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ANZ Global Markets Morgan Stanley Financials Forum Steve Bellotti Managing Director ANZ Global Markets and Loans AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED 12 September 2013
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Page 1: ANZ Global Markets...Foreign Exchange Rates 1Credit Commodities Equities 1 ANZ Global Markets Equities offering includes Equity Derivative sales and trading and Equity Capital Markets

ANZ Global Markets Morgan Stanley Financials Forum

Steve Bellotti

Managing Director ANZ Global Markets and Loans

AUSTRALIA AND NEW ZEALAND

BANKING GROUP LIMITED

12 September 2013

Page 2: ANZ Global Markets...Foreign Exchange Rates 1Credit Commodities Equities 1 ANZ Global Markets Equities offering includes Equity Derivative sales and trading and Equity Capital Markets

63% 37%

18%

34%

25%

23%

22%

10%

APEA Aus / NZ

Global Markets is integral to the ANZ super regional strategy and supporting growth in cross border flows

2

Global Markets is a significant contributor to ANZ’s performance

Solid income growth achieved through super regional strategy

• Expanded product range, in particular FX capabilities

• Expanded Asia footprint and increased connectivity across region

• Increased bench strength of Markets team

• Grown and diversified client base

• Enhanced risk systems framework

Global Markets

Global Loans

Other IIB

Transaction Banking

350 546

774

768

1310 1134

2008 2010 2012

$m

APEA

Aus / NZ

IIB

ANZ Group International & Institutional Banking (IIB)

Operating Income 1H13

Retail Corporate & Commercial

Banking Australia

New Zealand

IIB

Global Institutional

Global Wealth

Retail Commercial

& Agri

Retail Commercial

Banking

Global Markets

Global Markets plays an important role servicing clients across ANZ

CAGR ‘08-’12

Global Markets Operating Income

Significantly grown and diversified business by product, customer and geography

Other ANZ

1,118

1,856 1,908

APEA – Asia Pacific, Europe & America

Page 3: ANZ Global Markets...Foreign Exchange Rates 1Credit Commodities Equities 1 ANZ Global Markets Equities offering includes Equity Derivative sales and trading and Equity Capital Markets

Global Markets operates across ANZ’s regional network, with a clear client focus and strategy in each region

3

Asia & Pacific

Australia & New Zealand

Europe & America

168

302

485

2008 2010 2012

$m

A growing client base through Asia Pacific, Europe & America

Niche market focused on Investor clients

Offer access to Asian names via top tier regional credit platform with capability to

„originate and distribute‟ into Asia

Growth market serving a broad client base, competing against regional and global players

Corporate/Institutional: Multi-currency flow platform (FX, Rates, Credit) and Debt Capital Markets delivering liquidity and access to global capital markets Commercial: Preferred bank for clients with cross-border needs

Well established and leading markets business

Predominately FX and Rates delivered by an efficient cost-to-serve model to Institutional,

Corporate and Commercial clients

Europe & America

Asia & Pacific

Australia & New

Zealand

Global Markets APEA Sales Income

31% CAGR

Page 4: ANZ Global Markets...Foreign Exchange Rates 1Credit Commodities Equities 1 ANZ Global Markets Equities offering includes Equity Derivative sales and trading and Equity Capital Markets

ANZ has outperformed against more challenging global and regional trends

4

In Asia the FICC wallet has been relatively flat

The FICC global wallet has shrunk with Rates the hardest hit

Global FICC Revenue 2009-2012, US$b

Asian FICC Revenue 2009-12, US$b

79

46 41 47

30

24

12

22

14

13

14

13

14

7

9

9

137

90

76

91

2009 2010 2011 2012

G10 rates / other Credit G10 FX Commodities

17 15 15 15

9

7 7 7

3

3 2 2

29

25 24 24

2009 2010 2011 2012

FX/EM Commodities Rates Credit

-13% -6%

Source: Wholesale Banking Outlook, 2013, Oliver Wyman; „Day of Reckoning‟ McKinsey Quarterly, September 2011

Page 5: ANZ Global Markets...Foreign Exchange Rates 1Credit Commodities Equities 1 ANZ Global Markets Equities offering includes Equity Derivative sales and trading and Equity Capital Markets

ANZ Global Markets structure

5

Global Markets Products

Global Markets Functions

Client Franchise - providing liquidity, transactional and risk management solutions to ANZ clients

Relationship Sales Product Manufacture & Deal Structuring

Liquidity & Transaction Processing

Risk Management & Trading

Foreign Exchange

Rates Credit Commodities Equities1

1 ANZ Global Markets Equities offering includes Equity Derivative sales and trading and Equity Capital Markets

ANZ Global Markets

Non-Client Franchise

Manage the ANZ group

balance sheet.

Institutional

Large multinational and regional clients that

typically require solutions in multiple markets

Corporate & Commercial

Corporate and

Commercial clients located in Australia, New

Zealand and Asia

Financial Institutions / Investors

Real Money funds, Central

and Regional banks, Asia Wealth clients

Manage ANZ Group

Balance Sheet

Page 6: ANZ Global Markets...Foreign Exchange Rates 1Credit Commodities Equities 1 ANZ Global Markets Equities offering includes Equity Derivative sales and trading and Equity Capital Markets

Global Markets income is generated through three principal sources

Balance

Sheet 23%

Sales 52%

Trading 25%

The business model is built around supporting the needs of ANZ clients

6

• Direct client business on core products such as Fixed Income, Foreign Exchange, Commodities and Debt Capital Markets

• Focussed on increasing the mix of sales income through greater penetration and client acquisition

• Trading represents management of positions taken as part of direct client sales flow and strategic positions

• Trading in the rates and credit product, in line with balance sheet trading

• Management of interest rate risk for the loan and deposit books

• Management of the bank‟s liquidity position

Trading

Sales

Balance Sheet

ANZ Global Markets Income 1H13

Non-Client facing income

Total product/client

income

Page 7: ANZ Global Markets...Foreign Exchange Rates 1Credit Commodities Equities 1 ANZ Global Markets Equities offering includes Equity Derivative sales and trading and Equity Capital Markets

A suite of products core to the liquidity, transactional and risk management needs of clients across ANZ

7

• Foreign exchange risk management advice and products for clients

• Global market execution with 24-hour capability through trading hubs in Singapore, Hong Kong, London, Sydney and Wellington

• Onshore and offshore RMB trade and investment capabilities

• Interest rate risk hedging for clients

• Pricing and risk management of credit instruments

• Principal market execution, risk transfer, information sourcing, idea generation, product tailoring

• Origination and distribution of credit products

• Corporate and Financial Institutions sourced listed, unlisted bonds, syndicated loans & securitisation

• Management of the bank‟s liquidity portfolios and trading of position risk

• Commodity price risk advice and management

• Commodity derivatives (e.g. gold, soft commodities and energy)

• Products include: spots and forwards, swaps, options, collars and structured deals

• Offers products based on equity derivatives to our Private Bank, Wealth and Institutional Clients

• The offering addresses market access, portfolio hedging, capital preservation, income generation and asset allocation requirements

• Products range from vanilla equity options to structured notes

Rates

Foreign Exchange

Credit

Commodities

Equities

Page 8: ANZ Global Markets...Foreign Exchange Rates 1Credit Commodities Equities 1 ANZ Global Markets Equities offering includes Equity Derivative sales and trading and Equity Capital Markets

0

500

1,000

1,500

2,000

2,500

2008 2010 2012 2H12 1H13

APEA Aus/NZ

31% 29% 41% 41% 40%

68%

71% 59%

59% 60%

Achieved growth through a focused build out of capabilities and strong client acquisition

8

Global Markets Income by Type

Global Markets Income by Geography

Global Markets Income

Global Markets Income by Product

1,118

1,856 1,908

904 1,112

2008 2010 2012 2H12 1H13

0

500

1,000

1,500

2,000

2,500

2008 2010 2012 2H12 1H13

Sales Trading Balance Sheet

0

500

1,000

1,500

2,000

2,500

2008 2010 2012 2H12 1H13

FX Fixed Income Capital markets Other

22%

CAGR ‘08 - ‘12

10%

14% CAGR $m

$m

$m

$m

Page 9: ANZ Global Markets...Foreign Exchange Rates 1Credit Commodities Equities 1 ANZ Global Markets Equities offering includes Equity Derivative sales and trading and Equity Capital Markets

A strong risk framework underpins the Global Markets operating model and is central to our culture

9

An improved risk profile • A focus on servicing ANZ clients through an „originate to distribute‟ model

• Driven much greater diversification by income, product and geography within business

• People & culture

An entrenched, continuous Risk Culture Review process is in place

Risk management is a key criteria within executive objectives

• A clear execution framework in place which articulates what business we are prepared to do and not do – this is aligned to the performance plans and risk processes

• A strong focus on operational risk

Using scalable platforms and consistent processes

Digital capabilities allow greater standardisation of processes in addition to improving cost to serve

• The regulatory environment has evolved significantly over the past few years and we continue to monitor requirements closely and manage efficiently.

42

91

170

209

17 12 17 20

0

50

100

150

200

250

2010 2011 2012 1H13

Global Markets Sales & Trading (Traded)

Balance Sheet (Non-Traded)

Income/$ VAR

$m

1

1 Represents annualised 1H13 Income/$Var

Page 10: ANZ Global Markets...Foreign Exchange Rates 1Credit Commodities Equities 1 ANZ Global Markets Equities offering includes Equity Derivative sales and trading and Equity Capital Markets

• Expanded product range, in particular FX capabilities

• Expanded Asia footprint and increased connectivity across region

• Increased bench strength of Markets team

• Grown and diversified client base

• Enhanced risk systems framework

• Continue to grow and diversify client base

• Deepen penetration of existing client relationships and win greater share of wallet

• Build out Investor/FIG franchise

• Maintain strong risk management framework and culture

Global Markets is integral to ANZ’s super regional strategy and a key growth business

10

Achieved growth and diversification by product, client

and geography

Continued focus on growth and

diversification

Recognised as a leading markets

business

FX POLL

BEST FOR OVERALL FX SERVICES

2013

Voted by Financial Institutions

FX POLL

BEST FOR ASIAN TIMEZONE CLIENT SERVICE

2012 - 2013

F EUROMONEY

FX POLL

BEST FOR ASIAN CURRENCIES

2012

F EUROMONEY

APLMA SYNDICATED LOAN AWARDS

ASIA PACIFIC SYNDICATED LOAN HOUSE OF THE YEAR

2012

Page 11: ANZ Global Markets...Foreign Exchange Rates 1Credit Commodities Equities 1 ANZ Global Markets Equities offering includes Equity Derivative sales and trading and Equity Capital Markets

ANZ Global Markets Morgan Stanley Financials Forum

Steve Bellotti

Managing Director ANZ Global Markets and Loans

AUSTRALIA AND NEW ZEALAND

BANKING GROUP LIMITED

Appendix

Page 12: ANZ Global Markets...Foreign Exchange Rates 1Credit Commodities Equities 1 ANZ Global Markets Equities offering includes Equity Derivative sales and trading and Equity Capital Markets

Global Markets Leadership Team

12

Richard Kimber

GM & COO Global Markets & Loans

• Over 18 years experience managing a range of global businesses within Markets

• Previously held senior roles at Dresdner Kleinwort based in London for 6 years and in Asia for 9 years running the Dresdner Asia and FX business for Bankers‟ Trust

• International career with over 25 years experience

• Prior roles include Co Head of Macro Risk at Dresdner Kleinwort, Asia Pacific MD roles with Merrill Lynch and has run his own private equity and investment ventures in London

• Global career leading start up businesses, companies in growth phases and large organisations

• Former Global CEO of Friendster, Regional MD Google, CEO FirstDirect Bank UK, and senior international roles with HSBC and Macquarie Bank

• Over 25 years experience across all asset classes

• Transformed and led large capital markets operations for global banks

• Prior leadership roles with Merrill Lynch and Dresdner Kleinwort in London, New York, Sydney, Hong Kong and Singapore

Steve Bellotti

Managing Director Global Markets

Richard Huston

Co-head of Fixed Income, Currency, Commodities

Regional Head NEA, Europe & America

Eddie Listorti

Co-head of Fixed Income, Currency, Commodities

Regional Head SEA & Pacific

Global Loans

Page 13: ANZ Global Markets...Foreign Exchange Rates 1Credit Commodities Equities 1 ANZ Global Markets Equities offering includes Equity Derivative sales and trading and Equity Capital Markets

The material in this presentation is general background information about the Bank‟s activities current at the date of the presentation. It is information given in summary form and does not purport to be complete. It is not intended to 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

This presentation may contain forward-looking statements including statements regarding our intent, belief or current expectations with respect to ANZ‟s business and operations, market conditions, results of operations and financial condition, capital adequacy, specific provisions and risk management practices. When used in this presentation, the words “estimate”, “project”, “intend”, “anticipate”, “believe”, “expect”, “should” and similar expressions, as they relate to ANZ and its management, are intended to identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Such statements constitute “forward-looking statements” for the purposes of the United States Private Securities Litigation Reform Act of 1995. ANZ does not undertake any obligation to publicly release the result of any revisions to these forward-looking statements to reflect events or circumstances after the date hereof to reflect the occurrence of unanticipated events.

For further information visit

www.anz.com

or contact

Jill Craig Group General Manager Investor Relations

ph: (613) 8654 7749 fax: (613) 8654 9977 e-mail: [email protected]


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