ANZ - 2021 Annual Review

BECOMING A FAIRER AND MORE RESPONSIBLE BANK Our response to the Royal Commission We continue to act in response to the ‘spirit and letter’ of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (the Royal Commission). We provide public updates on our progress to implement the Royal Commission recommendations to the House of Representatives Standing Committee on Economics. Our most recent update (as at 9 September 2021) is available at . • 41 of the Royal Commission’s 76 recommendations are assessed as directly applicable to ANZ. Of these, we have completed actions relevant to 11 recommendations, including the four directed at banks for direct implementation. Work relevant to 13 recommendations is underway. The remaining 17 recommendations require actions by government, regulators or the ABA before we take any further steps. • We also made 16 commitments in February 2019, taking action to respond to a number of Commissioner Hayne’s recommendations and comments. These commitments were made to improve the treatment of retail customers, small businesses and farmers in Australia. – We have completed 12 of our 16 commitments. This year we completed the requirements of the Financial Sector Reform Act 2021 in relation to ongoing fee arrangements (commitment 16). – Of the four remaining commitments, three are dependent on reforms to the Banking Executive Accountability Regime that will be effected through the Financial Accountability Regime, and one relates to our ongoing work on culture. Many of the recommendations in the Royal Commission’s final report require legislative change. We continue to engage constructively with government, regulators and industry as they respond to these. Our APRA Risk Governance Self-Assessment Plan Our Risk Governance Oversight Committee (formerly the Royal Commission and Self-Assessment Oversight Group) monitors progress with our Risk Governance Self-Assessment (RGSA) Plan. The Committee is chaired by our Chief Risk Officer and provides regular progress updates to the Executive Committee and the Board. We have made significant progress across the five focus areas in our RGSA Plan: Culture; Governance and Accountability; Management of Operational Risk; Remediation; and Simplification. For example, we have: • Built a strong, purpose-led culture (see page 29) • Ensured accountabilities are clear and applied consequences where there are failings, in line with our strengthened Accountability and Consequence Framework (introduced in 2019) • Matured our approach to risk culture and risk management (see page 29) • Remediated customer accounts (see below) • Simplified our business, products and processes Our RGSA Plan is well progressed, with clear accountability for and commitment to the remaining actions. It is important to us that all of these actions deliver better outcomes for our customers, our shareholders and the community, and the changes we have made will endure. Customer remediation As discussed above, we are working hard to rebuild trust by identifying our mistakes, fixing them and providing fair, consistent and timely remediation to our customers when we fail to get it right. Across the Group we have close to 830 people focused on the execution of customer remediation1, both within and outside dedicated remediation teams. Since its inception in 2018, our Australian Retail and Commercial Responsible Banking team has increased the number of resources committed to remediating our customers from around 150 to around 390. In addition, 187 people throughout the Australia Retail and Commercial business are also focused on customer remediation activity. 1. In addition, there are ~385 staff working on APRA remediation plans and ~504 staff working on other remediation related initiatives in Australia Retail and Commercial (as at September 2021). LINKS TO 2021 GROUP PERFORMANCE FRAMEWORK We have continued to demonstrate our commitment to improve the financial wellbeing of our customers. Sound progress has been made to deliver great outcomes across key segments, however after a strong first half, we experienced material challenges processing home loan application volumes in Australia. This has resulted in our customers experiencing longer than expected wait times for loan approval decisions and increased volumes in our assessment backlog. While we were able to tactically manage and improve the situation, strengthening our policy and processes in this area remains a high priority focus. See section 4.5.3 of the Remuneration Report for more details. OVERVIEW HOW WE CREATE VALUE PERFORMANCE OVERVIEW REMUNERATION OVERVIEW SHAREHOLDER INFORMATION 24