22-Nov-23 - 3,720 100 90,447 - - - (3,720) 100 90,572 - - Deferred shares 6,647 22-Nov-21 22-Nov-23 - 6,647 100 161,614 - - - (6,647) 100 161,836 - - Deferred shares 9,590 01-Oct-22 22-Nov-23 - 9,590 100 233,169 - - - (9,590) 100 233,490 - - Deferred shares 10,511 25.66 01-Oct-23 22-Nov-24 - - - - - - - - - - - 10,511 Deferred shares 10,511 25.66 01-Oct-23 22-Nov-25 - - - - - - - - - - - 10,511 Deferred share rights 19,727 22-Nov-19 22-Nov-23 22-Nov-23 19,727 100 479,638 - - - (19,727) 100 479,638 - - Restricted rights 25,661 18.92 22-Nov-23 22-Nov-27 22-Nov-29 - - - - - - - - - - 25,661 Restricted rights 25,661 17.77 22-Nov-23 22-Nov-28 22-Nov-30 - - - - - - - - - - 25,661 F Faruqui Deferred shares 1,797 21-Nov-14 21-Nov-17 - - - - - - - (1,797) 100 50,778 - - Deferred shares 8,523 22-Nov-21 22-Nov-22 - - - - - - - (8,523) 100 240,834 - - Deferred shares 7,862 22-Nov-21 22-Nov-23 - 7,862 100 191,155 - - - (7,862) 100 216,332 - - Deferred shares 12,950 01-Oct-22 22-Nov-23 - 12,950 100 314,864 - - - (12,950) 100 365,927 - - Deferred shares 11,844 25.66 01-Oct-23 22-Nov-24 - - - - - - - - - - - 11,844 71 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 71 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() Type of equity Number granted 1 Equity fair value (for 2024 grants only) $ Grant date First date exercisable Date of expiry Vested Lapsed/ Forfeited Exercised/Sold Vested and exercis- able as at 30 Sep 2024 3 Unexer- cisable as at 30 Sep 2024 4 Name Number % Value 2 $ Number % Value 2 $ Number % Value 2 $ CEO and Current Disclosed Executives F Faruqui Deferred shares 11,843 25.66 01-Oct-23 22-Nov-25 - - - - - - - - - - - 11,843 Deferred share rights 4,257 22-Nov-19 22-Nov-23 22-Nov-23 4,257 100 103,504 - - - (4,257) 100 103,504 - - Deferred share rights 3,619 07-Dec-20 22-Nov-23 22-Nov-23 3,619 100 87,992 - - - (3,619) 100 87,992 - - Restricted rights 16,988 18.92 22-Nov-23 22-Nov-27 22-Nov-29 - - - - - - - - - - 16,988 Restricted rights 16,988 17.77 22-Nov-23 22-Nov-28 22-Nov-30 - - - - - - - - - - 16,988 Performance rights 51,839 22-Nov-19 22-Nov-23 22-Nov-25 - - - (51,839) 100 (1,260,403) - - - - - Performance rights 17,279 22-Nov-19 22-Nov-23 22-Nov-25 - - - (17,279) 100 (420,118) - - - - - Performance rights 12,741 11.94 22-Nov-23 22-Nov-27 22-Nov-29 - - - - - - - - - - 12,741 Performance rights 4,247 7.37 22-Nov-23 22-Nov-27 22-Nov-29 - - - - - - - - - - 4,247 Performance rights 12,741 10.74 22-Nov-23 22-Nov-28 22-Nov-30 - - - - - - - - - - 12,741 Performance rights 4,247 7.26 22-Nov-23 22-Nov-28 22-Nov-30 - - - - - - - - - - 4,247 G Florian Deferred shares 2,775 22-Nov-18 22-Nov-22 - - - - - - - (2,775) 100 71,726 - - Deferred shares 4,491 22-Nov-19 22-Nov-20 - - - - - - - (4,491) 100 119,651 - - Deferred shares 1,122 22-Nov-19 22-Nov-23 - 1,122 100 27,280 - - - (1,122) 100 29,893 - - Deferred shares 3,219 07-Dec-20 22-Nov-23 - 3,219 100 78,266 - - - (3,219) 100 85,762 - - Deferred shares 7,326 22-Nov-21 22-Nov-23 - 7,326 100 178,123 - - - (7,326) 100 202,453 - - Deferred shares 9,590 01-Oct-22 22-Nov-23 - 9,590 100 233,169 - - - (9,590) 100 283,731 - - Deferred shares 9,820 25.66 01-Oct-23 22-Nov-24 - - - - - - - - - - - 9,820 Deferred shares 9,820 25.66 01-Oct-23 22-Nov-25 - - - - - - - - - - - 9,820 Restricted rights 16,821 18.92 22-Nov-23 22-Nov-27 22-Nov-29 - - - - - - - - - - 16,821 Restricted rights 16,821 17.77 22-Nov-23 22-Nov-28 22-Nov-30 - - - - - - - - - - 16,821 Performance rights 17,346 22-Nov-19 22-Nov-23 22-Nov-25 - - - (17,346) 100 (421,747) - - - - - Performance rights 5,782 22-Nov-19 22-Nov-23 22-Nov-25 - - - (5,782) 100 (140,582) - - - - - Performance rights 12,616 11.94 22-Nov-23 22-Nov-27 22-Nov-29 - - - - - - - - - - 12,616 Performance rights 4,205 7.37 22-Nov-23 22-Nov-27 22-Nov-29 - - - - - - - - - - 4,205 Performance rights 12,616 10.74 22-Nov-23 22-Nov-28 22-Nov-30 - - - - - - - - - - 12,616 Performance rights 4,205 7.26 22-Nov-23 22-Nov-28 22-Nov-30 - - - - - - - - - - 4,205 C Morgan Deferred shares 3,025 20-Aug-23 20-Aug-24 - 3,025 100 90,420 - - - - - - 3,025 - Deferred shares 5,082 20-Aug-23 20-Aug-24 - 5,082 100 151,906 - - - - - - 5,082 - Deferred shares 4,935 25.66 01-Oct-23 22-Nov-24 - - - - - - - - - - - 4,935 Deferred shares 4,934 25.66 01-Oct-23 22-Nov-25 - - - - - - - - - - - 4,934 Restricted rights 15,122 18.92 22-Nov-23 22-Nov-27 22-Nov-29 - - - - - - - - - - 15,122 Restricted rights 15,122 17.77 22-Nov-23 22-Nov-28 22-Nov-30 - - - - - - - - - - 15,122 Performance rights 11,342 11.94 22-Nov-23 22-Nov-27 22-Nov-29 - - - - - - - - - - 11,342 Performance rights 3,780 7.37 22-Nov-23 22-Nov-27 22-Nov-29 - - - - - - - - - - 3,780 Performance rights 11,342 10.74 22-Nov-23 22-Nov-28 22-Nov-30 - - - - - - - - - - 11,342 Performance rights 3,780 7.26 22-Nov-23 22-Nov-28 22-Nov-30 - - - - - - - - - - 3,780 A Strong Deferred shares 2,590 07-Dec-20 22-Nov-22 - - - - - - - (2,590) 100 63,059 - - Deferred shares 3,229 07-Dec-20 22-Nov-23 - 3,229 100 78,509 - - - (3,229) 100 78,617 - - Deferred shares 4,189 22-Nov-21 22-Nov-22 - - - - - - - (4,189) 100 101,990 - - Deferred shares 4,187 22-Nov-21 22-Nov-23 - 4,187 100 101,802 - - - (4,187) 100 101,942 - - Deferred shares 6,133 01-Oct-22 22-Nov-23 - 6,133 100 149,117 - - - (6,133) 100 149,321 - - Deferred shares 6,761 25.66 01-Oct-23 22-Nov-24 - - - - - - - - - - - 6,761 Deferred shares 6,760 25.66 01-Oct-23 22-Nov-25 - - - - - - - - - - - 6 ,760 Restricted rights 11,325 18.92 22-Nov-23 22-Nov-27 22-Nov-29 - - - - - - - - - - 11,325 Restricted rights 11,325 17.77 22-Nov-23 22-Nov-28 22-Nov-30 - - - - - - - - - - 11,325 72 Australia and New Zealand Banking Group Limited 2024 Annual Report 72 Australia and New Zealand Banking Group Limited 2024 Annual Report ![]() 1. For the purpose of the five highest paid executive disclosures, Executives are defined as Disclosed Executives or other members of the ExCo. For the 2024 financial year the five highest paid executives include five Disclosed Executives. Rights granted to Disclosed Executives as remuneration in 2024 are included in the table. No rights have been granted to the CEO, Disclosed Executives or the five highest paid executives since the end of 2024 up to the Directors’ Report sign-off date. 2. The point in time value of deferred shares/deferred share rights and/or restricted rights/performance rights is based on the one day VWAP of the Company’s shares traded on the ASX on the date of vesting, lapsing/forfeiture or exercising/sale/transfer out of trust, multiplied by the number of deferred shares/deferred share rights and/or restricted rights/performance rights. The exercise price for all deferred share rights/restricted rights/ performance rights is $0.00. No terms or conditions of grant of the share-based payment transactions have been altered or modified during the reporting period. 3. The number vested and exercisable is the number of shares, options and rights that remain vested at the end of the reporting period. No shares, options and rights were vested and unexercisable. 4. Performance rights granted in prior years (by grant date) that remained unexerciseable at 30September 2024 or date ceased as a KMP include (the below): Nov-20 Nov-21 Nov-22 Nov-23 S Elliott 159,308 126,353 73,143 66,618 M Carnegie 38,378 42,345 36,572 34,642 E Clements - - - 21,316 K Corbally ---- F Faruqui 34,045 54,006 36,572 33,976 G Florian 34,820 50,324 33,644 33,642 C Morgan - - 18,421 30,244 A Strong - - 21,944 22,650 A Watson 31,389 51,117 32,442 30,098 M Whelan 34,045 60,266 42,716 39,970 R Howell ---- Type of equity Number granted 1 Equity fair value (for 2024 grants only) $ Grant date First date exercisable Date of expiry Vested Lapsed/ Forfeited Exercised/Sold Vested and exercis- able as at 30 Sep 2024 3 Unexer- cisable as at 30 Sep 2024 4 Name Number % Value 2 $ Number % Value 2 $ Number % Value 2 $ CEO and Current Disclosed Executives A Strong Performance rights 8,494 11.94 22-Nov-23 22-Nov-27 22-Nov-29 - - - - - - - - - - 8,494 Performance rights 2,831 7.37 22-Nov-23 22-Nov-27 22-Nov-29 - - - - - - - - - - 2,831 Performance rights 8,494 10.74 22-Nov-23 22-Nov-28 22-Nov-30 - - - - - - - - - - 8,494 Performance rights 2,831 7.26 22-Nov-23 22-Nov-28 22-Nov-30 - - - - - - - - - - 2,831 A Watson Deferred shares 29 03-Dec-18 03-Dec-21 - - - - - - - (29) 100 856 - - Deferred shares 32 02-Dec-19 02-Dec-22 - - - - - - - (32) 100 945 - - Deferred shares 4,541 22-Nov-19 22-Nov-23 - 4,541 100 110,409 - - - (4,541) 100 128,315 - - Deferred shares 2,902 07-Dec-20 22-Nov-23 - 2,902 100 70,559 - - - (2,902) 100 82,815 - - Deferred shares 7,442 22-Nov-21 22-Nov-23 - 7,442 100 180,943 - - - (5,357) 72 158,151 2,085 - Deferred shares 9,162 01-Oct-22 22-Nov-23 - 9,162 100 222,763 - - - - - - 9,162 - Deferred shares 9,328 25.66 01-Oct-23 22-Nov-24 - - - - - - - - - - - 9,328 Deferred shares 9,328 25.66 01-Oct-23 22-Nov-25 - - - - - - - - - - - 9,328 Restricted rights 15,050 18.92 22-Nov-23 22-Nov-27 22-Nov-29 - - - - - - - - - - 15,050 Restricted rights 15,050 17.77 22-Nov-23 22-Nov-28 22-Nov-30 - - - - - - - - - - 15,050 Performance rights 11,287 11.94 22-Nov-23 22-Nov-27 22-Nov-29 - - - - - - - - - - 11,287 Performance rights 3,762 7.37 22-Nov-23 22-Nov-27 22-Nov-29 - - - - - - - - - - 3,762 Performance rights 11,287 10.74 22-Nov-23 22-Nov-28 22-Nov-30 - - - - - - - - - - 11,287 Performance rights 3,762 7.26 22-Nov-23 22-Nov-28 22-Nov-30 - - - - - - - - - - 3,762 M Whelan Deferred shares 3,499 22-Nov-19 22-Nov-23 - 3,499 100 85,074 - - - (3,499) 100 85,085 - - Deferred shares 3,148 07-Dec-20 22-Nov-23 - 3,148 100 76,540 - - - (3,148) 100 76,550 - - Deferred shares 8,774 22-Nov-21 22-Nov-23 - 8,774 100 213,329 - - - (8,774) 100 213,357 - - Deferred shares 11,595 01-Oct-22 22-Nov-23 - 11,595 100 281,919 - - - (11,595) 100 281,956 - - Deferred shares 14,410 25.66 01-Oct-23 22-Nov-24 - - - - - - - - - - - 14,410 Deferred shares 14,409 25.66 01-Oct-23 22-Nov-25 - - - - - - - - - - - 14,409 Restricted rights 19,986 18.92 22-Nov-23 22-Nov-27 22-Nov-29 - - - - - - - - - - 19,986 Restricted rights 19,986 17.77 22-Nov-23 22-Nov-28 22-Nov-30 - - - - - - - - - - 19,986 Performance rights 54,081 22-Nov-19 22-Nov-23 22-Nov-25 - - - (54,081) 100 (1,314,915) - - - - - Performance rights 18,027 22-Nov-19 22-Nov-23 22-Nov-25 - - - (18,027) 100 (438,305) - - - - - Performance rights 14,989 11.94 22-Nov-23 22-Nov-27 22-Nov-29 - - - - - - - - - - 14,989 Performance rights 4,996 7.37 22-Nov-23 22-Nov-27 22-Nov-29 - - - - - - - - - - 4,996 Performance rights 14,989 10.74 22-Nov-23 22-Nov-28 22-Nov-30 - - - - - - - - - - 14,989 Performance rights 4,996 7.26 22-Nov-23 22-Nov-28 22-Nov-30 - - - - - - - - - - 4,996 Former Disclosed Executives R Howell 6 Performance rights granted to S Elliott in 2024 were approved by shareholders at the 2023 AGM in accordance with ASX Listing Rule 10.14. 5. Equity transactions disclosed from date commenced as a Disclosed Executive. 6. Equity transactions disclosed up to date ceased as a KMP. There were no disclosable transactions for R Howell. 73 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 73 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 9.3.2 NED, CEO and Disclosed Executives’ equity holdings The table below sets out details of equity held directly, indirectly or beneficially by each NED, the CEO and each Disclosed Executive, including their related parties. Equity holdings – NED, CEO and Disclosed Executives Name Type of equity Opening balance at 1 Oct 2023 Granted during the year as remuneration 1 Received during the year on exercise of options or rights Resulting from any other changes during the year 2 Closing balance at 30 Sep 2024 3,4 Current Non-Executive Directors P O'Sullivan Ordinary shares 4,350 - - - 4,350 Capital notes 7 9,250 - - - 9,250 J Cincoa 5 R Gibb 5 Ordinary shares - - - 1,032 1,032 Capital notes 7 - - - 194 194 Capital notes 8 - - - 196 196 J Halton Ordinary shares 10,058 - - - 10,058 G Hodges Ordinary shares 184,401 - - - 184,401 Capitol notes 4 1,350 - - (1,350) - H Kramer Ordinary shares 5,828 - - - 5,828 C O'Reilly Ordinary shares 6,400 - - - 6,400 J Smith Ordinary shares 2,779 - - - 2,779 S St John 5 Ordinary shares 2,000 - - 1,000 3,000 Former Non-Executive Directors I Atlas 6 Ordinary shares 15,318 - - - 15,318 J Key 6 Ordinary shares 10,500 - - - 10,500 J Macfarlane 6 Ordinary shares 19,042 - - - 19,042 Capital notes 6 2,140 - - - 2,140 Capital notes 7 2,000 - - - 2,000 Capital notes 8 5,000 - - - 5,000 CEO and Current Disclosed Executives S Ellio Deferred shares 73,103 48,953 - (39,407) 82,649 Ordinary shares 495,640 - - 44,648 540,288 Restricted rights 73,145 66,619 - - 139,764 Performance rights 526,870 66,618 - (168,066) 425,422 M Carnegie Deferred shares 132,773 21,713 - (84,865) 69,621 Ordinary shares 41,580 - - 4,298 45,878 Restricted rights 36,572 34,642 - - 71,214 Performance rights 158,111 34,642 - (40,816) 151,937 E Clements 5 Deferred shares 17,775 12,306 - - 30,081 Ordinary shares 993 - - 1,567 2,560 Restricted rights - 21,318 - - 21,318 Performance rights - 21,316 - - 21,316 K Corbally Deferred shares 45,958 21,022 - (23,786) 43,194 Ordinary shares 4,345 - 19,727 (24,072) - Capital notes 6 1,400 - - - 1,400 Deferred share rights 62,675 - (19,727) - 42,948 Restricted rights 54,182 51,322 - - 105,504 F Faruqui Deferred shares 51,942 23,687 - (31,132) 44,497 Ordinary shares 120,517 - 6,397 3,238 130,152 Deferred share rights 9,780 - (7,876) - 1,904 Restricted rights 36,572 33,976 - - 70,548 Performance rights 193,741 33,976 - (69,118) 158,599 G Florian Deferred shares 47,048 19,640 - (28,523) 38,165 Ordinary shares 55,612 - - (25,495) 30,117 Restricted rights 33,646 33,642 - - 67,288 Performance rights 141,916 33,642 - (23,128) 152,430 C Morgan 7 Deferred shares 13,189 9,869 - - 23,058 Ordinary shares 25 - - 1,197 1,222 Restricted rights 18,422 30,244 - - 48,666 Performance rights 18,421 30,244 - - 48,665 A Strong Deferred shares 36,779 13,521 - (20,328) 29,972 Ordinary shares 4,235 - - (1,897) 2,338 Restricted rights 21,944 22,650 - - 44,594 Performance rights 21,944 22,650 - - 44,594 A Watson Deferred shares 42,101 18,656 - (12,800) 47,957 Employee Share Oer 61 - - (61) - Ordinary shares 50,974 - - (13,795) 37,179 Restricted rights 32,442 30,100 - - 62,542 Performance rights 114,948 30,098 - - 145,046 74 Australia and New Zealand Banking Group Limited 2024 Annual Report 74 Australia and New Zealand Banking Group Limited 2024 Annual Report ![]() #### 9.4 Loans 9.4.1 Overview When we lend to NEDs, the CEO or Disclosed Executives, we do so 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 – this includes the term of the loan, the security required and the interest rate. Details of the terms and conditions of lending products can be found on anz.com. No amounts have been wrien o during the period, or individual assessed allowance for expected credit losses raised in respect of these balances. Total loans to NEDs, the CEO and Disclosed Executives, including their related parties at 30 September 2024 (including those with balances less than $100,000) was $23,446,756 (2023: $30,555,236) with interest paid of $1,077,834 (2023: $1,346,442) during the period. 9.4.2 NED, CEO and Disclosed Executives’ loan transactions The table below sets out details of loans outstanding to NEDs, the CEO and Disclosed Executives including their related parties, if – at any time during the year – the individual’s aggregate loan balance exceeded $100,000. Loan transactions – NED, CEO and Disclosed Executives Names Opening balance at 1 Oct 2023¹ $ Closing balance at 30 Sep 2024 $ Interest paid and payable in the reporting period² $ Highest balance in the reporting period $ Current Non–Executive Directors P O’Sullivan 657,998 675 23 664,981 G Hodges 2,322,355 1,246,738 84,858 2,501,191 H Kramer 3,189,935 3,532,890 205,664 3,602,471 S St John 1,160,096 1,145,916 37,112 1,165,093 CEO and Current Disclosed Executives S Ellio 2,467,062 1,968,205 72,173 2,478,583 M Carnegie 5,602,183 3,782 141,566 5,620,083 G Florian 2,324,157 2,223,982 60,887 2,344,193 A Strong 1,715,981 2,406,222 116,714 2,868,494 M Whelan 1,528,458 1,495,365 95,089 1,578,999 Former Disclosed Executives J Key 3 3,583,961 3,579,413 157,598 3,896,804 J Macfarlane 3 5,907,690 5,762,167 105,883 6,310,584 Total 30,459,876 23,365,355 1,077,567 33,031,476 1. Opening balances have been adjusted for new and leaving KMP. 2. Actual interest paid after considering offset accounts. The loan balance is shown gross, however the interest paid takes into account the impact of offset amounts. 3. Closing balance is as at the date ceased as a KMP. #### 9.5 Other transactions Other transactions with NEDs, the CEO and Disclosed Executives, and their related parties included deposits. Other transactions – NED, CEO and Disclosed Executives Opening balance at 1 Oct 2023 1 $ Closing balance at 30 Sep 2024 2,3 $ Total KMP Deposits 41,142,034 44,115,399 1. Opening balance is at 1 October 2023 or the date of commencement as a KMP if part way through the year and it has been adjusted to take into account timing variances. 2. Closing balance is at 30 September 2024 or at the date ceased as a KMP if part way through the year. 3. Interest received on deposits for 2024 was $854,222 (2023: $1,001,678). Other transactions with KMP and their related parties included amounts paid to the Group in respect of investment management service fees, brokerage, 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 are no more favourable than those given to other employees or customers. M Whelan Deferred shares 48,958 28,819 - (27,016) 50,761 Ordinary shares 47,196 - - (41,820) 5,376 Restricted rights 42,716 39,972 - - 82,688 Performance rights 209,135 39,970 - (72,108) 176,997 Former Disclosed Executives R Howell 6 Deferred shares 12,138 - - - 12,138 1. Details of options/rights granted as remuneration during 2024 are provided in the previous table. 2. Shares resulting from any other changes during the year include the net result of any shares purchased (including under the ANZ Share Purchase Plan), forfeited, sold or acquired under the Dividend Reinvestment Plan. 3. The following shares (included in the holdings above) were held on behalf of the NEDs, CEO and Disclosed Executives (i.e., indirect beneficially held shares) as at 30 September 2024 (or the date ceased as a KMP): P O’Sullivan - 0, J Cincotta - 0, R Gibb - 1,422, J Halton - 0, G Hodges - 45,584, H Kramer - 5,828, C O’Reilly - 0, J Smith - 0, S St John - 3,000, I Atlas - 15,318, J Key - 10,500, J Macfarlane - 28,182, S Elliott - 617,696, M Carnegie - 69,621, E Clements - 30,081, K Corbally - 44,594, F Faruqui - 44,497, G Florian - 68,277, C Morgan - 23,058, A Strong - 29,972, A Watson - 47,957, M Whelan - 52,761, R Howell - 12,138. 4. Zero rights were vested and exercisable, and zero options/rights were vested and unexerciseable as at 30 September 2024. 5. Commencing balance is based on holdings as at the date of commencement as a KMP. 6. Concluding balance is based on holdings as at the date ceased as a KMP. 7. 2023 Remuneration Report incorrectly showed a zero closing balance of ordinary shares. The 25 ordinary shares are still held. 75 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 75 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ## Directors’ Report The Directors’ Report for the financial year ended 30 September 2024 has been prepared in accordance with the requirements of the Corporations Act 2001. The information below forms part of this Directors’ Report: • Principal activities on page 8; • Operating and financial review on pages 20 to 32; • Dividends on page 32; • Information on the Directors on pages 10 to 13; Remuneration report on pages 34 to 75 #### Acquisition of Suncorp Bank 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. #### Significant changes in state #### of affairs There have been no other significant changes in the Group’s state of affairs other than Acquisition of Suncorp Bank, as described above. 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. #### Participation in political party #### activities We aim to assist the democratic process in Australia by attending and participating in paid events hosted by the major federal political parties. For the year ended 30 September 2024, we contributed $115,000 to participate in political activities hosted by the Australian Labor Party, the Liberal Party of Australia and the National Party of Australia. These activities included speeches, political functions and conferences, and policy dialogue forums. We disclose these contributions to the Australian Electoral Commission (AEC), noting the AEC’s reporting year is a different period to the Group’s financial year. #### Modern slavery reporting The Group is subject to Australia's Modern Slavery Act Australian Commonwealth Modern Slavery Act 2018 (Cth) and United Kingdom's Modern Slavery Act 2015. Our Modern Slavery Statement (when released) will set out actions taken to identify, assess and manage modern slavery risks in our operations and supply chain during the 2024 financial year. Our 2024 Modern Slavery Statement will be available at anz.com/esgreport prior to our Annual General Meeting. #### Environmental regulation We recognise the expectations of our stakeholders – customers, shareholders, staff, regulators and the community – to operate in a way that mitigates our environmental impact. In Australia, we meet the requirements of the National Greenhouse and Energy Reporting Act 2007 (Cth), which imposes reporting obligations where energy production, usage or greenhouse gas emissions trigger specified thresholds. We do not believe that our operations are subject to any other particular and significant environmental regulation under a law of the Commonwealth of Australia or of an Australian State or Territory. We may become subject to environmental regulation as a result of our lending activities in the ordinary course of business and have developed policies, which are reviewed on a regular basis, to help identify and manage such environmental matters and regulations. Further details of our environmental performance, including progress against our targets and management of ESG material issues are available in the ESG Supplement, ESG Data and Framework Pack and our Climate-related financial disclosures, at anz.com/annualreport. External auditor The Group’s external auditor is KPMG. The ANZ Group appointed Peat, Marwick, Mitchell & Co (predecessor to KPMG) in 1969. The Board Audit Committee conducts a formal annual performance assessment of the external auditor, including whether to commence an external tender for the audit. After considering relevant factors including tenure, audit quality, local and international capability and experience, and independence, the Board Audit Committee resolved to reappoint KPMG for the 30 September 2025 financial year audit. KPMG regularly rotates the Group Lead Audit Engagement Partner and the Engagement Quality Control Review Partner with the most recent rotation being for the financial years ended 30 September 2023 and 30 September 2020, respectively. #### Non-audit services Our Stakeholder Engagement Model for Relationship with the External Auditor (the Policy), which incorporates requirements of the Corporations Act 2001 and industry best practice, prevents the external auditor from providing services that are perceived to be in conflict with the role of the external auditor or breach independence requirements. This includes consulting advice and sub- contracting 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. 76 Australia and New Zealand Banking Group Limited 2024 Annual Report ![]() Specifically, the Policy: • limits the scope of non-audit services that may be provided; • requires that audit, audit-related and permitted non-audit services be considered in light of independence requirements and for any potential conflicts of interest before they are approved by the Audit Committee, or approved by the Chair of the Audit Committee (or delegate) and notified to the Audit Committee; and • requires pre-approval before the external auditor can commence any engagement for the Group. Further details about the Policy can be found in ANZGHL’s Corporate Governance Statement. The external auditor has confirmed to the Audit Committee that it has: • implemented procedures to ensure it complies with independence rules in applicable jurisdictions; and • complied with applicable policies and regulations in those jurisdictions regarding the provision of non-audit services, and the Policy. The Audit Committee has reviewed the non-audit services provided by the external auditor during the 2024 financial year, and has confirmed that the provision of these services is consistent with the Policy, compatible with the general standard of independence for auditors imposed by the Corporations Act 2001 and did not compromise the auditor independence requirements of the Corporations Act 2001. This has been formally advised by the Audit Committee to the Board of Directors. The categories of non-audit services supplied to the Group during the year ended 30 September 2024 by the external auditor, KPMG, or by another person or firm on KPMG’s behalf, and the amounts paid or payable (including GST) by the Group are as follows: Amount paid/ payable $’000’s Non-audit services 2024 2023 Methodology, procedural, operational and administrative reviews 180 105 Total 180 105 Further details on the compensation paid to KPMG are provided in Note 33 Auditor Fees to the financial statements including details of audit-related services provided during the year of $6.79 million (2023: $5.82 million). For the reasons set out above, the Directors are satisfied that the provision of non-audit services by the external auditor during the year ended 30 September 2024 is compatible with the general standard of independence for external auditors imposed by the Corporations Act 2001 and did not compromise the auditor independence requirements of the Corporations Act 2001. #### Directors’ and Officers’Indemnity ANZBGL’s Constitution (Rule 9.1) permits ANZBGL to: • Indemnify any officer or employee of ANZBGL or any of its related bodies corporate, or its auditor, against liabilities (so far as may be permitted under applicable law) incurred as such an officer, employee or auditor to a person (other than ANZBGL or a related body corporate), including liabilities incurred as a result of appointment or nomination by ANZBGL or a related body corporate as a trustee or as an officer or employee of another corporation; and • Make payments in respect of legal costs incurred by an officer or employee or auditor in defending an action for a liability incurred as such an officer, employee or auditor, or in resisting or responding to actions taken by a government agency, a duly constituted Royal Commission or other official inquiry, a liquidator, administrator, trustee in bankruptcy or other authorised official. Our policy is that our employees should be protected from any liability they incur as a result of acting in the course of their employment, subject to appropriate conditions. Under the policy, we will indemnify employees and former employees against any liability they incur to any third party as a result of acting in good faith in the course of their employment and this extends to liability incurred as a result of their appointment/nomination by or at the request of the ANZ Group as an officer or employee of another corporation or body or as a trustee. The indemnity is subject to applicable law and certain exceptions. ANZBGL has entered into Indemnity Deeds with each of its Directors, with certain secretaries and former Directors of ANZBGL, and with certain employees and other individuals who act as directors or officers of related bodies corporate or of another company, to indemnify them against liabilities and legal costs of the kind mentioned in ANZBGL’s Constitution. During the 2024 financial year, we have paid premiums for insurance for the benefit of the Directors and employees of the Group. In accordance with common commercial practice, the insurance prohibits disclosure of the nature of the liability insured against and the amount of the premium. #### Key management personnel and employee share and #### option plans The Remuneration Report contains details of Non-Executive Directors (NEDs), the Chief Executive Officer (CEO) and Disclosed Executives’ equity holdings and options/rights issued during the 2024 financial year. Note 30 Employee Share and Option Plans in the 2024 Financial Report contains details of the 2024 financial year and as at the date of signing the Directors’ Report: • Options/rights issued over shares granted to employees; • Shares issued as a result of the exercise of options/rights granted to employees; and • Other details about share options/rights issued, including any rights to participate in any share issues. The names of all persons who currently hold options/rights are entered in the register kept by ANZGHL pursuant to section 170 of the Corporations Act 2001. This register may be inspected free of charge. 77 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() #### Rounding of amounts ANZBGL is a company of the kind referred to in Australian Securities and Investments Commission Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 dated 24 March 2016 and, in accordance with that Instrument, amounts in the consolidated financial statements and this Directors’ Report have been rounded to the nearest million dollars unless specifically stated otherwise. This report is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the Directors. Paul O’Sullivan Chairman 7 November 2024 Shayne Elliott Managing Director #### Lead Auditor’s Independence Declaration The Lead Auditors Independence Declaration given under section 307C of the Corporations Act 2001 is set out below and forms part of the Directors’ Report for the year ended 30 September 2024. To: the Directors of Australia and New Zealand Banking Group Limited I declare that, to the best of my knowledge and belief, in relation to the audit of Australia and New Zealand Banking Group Limited for the financial year ended 30 September 2024, there have been: • No contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and • No contraventions of any applicable code of professional conduct in relation to the audit. KPMG 7 November 2024 Maria Trinci Partner KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. 78 Australia and New Zealand Banking Group Limited 2024 Annual Report ![]() ## Financial Report ## Financial Report #### Contents Consolidated Financial Statements Income Statement 80 Statement of Comprehensive Income 81 Balance Sheet 82 Cash Flow Statement 83 Statement of Changes in Equity 84 Notes to the Consolidated FinancialStatements Basis of preparation 1. About our Financial Statements 86 Financial performance 2. Net interest income 89 3. Non-interest income 90 4. Operating expenses 92 5. Income tax 94 6. Dividends 97 7. Segment reporting 98 Financial assets and other tradingassets 8. Cash and cash equivalents 102 9. Trading assets 103 10. Derivative financial instruments 104 11. Investment securities 116 12. Net loans and advances 118 13. Allowance for expected credit losses 119 Financial liabilities 14. Deposits and other borrowings 129 15. Payables and other liabilities 130 16. Debt issuances 131 Financial instrument disclosures 17. Financial risk management 137 18. Fair value of financial assets and financial liabilities 159 19. Assets charged as security for liabilities and collateral accepted as security for assets 166 20. Oseing 167 Non-financial assets 21. Goodwill and other intangible assets 169 Non-financial liabilities 22. Other provisions 173 Equity 23. Shareholders’ equity 175 24. Capital management 178 Consolidation and presentation 25. Controlled entities 181 26. Investments in associates 183 27. Structured entities 185 28. Transfers of financial assets 188 Employee and related partytransactions 29. Superannuation and post employment benefit obligations 189 30. Employee share and option plans 191 31. Related party disclosures 197 Other disclosures 32. Commitments, contingent liabilities and contingent assets 200 33. Auditor fees 203 34. Suncorp Bank acquisition 204 35. Events since the end of the financial year 205 Consolidated entity 206 disclosure statement Directors’ declaration 209 Independent auditor’s report 210 79 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 79 ![]() #### Income Statement Consolidated The Company 2024 2023 2024 2023 For the year ended 30 September Note $m $m $m $m Interest income 1 60,678 49,929 49,868 41,144 Interest expense (44,641) (33,361) (38,622) (29,026) Net interest income 2 16,037 16,568 11,246 12,118 Other operating income 3 4,228 3,577 9,791 5,401 Net income from insurance business 3 122 108 - - Share of associates' profit/(loss) 3 134 225 - (18) Operating income 20,521 20,478 21,037 17,501 Operating expenses 4 (10,669) (10,087) (8,777) (8,488) Profit before credit impairment and income tax 9,852 10,391 12,260 9,013 Credit impairment (charge)/release 13 (406) (245) (126) (75) Profit before income tax 9,446 10,146 12,134 8,938 Income tax expense 5 (2,816) (2,945) (1,879) (1,964) Profit for the year 6,630 7,201 10,255 6,974 Comprising: Profit attributable to shareholders of the Company 6,595 7,173 10,255 6,974 Profit attributable to non-controlling interests 35 28 - - 1.  Includes interest income calculated using the effective interest method on financial assets measured at amortised cost or fair value through other comprehensive income of $55,717 million (2023: $46,920 million) in the Group and $43,743 million (2023: $37,235 million) in the Company. The notes appearing on pages 86 to 205 form an integral part of these financial statements. 80 Australia and New Zealand Banking Group Limited 2024 Annual Report 80 ![]() #### Statement of Comprehensive Income   Consolidated The Company 2024 2023 2024 2023 For the year ended 30 September $m $m $m $m Profit after tax 6,630 7,201 10,255 6,974 Other comprehensive income Items that will not be reclassified subsequently to profit or loss Investment securities - equity securities at FVOCI 148 (30) 145 (23) Other reserve movements 1 (17) (80) (6) (105) Items that may be reclassified subsequently to profit or loss Foreign currency translation reserve (930) 718 (399) 64 Cash flow hedge reserve 2,069 235 1,888 339 Other reserve movements (774) (36) (763) 39 Income tax attributable to the above items (402) (22) (344) (73) Share of associates’ other comprehensive income 2 (23) 31 - - Total comprehensive income for the year 6,701 8,017 10,776 7,215 Comprising total comprehensive income attributable to: Shareholders of the Company 6,676 7,962 10,776 7,215 Non-controlling interests 1 25 55 - - 1.  The Group includes foreign currency translation differences attributable to non-controlling interests of $10 million (2023: $27 million). 2.  The Group’s share of associates’ other comprehensive income, that may be reclassified subsequently to profit or loss in the Group, includes: 2024 $m 2023 $m FVOCI reserve gain/(loss) (10) 25 Defined benefits gain/(loss) (13) 6 Total (23) 31 The notes appearing on pages 86 to 205 form an integral part of these financial statements. 81 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() #### Balance Sheet   Consolidated The Company 2024 2023 2024 2023 As at 30 September Note $m $m $m $m Assets Cash and cash equivalents 1 8 150,965 168,154 137,288 154,408 Settlement balances owed to ANZ 5,484 9,349 5,019 8,935 Collateral paid 10,090 8,558 8,797 7,717 Trading assets 9 45,755 37,004 38,427 30,693 Derivative financial instruments 10 54,370 60,406 57,627 59,989 Investment securities 11 140,262 96,969 113,966 83,201 Net loans and advances 12 804,032 707,694 588,998 563,017 Regulatory deposits 665 646 222 284 Due from controlled entities - - 24,315 26,067 Shares in controlled entities 25 - - 24,316 16,277 Investments in associates 26 1,415 2,321 - - Current tax assets 19 37 19 9 Deferred tax assets 5 3,302 3,398 2,750 2,988 Goodwill and other intangible assets 21 5,421 3,961 995 935 Premises and equipment 2,388 2,360 1,807 1,923 Other assets 5,417 5,207 3,645 3,636 Total assets 1,229,585 1,106,064 1,008,191 960,079 Liabilities Settlement balances owed by ANZ 16,188 19,267 11,317 16,574 Collateral received 6,583 10,382 6,061 9,452 Deposits and other borrowings 14 905,166 815,203 703,870 675,075 Derivative financial instruments 10 55,254 57,482 57,467 57,511 Due to controlled entities - - 25,660 26,894 Current tax liabilities 360 305 59 133 Deferred tax liabilities 5 64 60 61 47 Payables and other liabilities 15 18,594 15,984 14,474 13,279 Employee entitlements 644 568 457 424 Other provisions 22 1,584 1,714 1,319 1,499 Debt issuances 16 156,388 116,014 122,950 98,213 Total liabilities 1,160,825 1,036,979 943,695 899,101 Net assets 68,760 69,085 64,496 60,978 Shareholders' equity Ordinary share capital 23 27,065 29,082 26,988 29,005 Reserves 23 (1,678) (1,796) (1,676) (2,222) Retained earnings 23 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 23 771 522 - - Total shareholders' equity 68,760 69,085 64,496 60,978 1.  Includes Settlement balances owed to ANZ that meet the definition of Cash and cash equivalents. The notes appearing on pages 86 to 205 form an integral part of these financial statements. 82 Australia and New Zealand Banking Group Limited 2024 Annual Report 82 ![]() #### Cash Flow Statement Consolidated The Company 2024 2023 2024 2023 For the year ended 30 September $m $m $m $m Profit after income tax 6,630 7,201 10,255 6,974 Adjustments to reconcile to net cash provided by/(used in) operating activities: Allowance for expected credit losses 406 245 126 75 Depreciation and amortisation 944 941 749 795 (Gain)/Loss on sale of premises and equipment - 43 - 31 Net derivatives/foreign exchange adjustment 3,244 3,505 1,876 3,074 (Gain)/Loss on sale from divestments 21 (29) - 70 Other non-cash movements (10) (98) 120 124 Net (increase)/decrease in operating assets:  Collateral paid (1,968) 4,143 (1,581) 3,590 Trading assets 1 (3,204) (5,888) (4,355) (7,427) Net loans and advances (33,546) (28,289) (30,642) (25,708) Net intra-group loans and advances - - (1,204) (1,481) Other assets (268) (1,725) (343) (1,333) Net increase/(decrease) in operating liabilities:  Deposits and other borrowings 43,060 21,866 41,140 21,353 Settlement balances owed by ANZ (2,905) 5,278 (5,127) 6,314 Collateral received (3,368) (5,848) (2,922) (4,886) Other liabilities 1 2,010 4,850 1,347 4,363 Total adjustments 4,416 (1,006) (816) (1,046) Net cash provided by/(used in) operating activities 2 11,046 6,195 9,439 5,928 Cash flows from investing activities Acquisition of Suncorp Bank, net of cash acquired (4,914) - (6,247) - Investment securities assets: Purchases (84,777) (51,974) (77,131) (46,130) Proceeds from sale or maturity 47,542 41,401 42,662 35,495 Proceeds from divestments, net of cash disposed 686 1,135 - 1,174 Net movement in shares in controlled entities - - (21) (29) Net investments in other assets (604) (604) (486) (612) Net cash provided by/(used in) investing activities (42,067) (10,042) (41,223) (10,102) Cash flows from financing activities Deposits and other borrowings (repaid)/drawn down (1,014) (11,105) - (12,002) Debt issuances: 3 Issue proceeds 50,604 44,182 46,870 40,428 Redemptions (25,367) (23,985) (21,886) (19,641) Dividends paid 4 (5,252) (4,700) (5,220) (4,673) On-market purchase of treasury shares (126) (21) (126) (21) Repayment of lease liabilities (342) (337) (271) (277) Capital return (2,000) - (2,000) - ANZ Bank New Zealand Perpetual Preference Shares 252 - - - Net cash provided by/(used in) financing activities 16,755 4,034 17,367 3,814 Net increase/(decrease) in Cash and cash equivalents (14,266) 187 (14,417) (360) Cash and cash equivalents at beginning of year 168,154 168,132 154,408 155,483 Effects of exchange rate changes on Cash and cash equivalents (2,923) (165) (2,703) (715) Cash and cash equivalents at end of year 150,965 168,154 137,288 154,408 1.  Certain items were reclassified from Other liabilities to Trading assets to better reflect the movement in operating assets and operating liabilities. Comparative information was restated with a decrease of $5,865 million in Trading assets and a corresponding increase in Other liabilities for the Group, and $5,658 million for the Company. 2.  Net cash provided by/(used in) operating activities for the Group includes interest received of $59,657 million (2023: $48,362 million), interest paid of $43,537 million (2023: $30,738 million) and income taxes paid of $2,925 million (2023: $3,501 million). Net cash provided by/(used in) operating activities for the Company includes interest received of $49,705 million (2023: $40,353 million), interest paid of $38,351 million (2023: $26,846 million) and income taxes paid of $2,084 million (2023: $2,384 million). 3.  Non-cash movements on Debt issuances include a gain of $711 million (2023: $2,084 million loss) from unrealised movements primarily due to fair value hedging adjustments and foreign exchange losses for the Group, and include a gain of $246 million (2023: $1,598 million loss) from unrealised movements primarily due to fair value hedging and foreign exchange losses for the Company. 4.  Cash outflow for shares purchased in 2023 to satisfy the dividend reinvestment plan are classified in Dividends paid. The notes appearing on pages 86 to 205 form an integral part of these financial statements. 83 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 83 ![]() #### Statement of Changes in Equity Ordinary share capital Reserves Retained earnings Share capital and reserves attributable to shareholders of the Company Non- controlling interests Total shareholders’ equity Consolidated $m $m $m $m $m $m As at 1 October 2022 28,797 (2,606) 39,716 65,907 494 66,401 Impact on transition to AASB 17 - - (37) (37) - (37) Profit or loss for the year - - 7,173 7,173 28 7,201 Other comprehensive income for the year - 863 (74) 789 27 816 Total comprehensive income for the year - 863 7,099 7,962 55 8,017 Transactions with equity holders in their capacity as equity holders: Dividends paid - - (5,559) (5,559) (27) (5,586) Dividend reinvestment plan 1 206 - - 206 - 206 Other equity movements: Employee share and option plans 79 - - 79 - 79 ANZ Bank New Zealand Perpetual Preference Shares 2 - (39) 39 - - - Other items - (14) 19 5 - 5 As at 30 September 2023 29,082 (1,796) 41,277 68,563 522 69,085 Profit or loss for the year - - 6,595 6,595 35 6,630 Other comprehensive income for the year - 101 (20) 81 (10) 71 Total comprehensive income for the year - 101 6,575 6,676 25 6,701 Transactions with equity holders in their capacity as equity holders: Dividends paid - - (5,267) (5,267) (32) (5,299) Other equity movements: Employee share and option plans (17) 23 4 10 - 10 ANZ Bank New Zealand Perpetual Preference Shares 2 - - (4) (4) 256 252 Capital return (2,000) - - (2,000) - (2,000) Other items - (6) 17 11 - 11 As at 30 September 2024 27,065 (1,678) 42,602 67,989 771 68,760 1.  8.4 million shares were issued under the dividend reinvestment plan for the 2022 final dividend. 2.  Perpetual preference shares issued by ANZ Bank New Zealand, a wholly owned subsidiary of ANZBGL, are considered non-controlling interests to the Group. The notes appearing on pages 86 to 205 form an integral part of these financial statements. 84 Australia and New Zealand Banking Group Limited 2024 Annual Report 84 ![]() #### Statement of Changes in Equity Ordinary share capital Reserves Retained earnings Total shareholders’ equity The Company $m $m $m $m As at 1 October 2022 28,720 (2,546) 32,859 59,033 Profit for the year - - 6,974 6,974 Other comprehensive income for the year - 319 (78) 241 Total comprehensive income for the year - 319 6,896 7,215 Transactions with equity holders in their capacity as equity holders: Dividends paid - - (5,559) (5,559) Dividend Reinvestment Plan 1 206 - - 206 Other equity movements: Employee share and option plans 79 - - 79 Other items - 5 (1) 4 As at 30 September 2023 29,005 (2,222) 34,195 60,978 Profit for the year - - 10,255 10,255 Other comprehensive income for the year - 527 (6) 521 Total comprehensive income for the year - 527 10,249 10,776 Transactions with equity holders in their capacity as equity holders: Dividends paid - - (5,267) (5,267) Other equity movements: - Employee share and option plans (17) 23 4 10 Capital return (2,000) - - (2,000) Other items - (4) 3 (1) As at 30 September 2024 26,988 (1,676) 39,184 64,496 1.  8.4 million shares were issued under the dividend reinvestment plan for the 2022 final dividend. The notes appearing on pages 86 to 205 form an integral part of these financial statements. 85 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 85 ![]() ### 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. 87 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 87 ![]() 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. 89 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 89 ![]() 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. 91 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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 92 ![]() 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. Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 93 ![]() 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. 95 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 95 ![]() 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. 97 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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. 99 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report 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. 101 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() #### 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 6,399 103 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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. 105 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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. | 107 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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. 109 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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. 111 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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 | 113 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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. 115 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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. 117 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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). 119 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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 | 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 | 121 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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. 123 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 13. Allowance for expected credit losses #### (continued) 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”. | 125 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 13. Allowance for expected credit losses #### (continued) | | | | | --- | --- | --- | | 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) 127 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() #### 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 42,206 129 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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 | 131 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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. 133 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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. 135 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 16. Debt issuances (continued) 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 | 137 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 17. Financial risk management (continued) 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 | 139 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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. 141 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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 | 143 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial 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 | | 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. 145 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 17. Financial risk management (continued) 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% | 147 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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 | 149 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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. 151 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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. 153 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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. 155 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 17. Financial risk management (continued) 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. 157 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 17. Financial risk management (continued) 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 | 159 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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. 161 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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. 163 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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. 165 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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. 167 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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 | - | 169 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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. | 171 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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 | 173 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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 | 175 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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. | 177 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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. 179 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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. 181 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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. 183 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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. 185 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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. 187 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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 . 189 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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. | 191 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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. | 193 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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 | | | | | | | | | | | | | | $0.00 | | Outstanding exercisable options/rights | | | | | | 124,377 | 1. Refers to any circumstance where equity can be forfeited (for example on cessation, downward adjustment or performance conditions not met). All of the shares issued as a result of the exercise of options/rights during 2024 and 2023, were issued at a nil exercise price. 195 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 30. Employee share and option plans (continued) As at the date of the signing of the Directors’ Report on 7 November 2024: • no options/rights over ordinary shares have been granted since the end of 2024; and • 6,126 shares issued as a result of the exercise of options/rights since the end of 2024, all with a nil exercise price. Fair value assumptions When determining the fair value, we apply the standard market techniques for valuation, including Monte Carlo and/or Black Scholes pricing models. We do so in accordance with the requirements of AASB 2 Share-based Payments. The models take into account early exercise of vested equity, non- transferability and internal/external performance hurdles (if any). The table below shows the significant assumptions we used as inputs into our fair value calculation of instruments granted during the period. We present the values as weighted averages, but the specific values we use for each allocation are the ones we use for the fair value calculation. | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | | | | 2024 | | | | | | | | | | | 2023 | | | | Deferred | | | | | | | | share | | | | | | | | rights | | | | | | | | | | | | | | | | | Restricted | | | | | | | | rights | | | | | | | | | Performance | | | | | | | | rights | | | | | | | | | Deferred | | | | | | | | | | | | | | | | share | | | | | | | | rights | | | | | | | | | Restricted | | | | | | | | rights | | | | | | | | | Performance | | | | | | | | | | | | | | | | rights | | Exercise price ($) | 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. 197 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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). 199 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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. 201 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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. 203 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() 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. 205 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() #### Consolidated Entity Disclosure Statement #### Basis of preparation This Consolidated Entity Disclosure Statement has been prepared in accordance with subsection 295(3A) of the Corporations Act 2001. The entities listed in the statement are for Australia and New Zealand Banking Group Limited and all its controlled entities as at 30 September 2024 in accordance with AASB 10 Consolidated Financial Statements. Entity Name Entity Type Place Formed or Incorporated % of Share Capital Held Tax Residency (Australia or Foreign Jurisdiction) ANZ Finance American Samoa, Inc Body corporate American Samoa 100% American Samoa 1835 Funding Pty Limited Body corporate Australia 0% Australia 1835i Ventures Trust I-A Trust N/A N/A Australia 1835i Ventures Trust III-A Trust N/A N/A Australia A.C.N. 660 735 311 Pty Limited Body corporate Australia 100% Australia A.C.N. 660 735 697 Pty Limited Body corporate Australia 100% Australia A.C.N. 660 736 238 Pty Limited Body corporate Australia 100% Australia ACN 008 647 185 Pty Ltd 1 Body corporate Australia 100% Australia ANZ Capital No. 1 Pty Ltd Body corporate Australia 100% Australia ANZ Commodity Trading Pty Ltd Body corporate Australia 100% Australia ANZ Fiduciary Services Pty Ltd Body corporate Australia 100% Australia ANZ Funds Pty Ltd Body corporate Australia 100% Australia ANZ Global Services and Operations Pty Limited Body corporate Australia 100% Australia ANZ ILP Pty Ltd Body corporate Australia 100% Australia ANZ International Private Limited Body corporate Singapore 100% Australia ANZ Leasing (BWC Financing) Pty Ltd Body corporate Australia 100% Australia ANZ Leasing (MAGA) Pty Ltd Body corporate Australia 100% Australia ANZ Lenders Mortgage Insurance Pty Limited Body corporate Australia 100% Australia ANZ Margin Services Pty Limited Body corporate Australia 100% Australia ANZ Nominees Pty Ltd Body corporate Australia 100% Australia ANZ Properties (Australia) Pty Ltd Body corporate Australia 100% Australia ANZ Residential Covered Bond Trust Trust N/A N/A Australia ANZ Rewards No. 2 Pty Ltd Body corporate Australia 100% Australia ANZ Rural Trust No 1 Trust N/A N/A Australia ANZ Securities (Holdings) Pty Ltd Body corporate Australia 100% Australia ANZ Securities Limited Body corporate Australia 100% Australia ANZ Wealth Australia Pty Ltd Body corporate Australia 100% Australia ANZEST Pty Ltd Body corporate Australia 100% Australia ANZi Holdings Pty Ltd Body corporate Australia 100% Australia APOLLO Series 2008-1R Trust Trust N/A N/A Australia APOLLO Series 2015-1 Trust Trust N/A N/A Australia APOLLO Series 2017-1 Trust Trust N/A N/A Australia APOLLO Series 2017-2 Trust Trust N/A N/A Australia APOLLO Series 2018-1 Trust Trust N/A N/A Australia APOLLO Series 2022-1 Trust Trust N/A N/A Australia APOLLO Series 2023-1 Trust Trust N/A N/A Australia APOLLO Series 2024-1 Trust Trust N/A N/A Australia APOLLO Warehouse Trust No. 2 Trust N/A N/A Australia Australia and New Zealand Banking Group Limited Body corporate Australia N/A Australia Esanda Finance Corporation Pty Ltd Body corporate Australia 100% Australia Institutional Securitisation Services Limited Body corporate Australia 100% Australia Jikk Pty Ltd Body corporate Australia 100% Australia Kingfisher Trust 2008-1 Trust N/A N/A Australia 1.  ACN 008 647 185 Pty Ltd is trustee of Postbank Equity Trust. 206 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report ![]()  #### Consolidated Entity Disclosure Statement (continued) Entity Name Entity Type Place Formed or Incorporated % of Share Capital Held Tax Residency (Australia or Foreign Jurisdiction) Kingfisher Trust 2016-1 Trust N/A N/A Australia Kingfisher Trust 2019-1 Trust N/A N/A Australia Norfina Advances Corporation Pty Ltd Body corporate Australia 100% Australia Norfina Covered Bond Trust Trust N/A N/A Australia Norfina Limited Body corporate Australia 100% Australia OneTwo Finance FSA Pty Ltd Body corporate Australia 100% Australia Postbank Equity Trust Trust N/A N/A Australia SBGH Limited Body corporate Australia 100% Australia Share Investing Pty Ltd Body corporate Australia 100% Australia Shout for Good Pty Ltd Body corporate Australia 100% Australia SME Management Pty Limited Body corporate Australia 100% Australia Votraint No. 1103 Pty Limited Body corporate Australia 100% Australia Australia and New Zealand Bank (China) Company Limited Body corporate China 100% China ANZ Pacific Operations Pte Ltd Body corporate Fiji 100% Fiji ANZ Finance Guam, Inc Body corporate Guam 100% Guam ANZ Guam Inc. Body corporate Guam 100% Guam Citizens Bancorp Body corporate Guam 100% Guam ANZ International (Hong Kong) Limited Body corporate Hong Kong 100% Hong Kong ANZ Capital Private Limited Body corporate India 100% India ANZ Operations And Technology Private Limited Body corporate India 100% India ANZ Support Services India Private Limited Body corporate India 100% India PT Bank ANZ Indonesia Body corporate Indonesia 99% Indonesia ANZ Securities (Japan), Ltd Body corporate Japan 100% Japan ANZ Bank (Kiribati) Limited Body corporate Kiribati 75% Kiribati ANZ Bank New Zealand Limited Body corporate New Zealand 100% New Zealand ANZ Custodial Services New Zealand Limited Body corporate New Zealand 100% New Zealand ANZ Holdings (New Zealand) Limited Body corporate New Zealand 100% New Zealand ANZ Investment Services (New Zealand) Limited Body corporate New Zealand 100% New Zealand ANZ National Staff Superannuation Limited Body corporate New Zealand 100% New Zealand ANZ New Zealand (Int'l) Limited Body corporate New Zealand 100% New Zealand ANZ New Zealand Investments Holdings Limited Body corporate New Zealand 100% New Zealand ANZ New Zealand Investments Limited Body corporate New Zealand 100% New Zealand ANZ New Zealand Investments Nominees Limited Body corporate New Zealand 100% New Zealand ANZNZ Covered Bond Trust Trust N/A N/A New Zealand Arawata Assets Limited Body corporate New Zealand 100% New Zealand Endeavour Finance Limited Body corporate New Zealand 100% New Zealand Kingfisher NZ Trust 2008-1 Trust N/A N/A New Zealand OneAnswer Nominees Limited Body corporate New Zealand 100% New Zealand 8 and 9 Chester Limited Body corporate Papua New Guinea 100% Papua New Guinea ANZ Investments (PNG) Limited Body corporate Papua New Guinea 100% Papua New Guinea Australia and New Zealand Banking Group (PNG) Limited Body corporate Papua New Guinea 100% Papua New Guinea ANZ Global Services And Operations (Manila) Inc Body corporate Philippines 100% Philippines ANZ Bank (Samoa) Limited Body corporate Samoa 100% Samoa ANZcover Insurance Private Ltd Body corporate Singapore 100% Singapore ANZ (Thai) Public Company Limited Body corporate Thailand 100% Thailand ANZ Pensions (UK) Limited Body corporate United Kingdom 100% United Kingdom 207 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() #### Consolidated Entity Disclosure Statement (continued) Entity Name Entity Type Place Formed or Incorporated % of Share Capital Held Tax Residency (Australia or Foreign Jurisdiction) ANZ Securities, Inc. Body corporate United States 100% United States ANZ Bank (Vanuatu) Limited 1 Body corporate Vanuatu 100% N/A La Serigne Limited 1 Body corporate Vanuatu 100% N/A Whitehall Investments Ltd 1 Body corporate Vanuatu 100% N/A ANZ Bank (Vietnam) Limited Body corporate Vietnam 100% Vietnam 1.  Vanuatu does not have a corporate tax regime and therefore the concept of tax residency does not apply. Determination of tax residency In determining tax residency, the consolidated entity has applied the following interpretations: Australian tax residency “Australian resident” has the meaning provided in the Income Tax Assessment Act 1997 (ITAA). In applying that definition, the consolidated entity has applied current legislation and judicial precedent, including having regard to the Commissioner of Taxation’s public guidance in Tax Ruling TR 2018/5 and Practical Compliance Guideline PCG 2018-009. Foreign tax residency Where an entity is shown as being resident in a foreign jurisdiction, this is taken to mean a resident for the purposes of the law of the foreign jurisdiction relating to foreign income tax, within the meaning of the ITAA. #### Key concepts 208 Notes to the consolidated financial statements (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report ![]() #### Directors’ Declaration The Directors of Australia and New Zealand Banking Group Limited declare that: a)  In the Directors’ opinion: i)  the financial statements and notes of the Company and the Consolidated Entity are in accordance with the Corporations Act 2001, including: A. section 296, that they comply with the Australian Accounting Standards and any further requirements of the Corporations Regulations 2001; and B. section 297, that they give a true and fair view of the financial position of the Company and the Consolidated Entity as at 30 September 2024 and of their performance for the year ended on that date; and ii) the Consolidated Entity Disclosure Statement required by section 295(3A) of the Corporations Act 2001 and included on pages 206 to 208 of the financial report is true and correct; and iii) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. b) The notes to the financial statements of the Company and the Consolidated Entity include a statement that the financial statements and notes of the Company and the Consolidated Entity comply with International Financial Reporting Standards; and c) The Directors have been given the declarations required by section 295A of the Corporations Act 2001. Signed in accordance with a resolution of the Directors. Paul D O’Sullivan Chairman 7 November 2024 Shayne C Elliott Managing Director 209 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]()  #### To the shareholders of Australia and New Zealand Banking Group Limited #### Report on the audits of the Financial Reports Opinions We have audited the consolidated Financial Report of Australia and New Zealand Banking Group Limited (the Group Financial Report). We have also audited the Financial Report of Australia and New Zealand Banking Group Limited (the Company Financial Report). In our opinion, each of the accompanying Group Financial Report and Company Financial Report gives a true and fair view, including of the G Group’s and of the C Company’s financial position as at 30 September 2024 and of its financial performance for the year then ended, in accordance with the Corporations Act 2001, in compliance with Australian Accounting Standards and the Corporations Regulations 2001. The respective Financial Reports of the Group and Company comprise: x  Balance Sheets as at 30 September 2024 x  Income Statements, Statements of Comprehensive Income, Statements of Changes in Equity, and Cash Flow Statements for the year then ended x  Consolidated entity disclosure statement and accompanying basis of preparation as at 30 September 2024 x  Notes including material accounting policies x  Directors’ Declaration. The Group consists of Australia and New Zealand Banking Group Limited (the C Company ) and the entities it controlled at the year-end or from time to time during the financial year. Basis for opinions We conducted our audits in accordance with Australian Auditing Standards and International Standards on Auditing. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audits of the Financial Reports section of our report. We are independent of the Group and Company in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audits of the Financial Reports in Australia. We have fulfilled our other ethical responsibilities in accordance with these requirements. Key Audit Matters The Key Audit Matters we identified for the Group and Company are: x  Allowance for expected credit losses x  Subjective and complex valuation of financial instruments held at fair value x  IT systems and controls. The Key Audit Matters for the Group are: x  Carrying value of investments in PT Bank Pan Indonesia (PT Panin) x  Acquisition of Suncorp Bank. Key Audit Matters are those matters that, in our professional judgement, were of most significance in our respective audits of the Financial Reports of the current period. These matters were addressed in the context of our audits of each of the Financial Reports as a whole, and in forming our opinions thereon, and we do not provide a separate opinion on these matters. KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. 210 Australia and New Zealand Banking Group Limited 2024 Annual Report ![]()  Key Audit Matters (continued) Allowance for expected credit losses (Group: $4,555m; Company: $3,409m) Refer to Note 13 to the Group and Company Financial Reports. T The Key Audit Matter Allowance for expected credit losses (ECL) is a Key Audit Matter due to the significance of the loans and advances balances to the Group and Company’s financial statements and the inherent complexity of the Group and Company’s expected credit loss models (ECL models) used to measure ECL allowances. These models are reliant on data and estimates including probability weighted economic scenarios and other key assumptions such as defining a significant increase in credit risk (SICR). AASB 9 Financial Instruments requires the Group and Company to measure ECL on a forward-looking basis reflecting a range of economic conditions. Temporary adjustments are made by the Group and Company to address known ECL model limitations or emerging trends in the loan portfolios. We exercise significant judgement in challenging the economic scenarios and the judgmental temporary adjustments the Group and Company apply. Additional subjectivity and judgement is applied in the Group and Company’s modelling due to the heightened uncertainty associated with the impact of the economic outlook and its impact on customers, increasing our audit effort thereon. H How the matter was addressed in our audit Our audit procedures for the allowance for ECL included assessing the Group and Company’s significant accounting policies against the requirements of the accounting standard. Additionally, our procedures included testing the Group and Company’s key controls in relation to: x The ECL model governance, monitoring and validation processes which involved assessment of model performance; x The assessment and approval of the forward-looking macroeconomic assumptions and scenario weightings through challenge applied by the Group and Company’s internal governance processes; x Reconciliation of the data used in the ECL calculation process to gross balances recorded within the general ledger as well as source systems; x Customer credit rating (CCR), a key input into the SICR assumption for wholesale loans (non-retail loans). This covered elements such as: approval of new lending facilities against the Group and Company’s lending policies, monitoring of counterparty credit quality against the Group and Company’s exposure criteria for internal factors specific to the counterparty or external macroeconomic factors, and accuracy and timeliness of CCR and security indicator (SI) assessments against lending policies and regulatory requirements; x IT system controls which record retail loans lending arrears, group exposures into delinquency buckets, and re-calculate individual allowances. We tested automated calculation and change management controls and evaluated the Group and Company’s oversight of the portfolios, with a focus on controls over delinquency monitoring. We tested relevant General Information Technology Controls (GITCs) in relation to the key IT applications used by the Group and Company in measuring ECL allowances as detailed in the IT Systems and Controls Key Audit Matter below. In addition to controls testing, our procedures included: x Obtaining an understanding of the Group and Company’s processes to determine ECL allowances, evaluating the ECL model methodologies against established market practices and criteria in the accounting standards; x Reperforming a sample of credit assessments for wholesale loans controlled by the Group and Company’s workout and recovery team assessed as higher risk or impaired, and a sample of other loans, focusing on larger exposures assessed by the Group and Company as showing signs of deterioration, or in areas of emerging risk; x For each loan sampled, we challenged the Group and Company’s assessment of CCR and SI using the customer’s financial position, the valuation of security, and, where relevant, the risk of stranded assets, to inform our overall assessment of loan recoverability and the impact on the credit allowance. To do this, we used the information on the Group and Company’s loan file, portfolio and industry reviews, external rating and publications and, we enquired regarding the facts and circumstances of the case with the Relationship Manager; x Exercising our judgement, our procedures included using our understanding of relevant industries and the macroeconomic environment and comparing data and assumptions used by the Group and Company in recoverability assessments to externally sourced evidence, such as, external credit ratings, publicly available audited financial statements and comparable external valuations of collateral held. Where relevant, we assessed the forecast timing of future cash flows in the context of underlying valuations and approved business plans and challenged key assumptions in the valuations; x Working with our credit risk specialists, we assessed the accuracy of the Group and Company’s ECL model estimates by re-performing, for a sample of loans, the calculation of the ECL allowance using our independently derived calculation tools and comparing this to the amount recorded by the Group and Company; x Working with our economic specialists, we challenged the Group and Company’s forward-looking macroeconomic assumptions and scenarios incorporated in the Group and Company’s ECL models. We compared the Group and Company’s forecast GDP, unemployment rates, CPI and property price indices to relevant publicly available macroeconomic information, and considered other known variables and information obtained through our other audit procedures to identify contradictory indicators; x Testing the implementation of the Group and Company’s SICR methodology by re-performing the staging calculation for a sample of loans taking into consideration movements in the CCR from loan origination and comparing our result to actual staging applied on an individual account level in the Group and Company’s ECL model; x Assessing the accuracy of the data used in the ECL models by checking a sample of data fields, such as, account balance and CCR to relevant source systems; x Assessing the appropriateness of the Group and Company’s disclosures in the Financial Report, using our understanding obtained from our testing and against the requirements of the accounting standards. 211 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() Key Audit Matters (continued) We challenged key assumptions used by the Group and Company in their temporary adjustments. This included: x Assessing temporary adjustments against the Group and Company’s ECL model and data deficiencies identified in the Group and Company’s model validation processes, particularly in light of the significant volatility in economic scenarios; x Comparing underlying data used in concentration risk and economic cycle allowances to underlying loan portfolio characteristics of recent loss experience, current market conditions and specific risks in the Group and Company’s loan portfolios; x Assessing certain temporary adjustments identified by the Group and Company against internal and external information; x Assessing the completeness of temporary adjustments by checking the consistency of risks we identified in the loan portfolios against the Group and Company’s assessment. Subjective and complex valuation of financial instruments held at fair value: Group: x Fair value of level 3 asset positions $1,453m x Fair value of level 3 liability positions $15m x Fair value of level 2 asset positions $151,186m\* x Fair value of level 2 liability positions $99,882m\* Company: x Fair value of level 3 asset positions $1,447m x Fair value of level 3 liability positions $12m x Fair value of level 2 asset positions $148,475m\* x Fair value of level 2 liability positions $101,190m\* \*This KAM relates to our audit procedures for structured notes, derivatives (mainly cancellable swaps and FX options) and fair value adjustments (credit valuation adjustment and funding valuation adjustment) within the level 2 population, that are valued using more complex valuation models. Refer to Note 18 to the Group and Company Financial Reports. T The Key Audit Matter The fair value of the Group and Company’s Level 3 and certain Level 2 (Level 2) financial instruments is determined by the Group and Company’s application of valuation techniques which often involve the exercise of judgement and the use of assumptions and estimates. The valuation of Level 3 and Level 2 financial instruments held at fair value is a Key Audit Matter due to: x The high degree of estimation uncertainty and potentially significant range of reasonable outcomes associated with the valuation of financial instruments classified as Level 3 where significant pricing inputs used in the valuation methodology and models are not observable; x The complexity and subjectivity associated with the Group and Company’s valuation models for certain Level 2 derivatives and structured notes leading to an increase in estimation uncertainty. These factors increased the level of judgement applied by us and our audit effort thereon. In addressing this Key Audit Matter, we involved our valuation specialists to supplement our senior team members who understand the methods, assumptions and data relevant to the Group and Company’s valuation of financial instruments. H How the matter was addressed in our audit Our audit procedures in addressing this Key Audit Matter included: x Assessing the population of financial instruments held at fair value by the Group and Company to identify portfolios with a higher risk of misstatement arising from significant judgements over valuation either due to unobservable inputs or complex/subjective models; x Testing the design and operating effectiveness of key controls relating specifically to these financial instruments, including those in relation to: R independent price verification (IPV), including completeness of portfolios and valuation inputs subject to IPV; R model validation at inception and periodically, including assessment of model limitation and assumptions; R review, approval and challenge of daily profit and loss by a control function; R collateral management process, including review and approval of margin reconciliations with clearing houses; and R review and approval of fair value adjustments (FVAs), including exit price and portfolio level adjustments. x In relation to the subjective valuation of certain Level 2 and Level 3 financial instruments, with our valuation specialists: R Assessing the reasonableness of key inputs and assumptions using comparable data in the market and available alternatives; R Comparing the Group and Company’s valuation methodology to industry practice and the criteria in the accounting standards; and R Independently revaluing a selection of financial instruments and FVAs of the Group and Company. This involved sourcing independent inputs from comparable data in the market and available alternatives. We challenged and assessed differences against the Group and Company’s valuations. x Assessing the appropriateness of the Group and Company’s disclosures in the Financial Report using our understanding obtained from our testing and against the requirements of the accounting standards. 212 Independent auditor’s report (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report ![]() Key Audit Matters (continued) Carrying value of investments in PT Bank Pan Indonesia (PT Panin) ($1,415m) Refer to Note 26 to the Group Financial Report. T The Key Audit Matter The carrying value of the Group’s investment in PT Panin is a Key Audit Matter due to certain conditions increasing the possibility of this investment being impaired, plus the risk of inaccurate forecasts or a wider range of possible outcomes for us to consider, including: x the presence of impairment indicators resulting from the carrying value of the investment in PT Panin exceeding the Fair Value Less Costs of Disposal (FVLCOD) at times throughout the year; x historical volatility in the market price of the PT Panin shares; x impairment has been recognised in prior periods. The presence of these conditions necessitated increased judgement by us to assess the Group’s valuation methods and associated investment value determined by the Group. We involved our valuation specialists to supplement our senior team members in assessing this Key Audit Matter. H How the matter was addressed in our audit Working with our valuation specialists, our procedures included: x Evaluating the appropriateness of the recoverable amount methods applied by the Group against the requirements of the accounting standards; x Independently evaluating FVLCOD method and assessing the market liquidity of the share price at the reporting date, in light of the historical volatility in the market price; x Independently evaluating the valuation derived from the value in use method used by the Group. This included: R Assessing the integrity of the model used, including the accuracy of the underlying calculation formulas; R Assessing the Group’s key assumptions used in the model by comparing to external observable metrics, historical experience, our knowledge of the market and current market practice; R Independently developing a discount rate range considered comparable using publicly available market data for comparable entities, adjusted for factors specific to the investment and the market and industry it operates in; R Comparing the forecast earnings contained in the model to the approved PT Panin financial plan, released financial results and against available market data ; R Assessing the accuracy of previous forecasts to inform our evaluation of current forecasts incorporated in the model; R Considering the sensitivity of the models by varying key assumptions within a reasonable possible range. We did this to identify those assumptions at higher risk of bias or inconsistency in application and to focus our further procedures. x Assessing the Group’s disclosures in the Financial Report using our understanding obtained from our testing and against the requirements of the accounting standards. IT systems and controls The Key Audit Matter The Group’s businesses utilise many complex, interdependent Information Technology (IT) systems to process and record a high volume of transactions. The controls over access, changes to and operation of relevant IT systems are key to the recording of financial information and the preparation of a financial report which provides a true and fair view of the Group and Company’s financial position and performance. The IT systems and controls, as they impact the financial recording and reporting of the Group and Company’s transactions, is a Key Audit Matter as our audit approach could significantly differ depending on the effective operation of these Group and Company IT controls. We work with our IT specialists in this regard. H How the matter was addressed in our audit Our testing focused on the technology control environments for key IT applications (systems) used in processing significant financial transactions and recording balances in the general ledgers, and the automated controls embedded within these systems which link the technology-enabled business processes. Working with our IT specialists our audit procedures included: x Assessing the governance and higher-level controls across the relevant IT environments, including policy design, policy review and awareness, and IT Risk and cyber security management practices; x Testing the design and operating effectiveness of the Group and Company’s key controls with respect to: R user access management, including how users are on-boarded, monitored, and removed on a timely basis from key IT applications and infrastructure. We also tested controls for managing privileged roles and functions across relevant IT applications and the underlying infrastructure; R change management for systems relevant to financial reporting, including authorisation of changes prior to development, testing and approvals prior to migration into the production environment of key IT applications. We assessed appropriateness of users with access to release changes to IT application production environments against their job roles; R access to and monitoring of system batch job schedules. x Design and operating effectiveness testing of key automated business process controls including those relating to enforcing segregation of duties to avoid conflicts from inappropriate role combinations within IT applications. We tested key controls over: R System configurations to perform calculations and mappings of financial transactions, identification of transactions requiring approval and automated reconciliation controls (both between systems and intra-system); and R Data integrity of key system reporting used in our audit procedures and the Group and Company’s financial reporting. 213 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() Key Audit Matters (continued) Acquisition of Suncorp Bank Refer to Note 34 to the Group Financial Report. The Key Audit Matter On 31 July 2024, the Group acquired 100% of the shares in SBGH Limited, the immediate holding company of Suncorp Bank for a total cash consideration of $6.2bn. This transaction is a Key Audit Matter given the size of the acquisition and its impact to the Group’s financial statements. We focused our audit effort on the recoverability of the provisional goodwill recognised given the transaction was entered into two years prior to the settlement date. We involved our senior team members, including specialists, in assessing this Key Audit Matter. How the matter was addressed in our audit Our procedures included: x Evaluating the Group’s acquisition accounting approach against the criteria and requirements of the accounting standards; x Reading the underlying transaction agreements to understand the key terms of the Group’s acquisition, nature of the assets and liabilities acquired, and consideration paid; x Testing the provisional fair value of the loans and advances acquired and deposits and other borrowings assumed, amongst other balance sheet items acquired, to the underlying records of SBGH as at 31 July 2024 and their consideration of fair value amounts; x Assessing the consideration paid against the underlying transaction agreements and evidence of payments; x Together with our valuation specialists, we assessed the Group’s determination of the recoverability of provisional goodwill recognised. This included: R Understanding the Group’s provisional goodwill impairment assessment; R Challenging the key assumptions used by the Group. We did this using external observable metrics, historical experience, our knowledge of the industry and current market practice; R Evaluating the sensitivity of the model used by the Group by varying key assumptions within a reasonably possible range. x Recalculating the provisional goodwill recognised and comparing it to the amount recorded by the Group; x Assessing the appropriateness of the Group’s disclosures in the Financial Report using our understanding obtained from our testing and against the requirements of the accounting standards. Other information Other Information is financial and non-financial information in Australia and New Zealand Banking Group Limited’s annual report which is provided in addition to the Financial Reports and the Auditor’s Report. The Directors are responsible for the Other Information. Our opinions on the Financial Reports do not cover the Other Information and, accordingly, we do not express an audit opinion or any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion. In connection with our audits of the Financial Reports, our responsibility is to read the Other Information. In doing so, we consider whether the Other Information is materially inconsistent with the Financial Reports or our knowledge obtained in the audits, or otherwise appears to be materially misstated. We are required to report if we conclude that there is a material misstatement of this Other Information, and based on the work we have performed on the Other Information that we obtained prior to the date of this Auditor’s Report we have nothing to report. Responsibilities of the Directors for the Financial Reports The Directors are responsible for: x preparing the Financial Reports in accordance with the Corporations Act 2001, including giving a true and fair view of the financial position and performance of each of the Group and Company, and in compliance with Australian Accounting Standards and the Corporations Regulations 2001 x implementing necessary internal controls to enable the preparation of a Financial Reports in accordance with the Corporations Act 2001, including giving a true and fair view of the financial position and performance of each of the Group and Company, and that is free from material misstatement, whether due to fraud or error x assessing the Group and Company’s ability to continue as a going concern and whether the use of the going concern basis of accounting is appropriate. This includes disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless they either intend to liquidate the Group and the Company or to cease operations, or have no realistic alternative but to do so.  214 Independent auditor’s report (continued)Australia and New Zealand Banking Group Limited 2024 Annual Report ![]()  Auditor’s responsibilities for the audits of the Financial Reports Our objective is: x  to obtain reasonable assurance about whether each of the Financial Reports as a whole are free from material misstatement, whether due to fraud or error; and x  to issue an Auditor’s Report that includes our opinions. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the Financial Report. A further description of our responsibilities for the audits of the Financial Reports is located at the Auditing and Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1\_2020.pdf.This description forms part of our Auditor’s Report. These responsibilities also apply to our audits performed in accordance with international standards on auditing #### Report on the Remuneration Report  Opinion In our opinion, the Remuneration Report of Australia and New Zealand Banking Group Limited for the year ended 30 September 2024, complies with Section 300A of the Corporations Act 2001 and is prepared, in all material respects, in accordance with the accompanying basis of preparation to the Remuneration Report. Directors’ responsibilities The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with Section 300A of the Corporations Act 2001 and the accompanying basis of preparation to the Remuneration Report. Our responsibilities We have audited the Remuneration Report included in pages 34 to 75 of the Directors’ report for the year ended 30 September 2024. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. KPMG Maria Trinci Partner Melbourne 7 November 2024 215 Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ## Glossary AASsmeans Australian Accounting Standards. AASBmeans Australian Accounting Standards Board. The term ‘AASB’ is commonly used when identifying AASs issued by the AASB. In doing so, the term is used together with the AAS number. ADImeans Authorised Deposit-taking Institution as defined by APRA. ANZ Bank Groupmeans ANZ BH Pty Ltd and each of its subsidiaries, including ANZBGL and ANZ Bank New Zealand Limited. ANZ Bank New Zealandmeans ANZ Bank New Zealand Limited. ANZBGLmeans Australia and New Zealand Banking Group Limited. ANZBGL Groupmeans ANZBGL and each of its subsidiaries. ANZESTmeans ANZ Employee Share Trust. ANZ Groupmeans the ANZBGL Group or the ANZGHL Group as a whole (including all businesses), as the context requires. ANZGHLmeans ANZ Group Holdings Limited. ANZGHL Groupmeans ANZGHL and each of its subsidiaries, including ANZ BH Pty Ltd, ANZ Group Services Pty Ltd and ANZ NBH Pty Ltd. ANZ Non-Bank Groupmeans ANZ NBH Pty Ltd and each of its subsidiaries, including the Group’s beneficial interests in the 1835i trusts and non-controlling interests in the Worldline merchant acquiring joint venture, and ANZ Group Services Pty Ltd. ANZ Research – Economicsis a business unit within ANZ, which conducts analysis of key economic inputs and developments and assessment of the potential impacts on the local, regional and global economies. ANZ Sharemeans a fully paid ordinary share in the capital of ANZ. APRAmeans Australian Prudential Regulation Authority. APSmeans ADI Prudential Standard. ASXmeans Australian Securities Exchange. AT1means Additional Tier 1 capital. Basel Harmonisation ratios are the Group’s interpretation of Basel Calculation of RWA for credit risk regulations (effective 1 Jan 2023) documented in the Basel Framework and the ‘Australian Banking Association Basel 3.1 Capital Comparison Study’ (Mar 2023). This definitionis for measures from March 2023 onwards. BCBSmeansBasel Committee on Banking Supervision. Boardmeans ANZBGL Board of Directors. Cash and cash equivalentscomprise coins, notes, money at call, balances held with central banks, liquid settlement balances (readily convertible to known amounts of cash which are subject to insignificant risk of changes in value) and securities purchased under agreements to resell (reverse repurchase agreements) in less than three months. Cash profitis an additional measure of profit which is prepared on a basis other than in accordance with accounting standards. Cash profit represents the Group’s preferred measure of the result of the core business activities of the Group, enabling readers to assess Group and Divisional performance against prior periods and against peer institutions. To calculate cash profit, the Group excludes non- core items from statutory profit as noted below. These items are calculated consistently period on period so as not to discriminate between positive and negative adjustments. Gains and losses are adjusted where they are significant, or have the potential to be significant in any one period, and fall into one of three categories: 1. gains or losses included in earnings arising from changes in tax, legal or accounting legislation or other non-core items not associated with the core operations of the Group; 2. economic hedging impacts and similar accounting items that represent timing differences that will reverse through earnings in the future; and 3. accounting reclassifications between individual line items that do not impact reported results, such as credit risk on impaired derivatives. Cash profit is not a measure of cash flow or profit determined on a cash accounting basis. Collectively assessed allowance for expected credit loss represents the Expected Credit Loss (ECL), which incorporates forward-looking information and does not require anactual loss event to have occurred for a credit loss provision to be recognised. Committed Liquidity Facility (CLF)is a facility with the RBA that was established to offset the shortage of available High Quality Liquid Assets (HQLA) in Australia and provides an alternative form of contingent liquidity. The CLF is collateralised by assets, including internal residential mortgage-backed securities, that are eligible to be pledged as security with the RBA. The total amount of the CLF available to a qualifying ADI is set annually by APRA. In September 2021, APRA wrote to ADIs to advise that APRA and the RBA consider there to be sufficient HQLA for ADIs to meet their Liquidity Coverage Ratio (LCR) requirements, and therefore the use of the CLFshould no longer be required beyond 2022 calendar year. Covered bondsare bonds issued by an ADI to external investors secured against a pool of the ADI’s assets (the cover pool) assigned to a bankruptcy remote special purpose entity. The primary assets forming the cover pool are mortgage loans. The mortgages remain on the issuer’s balance sheet. The covered bond holders have dual recourse to the issuer and the cover pool assets. The mortgages included in the cover pool cannot be otherwise pledged or disposed of but may be repurchased and substituted in order to maintain the credit quality of the pool. The Group issues covered bonds as part of its funding activities. Credit riskis the risk of financial loss resulting from the failure of the Group’s customers and counterparties to honour or perform fully the terms of a loan or contract. Credit risk weighted assets (CRWA)represent assets which are weighted for credit risk according to a set formula as prescribed in APS 112/113. Customer depositsrepresent term deposits, other deposits bearing interest, deposits not bearing interest and borrowing corporations’ debt excluding securitisation deposits. Customer remediationincludes provisions for expected refunds to customers, remediation project costs and related customer and regulatory claims, penalties and litigation costs and outcomes. 216 Australia and New Zealand Banking Group Limited 2024 Annual Report ![]() Derivative credit valuation adjustment- Over the life of a derivative instrument, the Group uses a model to adjust fair value to take into account the impact of counterparty credit quality. The methodology calculates the present value of expected losses over the life of the financial instrument as a function of probability of default, loss given default, expected credit risk exposure at default and an asset correlation factor. Impaired derivatives are also subject to a CVA. Dividend payout ratiois the total ordinary dividend payment divided by profit attributable to shareholders of the Company. Fair valueis an amount at which an asset or liability could be exchanged between knowledgeable and willing parties in an arm’s length transaction. Funding for Lending Programme (FLP)refers to three-year funding announced by the RBNZ in November 2020 and offered to New Zealand banks, which aimed to lower the cost of borrowing for New Zealand businesses and households. Gross loans and advances (GLA)is made up of loans and advances, capitalised brokerage and other origination costs less unearned income. Groupmeans ANZ Group Holdings Limited and its subsidiaries. IFRSmeans International Financial Reporting Standards. Impaired assetsare those financial assets where doubt exists as to whether the full contractual amount will be received in a timely manner, or where concessional terms have been provided because of the financial difficulties of the customer. Individually assessed allowance for expected credit lossesis assessed on a case-by-case basis for all individually managed impaired assets taking into consideration factors such as the realisable value of security (or other credit mitigants), the likely return available upon liquidation or bankruptcy, legal uncertainties, estimated costs involved in recovery, the market price of the exposure in secondary markets and the amount and timing of expected receipts and recoveries. Interest rate risk in the banking book (IRRBB)relates to the potential adverse impact of changes in market interest rates on the Group’s future net interest income. The risk generally arises from: 1. Repricing and yield curve risk - the risk to earnings or market value as a result of changes in the overall level of interest rates and/or the relativity of these rates across the yield curve; 2. Basis risk - the risk to earnings or market value arising from volatility in the interest margin applicable to banking book items; and 3. Optionality risk - the risk to earnings or market value arising from the existence of stand-alone or embedded options in banking book items. Level 1in the context of APRA supervision, Australia and New Zealand Banking Group Limited consolidated with certain approved subsidiaries. Level 2in the context of APRA supervision, means consolidated ANZ Bank Group, excluding insurance and funds management entities, commercial non-financial entities and certain securitisation vehicles. Level 3 in the context of APRA supervision, means ANZ Group, the conglomerate group at the widest level. Net interest marginis net interest income as a percentage of average interest earning assets. Net loans and advancesrepresent gross loans and advances less allowance for expected credit losses. Net Stable Funding Ratio (NSFR)is the ratio of the amount of available stable funding (ASF) to the amount of required stable funding (RSF) defined by APRA. The amount of ASF is the portion of an ADI’s capital and liabilities expected to be a reliable source of funds over a one year time horizon. The amount of RSF is a function of the liquidity characteristics and residual maturities of an ADI’s assets and off-balance sheet activities. ADIs must maintain an NSFR of at least 100%. Net tangible assetsequal share capital and reserves attributable to shareholders of the Company less unamortised intangible assets (including goodwill and software). NZXmeans New Zealand’s Exchange. RBAmeans Reserve Bank of Australia, Australia’s central bank. RBNZmeans Reserve Bank of New Zealand, New Zealand’s central bank. Regulatory depositsare mandatory reserve deposits lodged with local central banks in accordance with statutory requirements. Restructuremeans the restructure of the ANZ Group, as part of the establishment of the non-operating holding company, implemented by the scheme of arrangement under the Corporations Act between ANZBGL and the shareholders. Return on average assetsis the profit attributable to shareholders of the Company, divided by average total assets. Return on average ordinary shareholders’ equityis the profit attributable to shareholders of the Company, divided by average ordinary shareholders’ equity. Risk weighted assets (RWA)are risk weighted according to each asset’s inherent potential for default and what the likely losses would be in the case of default. In the case of non-asset backed risks (i.e. market and operational risk), RWA is determined by multiplying the capital requirements for those risks by 12.5. Settlement balances owed to/by ANZrepresent financial assets and/or liabilities which are in the course of being settled. These may include trade dated assets and liabilities, vostro accounts and securities settlement accounts. Term Funding Facility (TFF)refers to three-year funding announced by the RBA on 19 March 2020 and offered to ADIs in order to support lending to Australian businesses at low cost. The TFF was closed to drawdowns on 30 June 2021. Term Lending Facility (TLF)refers to three to five-year funding offered by the RBNZ between May 2020 and July 2021 to promote lending to New Zealand businesses. Overview Operating environment Governance Performance overview Remuneration report Directors’ report Financial report ![]() Australia and New Zealand Banking Group Limited (ANZ) ABN 11 005 357 522 shareholder.anz.com ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() NA