ANZ - 2021 Annual Review

Performance overview OUR PERFORMANCE (continued) GROUP PERFORMANCE The results of the Group’s operations and financial position are set out on pages 56-71. Page 11 outlines the Group’s strategy and pages 10-28 describe in further detail the Group’s prospects in terms of future financial position and performance. Discussion of our approach to risk management, including a summary of our key material risks, is outlined on pages 51-55. CORONAVIRUS (COVID-19) The COVID-19 pandemic continues to cause major disruptions to community health and economic activities with wide-ranging impacts across many business sectors in Australia, New Zealand and globally. During the 2021 financial year, the spread of the Delta variant resulted in new and extended lockdowns in Sydney, Melbourne and Auckland. The Group continues to offer support to our customers to counteract the impact of COVID-19, however loan deferrals at 30 September 2021 were less significant than the previous financial year. Facilities which transitioned to interest-only or took up term extensions offered as a result of COVID-19, are now subsumed within the normal loan population and are managed accordingly. The ramifications of COVID-19 remain uncertain and it is difficult to predict the ongoing impact or duration of the pandemic and relaxation of restrictions. In preparing the financial statements, we made various accounting estimates for future events based on forecasts of economic conditions which reflect expectations and assumptions as at 30 September 2021 that we believe are reasonable under the circumstances. While pervasive across the financial statements, the estimation uncertainty is predominantly related to expected credit losses (ECL) where we recognised a credit impairment release of $567 million pre-tax in the 2021 financial year (2020: $2,738 million charge). The credit impairment release in the current period was primarily driven by the release of allowance for collectively assessed ECL largely reflecting the impact of an improved economic outlook relative to the outlook at 30 September 2020, together with improvements in portfolio mix. GROUP PROFIT RESULTS 2021 2020 Statutory Cash Statutory Cash Income Statement $m $m $m $m Net interest income 14,161 14,161 14,049 14,049 Other operating income 3,259 3,286 3,588 3,703 Operating income 17,420 17,447 17,637 17,752 Operating expenses (9,051) (9,051) (9,383) (9,383) Profit before credit impairment and income tax 8,369 8,396 8,254 8,369 Credit impairment (charge)/release 567 567 (2,738) (2,738) Profit before income tax 8,936 8,963 5,516 5,631 Income tax expense (2,756) (2,764) (1,840) (1,872) Non-controlling interests (1) (1) (1) (1) Profit after tax from continuing operations 6,179 6,198 3,675 3,758 Profit/(Loss) after tax from discontinued operations (17) (17) (98) (98) Profit for the year 6,162 6,181 3,577 3,660 Statutory profit after tax for the year ended 30 September 2021 increased 72% on the prior year to $6,162 million. Statutory return on equity is 9.9% and statutory earnings per share is 217.1 cents, an increase of 72% on prior year. 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 57 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 2021 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. DISCONTINUED OPERATIONS We completed the sale of our aligned dealer groups business and our OnePath pensions and investment business to IOOF Holdings Limited, and our life insurance business to Zurich Financial Services Australia across the 2020 and 2019 financial years. The financial results of these businesses are treated as discontinued operations from a financial reporting perspective. The financial results after transaction completion primarily relate to residual operational costs on separation and part recovery based on the respective Transition Service Agreements. There were no material financial impacts from the discontinued operations in the 2021 or 2020 financial years. ti GROU r s lts of th r ’s operations a fi i l siti re set out on pages 56-71. Page 11 outlines the Group’s str t y es - s ri i f rt r t il t r ’s r s ts i t r s f f t r fi i l sition an erformance. Discussion of r r t risk t, i l i s ry f r k y t ri l risks, is tli s - . I ( I - ) I - i ti s t s j r isr ti s t ity lt i ti iti s it i -r i impacts r ss any business sectors in Australia, l l lly. ri t fi i l y r, t s r f t lt ri t r s lt i xt l ck s i y y, l r kl . r ti s t ff r s rt t r st ers to counteract the impact of COVID-1 , r l f rr ls t t er 2021 r l ss si ifi t t t r i s fi i l y r. iliti s i tr siti t i t r st- ly r t k t r xt si s ff r s r s lt f I - , r s s it i t r l l l ti d r cordingly. r ifi ti s f I - r i rt i it is iffi lt t r i t i i t r r ti f t ic and relaxatio f r stri ti s. I r ri t fi i l st t ts, ri s ti sti t s f r f t r ts s f r asts f i iti s i r fl t xpe t ti s and assumptions as at 30 September t t elieve are reasonable under the circumstances. il r si r ss t fi i l stat ts, t sti ti rt i ty is red i antly related to expected credit losses (ECL) where we r is r it i ir t r l s f illi -t x i t fi i l y r ( : , illi h r ). r it i ir t r l s i t rr t ri s ri rily ri y t r l s f ll f r ll ti ly ss ss L largely reflecting the impact of an i r i tl k r l ti t t tl k t t r , t t r it i r ts i rtf li ix. GRO IT R t t t r s t t t r Cash I t t t t i t r st i , , , , t r r ti i , , , , r ti i , , , , r ti x s s ( , ) ( , ) ( , ) ( , ) r fit f r r it i ir t i t x , , , , r it i ir t ( r )/r l s ( , ) ( , ) r fit f r i t x , , , , I t x x s ( , ) ( , ) ( , ) ( , ) - tr lli i t r sts ( ) ( ) ( ) ( ) r fit ft r t fr ti i r ti s , , , , r fit/( ss) ft r t x fr is ti r ti s ( ) ( ) ( ) ( ) r fit f r t r , , , , t t t ry r fit ft r t x for the year ended 30 September 2021 increased 72% on the prior year to $6,162 million. Statutory return on equity is . st t t ry r i s r s r is . ts, i r s f ri r y r. r s s sh r fit, -I s r , t ss ss t rf r f its si ss ti iti s. It is i stry- i s r i l s ris it r r r . l ulate cas r fit y adjusting statutory profit for non-core items. In general, it represents the fi i l performance of our core busi ss ti iti s. We us c s rofit i ternally t t targets i ti is r ni r x ti s and l rs t r r r r ti l s. f r t f r j st ts tween statutory and cash profit. The adjustments made in rri ing at cash profit are included in statutory profit which is subject to audit within the context of the external auditor’s audit of the 2021 i i l rt. sh pr fit is t su j t t audit by t xt r l itor. O r external auditor has informed the Audit Committee that adjustments between st t t ry ash profit have been t r i sist t sis r ss f t ri s r s t . I I I compl te t s l f r li l r r s si ss our OnePath pensions and investment business to IOOF Holdings Limited, r lif i s r si ss t ri i i l r i s str li r ss t fi i l y rs. fi i l r s lts of thes si ss s are treated as is ti eratio s fr fi ncial reporti perspe ti . fi i l r s lts ft r tr s ti letion ri arily r l t to r sidu l r ti l sts s par ti rt r ry b s t respectiv ransition Ser i r ts. r r t ri l fi i l i ts fr t is ti r ti s i t r fi i l y rs. OUR PERFORMANCE (continued) GROUP PERFORMANCE The results of the Group’s operations and financial position are set out on pages 56-71. Page 11 outlines the Group’s strategy and pages 10-28 describe in further detail the Group’s prospects in terms of future financial position and performance. Discussion of our approach to risk management, including a summary of our key material risks, is outlined on pages 51-55. CORONAVIRUS (COVID-19) The COVID-19 pandemic continues to cause major disruptions to community health and economic activities with wide-ranging impacts across many business sectors in Australia, New Zealand and globally. During the 2021 financial year, the spread of the Delta variant resulted in new and extended lockdowns in Sydney, Melbourne and Auckland. The Group continues to offer support to our customers to counteract the impact of COVID-19, however loan deferrals at 30 September 2021 were less significant than the previous financial year. Facilities which transitioned to interest-only or took up term extensions offered as a result of COVID-19, are now subsumed within the normal loan population and are managed accordingly. The ramifications of COVID-19 remain uncertain and it is difficult to predict the ongoing impact or duration of the pandemic and relaxation of restrictions. In preparing the financial statements, we made various accounting estimates for future events based on forecasts of economic conditions which reflect expectations and assumptions as at 30 September 2021 that we believe are reasonable under the circumstances. While pervasive across the financial statements, the estimation uncertainty is predominantly related to expected credit losses (ECL) where we recognised a credit impairment release of $567 million pre-tax in the 2021 financial year (2020: $2,738 million charge). The credit impairment release in the current period was primarily driven by the release of allowance for collectively assessed ECL largely reflecting the impact of an improved economic outlook relative to the outlook at 30 September 2020, together with improvements in portfolio mix. GROUP PROFIT RESULTS 2021 2020 Statutory Cash Statutory Cash Income Statement $m $m $m $m Net interest income 14,161 14,161 14,049 14,049 Other operating income 3,259 3,286 3,588 3,703 Operating income 17,420 17,447 17,637 17,752 Operating expenses (9,051) (9,051) (9,383) (9,383) Profit before credit impairment and income tax 8,369 8,396 8,254 8,369 Credit impairment (charge)/release 567 567 (2,738) (2,738) Profit before income tax 8,936 8,963 5,516 5,631 Income tax expense (2,756) (2,764) (1,840) (1,872) Non-controlling interests (1) (1) (1) (1) Profit after tax from continuing operations 6,179 6,198 3,675 3,758 Profit/(Loss) after tax from discontinued operations (17) (17) (98) (98) Profit for the year 6,162 6,181 3,577 3,660 Statutory profit after tax for the year ended 30 September 2021 increased 72% on the prior year to $6,162 million. Statutory return on equity is 9.9% and statutory earnings per share is 217.1 cents, an increase of 72% on prior year. 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 57 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 2021 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. DISCONTINUED OPERATIONS We completed the sale of our aligned dealer groups business and our OnePath pensions and investment business to IOOF Holdings Limited, and our life insurance business to Zurich Financial Services Australia across the 2020 and 2019 financial years. The financial results of these businesses are treated as discontinued operations from a financial reporting perspective. The financial results after transaction completion primarily relate to residual operational costs on separation and part recovery based on the respective Transition Service Agreements. There were no material financial impacts from the discontinued operations in the 2021 or 2020 financial years. OUR PERFORMANCE (continued) GROUP PERFORMANCE The results of the Group’s operations and financial position are set out on pages 56-71. Page 11 outlines the Group’s strategy and pages 10-28 describe in further detail the Group’s prospects in terms of fut re financial position and performance. Discussion of our pproach to risk manag ment, including a summary of ur key ma ial risks, is outlined on pages 51-55. CORONAVIRUS (COVID-19) The COVID-19 pandemic continues to cause major disruptions to community health and economic activities with wide-ranging impacts across many busi ess sect rs i Aus rali , N w Zealand and globally. During the 2021 financial year, the spread of the Delta variant resulted in new and extended lockdowns in Sydney, Melbourne and Auckland. The Group continues to off r support to our customers to counteract the impact of COVID-19, however loan eferrals at 30 S ptember 2021 were less significant than the previ us financial year. Facilities which transitioned to interest-only or took up term extensions offered as a result of COVID-19, are now subsumed within the normal loan population and are managed accordi gly. The ramifications of COVID-19 remain uncertain and it is difficult to predict the ongoing impact or duration of the pandemic and relaxation of restrictions. In preparing the financial statements, we ma e various accoun ing estimates for futu e events based on for casts of economic conditi s which reflect expect tions and assumptions s at 30 September 2021 that we believe are reasonabl under the circumsta ces. While pervasive across the financial statements, the estimation uncertainty is predominantly related to expected credit losses (ECL) where we recognised a credit impairment release of $567 million pre-tax in th 2021 f nancial year (2020: $2,738 million charg ). The credit impairment lease in the current period was primarily driven by the le se of allowance for coll ctively assessed ECL largely eflecting the impact of a improved economic outlook relative to the outlook at 30 September 2020, together wi h improvements in portfolio mix. GROUP PROFIT RESULTS 2021 2020 Statutory Cash Statutory Cash Income Statement $m $m $m $m Net interest income 14,161 14,161 14,049 14,049 Other operating income 3,259 3,286 3,588 3,703 perating income 17,420 17,447 17,637 17,752 r ti expenses (9,051) (9,051) (9,383) (9,383) Profit befor cr dit impairment and income tax 8,369 8,396 8,254 8, 69 Credit impairment (charge)/rele se 5 7 567 (2,738) (2,738) Profit before income tax 8,936 8,9 3 5,516 5,631 Income tax xpense (2,75 ) (2,764) (1,840) (1,872) Non-controlling i t rests (1) (1) (1) (1) Pr fit after tax from continuing operations 6,179 6,198 3,675 3,758 r fit/(Loss) after tax fr m discontinued perations (17) (17) (98) (98) r fit for the year 6,162 6,181 3,577 3,660 Statutory profit after tax for the year ended 30 September 2021 increased 72% on the prior year to $6,162 million. Statutory return on equity is 9.9% and statutory earnings p r shar is 217.1 cents, an increase of 72% on prior year. 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 cas profit by djusting tatutory prof t for non-core items. In general, it represents the fi ancial performance of our cor business activities. We use cash profit inter ally to set targets and incentivise our Senior Executives and leaders through our remuneration pla s. Refer to page 57 for djustments between tatutory and cash profit. The adjustments made in arriving at cash profit are i cluded in statutory profit which is subject to audit withi the context of the external auditor’s audit of the 2021 Financial Report. Cash profit is not subject to audit by the external auditor. Our external auditor has informed the Audit Committee that adjustments between statuto y and cash profit have been determined on a c nsistent basis across each of the periods presented. DISCONTINUED OPERATIONS We completed the sale of our aligned dealer groups business and our OnePath pensions and investment business to IOOF Holdings Limited, and ur lif insurance business to Zurich Financial Services Australia across the 2020 and 2019 financial years. The financial results of these businesses are treated as discontinued oper tions from a financi l reporting perspective. The financial results aft r tra saction completion primarily relate to residual opera ional c sts on separation and part recovery based on the respective T ansi ion Service Agreements. There were no material financi l impac s from the discontinued operations in the 2021 or 2020 financial years. N E (c ti ed) P T e res lts f t e r ’s erati s a fi a cial siti are set t a es 56-71. Pa e 11 tli es t e r ’s strate y a pages 10-28 describe in further detail the Gr ’s r s ects i ter s of fut re financial position and performance. Disc ssion f r a r ach t risk a a e e t, i cl i a s ary f r key aterial risks, is tli e a es 51-55. CORONAVIRUS (COVID-19) T e VI -19 a e ic c ti es t ca se aj r isr ti s t c ity ealt a ec ic activities with wide-ranging impacts across many business sectors in Australia, New Zealand and globally. ri t e 2021 fi a cial year, t e s rea of the Delta variant resulte i e a exte e l ck s in Sydney, Melbourne a ckla . T e r c ti es t ffer s rt t r c st ers t c teract t e i act f VI -19, h ever l a eferrals at 30 Se te er 2021 ere less si ifica t t a t e revi s fi a cial year. Facilities which transitioned to interest- ly r t k ter exte si s ffere as a result of COVID-19, are now subsumed within the normal loan population and are managed accordingly. The ramifications of COVID-19 remain uncertain and it is difficult to pre ict the ongoing i act r urati f t e a e ic a relaxati f restricti s. I re ari t e fi a cial statements, we made various accounting estimates f r f t re eve ts ase f recasts of economic c iti s ic reflect ex ectati s a ass ti s as at 30 Se te er 2021 t at e elieve are reas a le er t e circ sta ces. While pervasive across the fi ancial state e ts, t e esti ati certai ty is pred mi antly relate t ex ecte cre it l sses (E L) ere e rec gnised a credit impairment release f $567 illi re-tax i t e 2021 fi ancial year (2020: $2,738 million charg ). The credit impairment release in the current period was primarily driven by the release of allowance for collectively assesse E L lar ely reflecti t e i act f a i r ve ec ic tl k relative t t e tl k at 30 Se te er 2020, t et er it i r ve e ts in portfolio mix. OUP PROFIT RESULTS 2 21 2020 Statutory as Stat t ry Cash Income State e t $m et i terest income 14,161 14,161 14,049 14,049 t er rati i c e , , 3,588 3 703 erati i c e , , 17 637 17, 52 erati ex e ses ( , ) ( , ) (9,383) (9,383) Pr fit ef re cre it i air e t a i c e tax , , 8,254 8,369 re it i air e t (c ar e)/release 67 (2,738) (2,738) Pr fit ef re i c e t x , , 5,516 5 6 1 I c e tax ex e se ( , ) ( , ) (1,840) (1,872) -c tr lli i terests ( ) ( ) (1) (1) r fit after tax fr c ti i erations 6,179 6,198 3,675 3,758 Pr fit/(L ss) fter tax fr isc ti e erati s ( ) ( ) (98) (9 ) r fit for the y ar 6,162 6,181 3,577 3,660 Stat t ry r fit after tax for the year ended 30 September 2021 increased 72% on the prior year to $6,162 million. Statutory return on equity is 9.9% and stat t ry ear i gs p r shar is 217.1 c nts, an increase of 72% on prior year. The Group uses cash profit, a non-IFRS measure, to assess the performa ce of its business activities. It is an industry-wide measure which enables comparison with our peer group. We calculate cash profit by adjusting statutory r fit f r -c re ite s. I e eral, it re rese ts t e fi a cial erf r a ce of our core business activities. We use cas r fit inter ally to set targets and incentivis our Senior Executives and leaders through our remuneration plans. Refer to page 57 for adjustments between statutory a cas r fit. T e a j st e ts a e i arriving at cas r fit are i cl e i stat t ry r fit ic is s ject t a it ithi the c ntext of the external auditor’s audit of th 2021 Financial Report. Cash profit is not s ject t a it by the external auditor. Our exter al 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. DISCONTINUED OPERATIONS e c lete t e sale f r ali e ealer r s si ess a r ePat e si s a i vestment business to IOOF Holdings Limited, and our life insurance business to Zurich Financial Services Australia across the 2020 and 2019 financial years. The financial results of these businesses are treated as discontinued operations from a financial reportin ers ective. T e fi a cial res lts after tra sacti c mpletio ri arily relate to residual erati al c sts on se arati n a d p rt rec very based t e res ective Tra siti Service ree e ts. There were no material financial impacts from the discontinued operations in the 2021 or 2020 financial years. 56 OVERVIEW HOW WE CREATE VALUE PERFORMANCE OVERVIEW REMUNERATION OVERVIEW SHAREHOLDER INFORMATION

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