# 2025 Basel III Pillar 3 Disclosure
As at 30 September 2025
APS 330: Public Disclosure
---
# Important notice
This document has been prepared by ANZ BH Pty Ltd as the head of ANZ’s Level 2 Banking Group (ANZ) to meet its disclosure obligations under the Australian Prudential Regulation Authority (APRA) ADI Prudential Standard (APS) 330 Public Disclosure.
---
# Table of Contents$^{1}$
* Introduction 6
* DIS20: Overview of risk management, key prudential metrics and RWA 8
* KM1: Key metrics (at consolidated group level) 8
* Key metrics - Suncorp Bank 9
* OVA: Bank risk management approach 10
* OV1: Overview of RWA 17
* Overview of EAD and RWA 19
* DIS21: Comparison of modelled and standardised RWA 21
* CMS1: Comparison of modelled and standardised RWA at risk level 21
* CMS2: Comparison of modelled and standardised RWA for credit risk at asset class level 23
* DIS25: Composition of capital 24
* CCA: Main features of regulatory capital instruments 25
* CC1: Composition of regulatory capital 26
* CC2: Reconciliation of regulatory capital to balance sheet 29
* DIS30: Links between financial statements and regulatory exposures 31
* LIA: Explanations of differences between accounting and regulatory exposure amounts 31
* LI1: Differences between accounting and regulatory scopes of consolidation and mapping of financial statement categories with regulatory risk categories 32
* LI2: Main sources of differences between regulatory exposure amounts and carrying values in financial statements 34
* DIS31: Asset encumbrance 35
* ENC: Asset encumbrance 35
* DIS40: Credit risk 36
* CRA: General qualitative information about credit risk 36
* CR1: Credit quality of assets 39
* CR2: Changes in stock of non-performing loans and debt securities 40
* CRB: Additional disclosure related to the credit quality of assets 41
* CRC: Qualitative disclosure related to credit risk mitigation techniques 46
* CR3: Credit risk mitigation techniques – overview 47
* CRD: Qualitative disclosure on banks’ use of external credit ratings under the standardised approach for credit risk 48
* CR4: Standardised approach – credit risk exposure and credit risk mitigation (CRM) effects 49
* CR5: Standardised approach – exposures by asset classes and risk weights 51
* CRE: Qualitative disclosure related to IRB models 54
* CR6: IRB – Credit risk exposures by portfolio and PD range 57
* CR7: IRB – Effect on RWA of credit derivatives used as CRM techniques 65
* CR8: RWA flow statements of credit risk exposures under IRB 65
* CR9: IRB – Back testing of probability of default (PD) per portfolio 66
* CR10: IRB (specialised lending under the slotting approach, other than HVCRE) 70
* DIS42: Counterparty credit risk 71
* CCRA: Qualitative disclosure related to CCR 71
* CCR1: Analysis of CCR exposures by approach 73
* CCR3: Standardised approach – CCR exposures by regulatory portfolio and risk weights 74
* CCR4: IRB – CCR exposures by portfolio and PD scale 75
* CCR5: Composition of collateral for CCR exposure 79
* CCR6: Credit derivatives exposures 81
* CCR8: Exposures to central counterparties 82
* DIS43: Securitisation 83
* SECA: Qualitative disclosure requirements related to securitisation exposures 83
* SEC1: Securitisation exposures in the banking book 85
* SEC2: Securitisation exposures in the trading book 85
* SEC3: Securitisation exposures in the banking book and associated regulatory capital requirements – bank acting as originator or as sponsor 86
* SEC4: Securitisation exposures in the banking book and associated capital requirements – bank acting as investor 88
* DIS50: Market risk 90
* Table 1: Market risk – disclosures for ADIs using the standard method 93
* Table 2: Market risk – disclosures for ADIs using the internal models approach (IMA) for trading portfolios 93
* DIS51: Credit valuation adjustment risk 95
* CVAA: General qualitative disclosure requirements related to CVA 95
* CVAB: Qualitative disclosures for banks using the SA-CVA 95
* DIS60: Operational risk 96
* ORA: General qualitative information on a bank’s operational risk framework 96
* OR1: Historical losses 98
* OR2: Business indicator and subcomponent 99
* OR3: Minimum required operational risk capital 100
* DIS70: Interest rate risk in the banking book 101
* IRRBBA: IRRBB risk management objectives and policies 101
* IRRBB1: Quantitative information on IRRBB 102
* DIS75: Macroprudential supervisory measures 103
* CCyB1: Geographical distribution of credit exposures used in the calculation of the bank-specific countercyclical capital buffer requirement 103
* DIS80: Leverage ratio 105
* LR1: Summary comparison of accounting assets vs leverage ratio exposure measure 105
* LR2: Leverage ratio common disclosure template 106
* DIS85: Liquidity 107
* LIQ1: Liquidity coverage ratio (LCR) 109
* LIQ2: Net stable funding ratio (NSFR) 111
* Governance and accountable person attestation 113
* Public disclosure of prudential information policy 113
* Accountable person attestation 114
* Appendix 1: Modification details 115
* Appendix 2: Entities excluded from regulatory consolidation 118
* Glossary 119
* Important information- forward-looking statements 121
$^1$ Each table reference adopted in this document aligns to those required by APS 330, as defined by the Basel Committee on Banking Supervision (BCBS) and adjusted by APRA for the Australian context.
---
# Introduction
### Purpose of this document
This document has been prepared in accordance with the Australian Prudential Regulation Authority (APRA) Prudential Standard (APS) 330: Public Disclosure.
APS 330 Public Disclosure Prudential Standard (APS 330) requires locally-incorporated authorised deposit-taking institutions (ADIs) to meet minimum requirements for the public disclosure of key information on their capital and risk exposures and, where applicable, leverage ratio, liquidity coverage ratio, net stable funding ratio and indicators for the identification of potential global systemically important banks, so as to contribute to the transparency of financial markets and to enhance market discipline.
This document is prepared for ANZ BH Pty Ltd (ANZ Bank HoldCo) in accordance with ANZ Board policy and the APS 330 reporting standard requirements. It presents information on Capital Adequacy and Risk Weighted Assets (RWA) calculations for credit risk, securitisation, traded market risk, interest rate risk in the banking book and operational risk.
Australia and New Zealand Banking Group Limited (ANZBGL) is an authorised deposit-taking institution (ADI) and a wholly owned subsidiary of ANZ Bank Holdco. The ultimate parent entity is ANZ Group Holdings Limited (ANZGHL). ANZGHL and its subsidiaries are collectively referred to as the ANZGHL Group.
The APS 330 disclosure has been prepared on the Level 2 basis being ANZ Bank HoldCo as the head of ANZ’s Level 2 Banking Group.
Any reference to ANZ / the Group refers to ANZ’s Level 2 Banking Group.
### Capital Adequacy Requirements
ANZ operates under capital adequacy requirements applying to Australian incorporated registered banks, which are set out in APRA’s Banking Prudential Standard documents. The capital adequacy requirements were updated from 1 January 2023 and included changes to APS 110 Capital Adequacy (APS 110), APS 112 Capital Adequacy: Standardised Approach to Credit Risk (APS 112) and APS 113 Capital Adequacy: Internal Ratings-based Approach to Credit Risk (APS 113) with key features of the changes including:
* improving the flexibility of the capital framework, through larger capital buffers that can be used by banks to support lending during periods of stress;
* changes to risk weighted assets (RWA) through more risk-sensitive risk weights increasing capital requirements for higher risk lending and decreasing it for lower risks;
* changes to loss given default rates (LGD) including approved use of an internal ratings-based (IRB) approved LGD model for mortgage portfolios;
* an increase in the IRB scaling factor (from 1.06x to 1.1x);
* requirement that IRB ADIs calculate and disclose RWA under the standardised approach and the introduction of a capital floor at 72.5% of standardised RWA; and
* use of prescribed New Zealand authority’s equivalent prudential rules for the purpose of calculating the Level 2 regulatory capital requirement.
In addition, operational RWA is calculated under APS 115 Capital Adequacy: Standardised Measurement Approach to Operational Risk (APS 115) which replaced the previous advanced methodology from December 2022.
### Suncorp Bank Acquisition
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 reported figures at 30 September 2025 include Suncorp Bank for the period since ownership where applicable.
Suncorp Bank is the trading name of Norfina Limited ABN 66 010 831 722 (formerly Suncorp-Metway Limited). Norfina Limited is an ADI and a wholly owned subsidiary of Australia and New Zealand Banking Group Limited (ANZBGL).
Suncorp Bank is a standardised ADI with Credit RWA calculated based on APS 112. Suncorp Bank is exposed to a similar range of inter-related business risks as the pre-existing ANZ portfolio, although with a predominant Australia domestic focus and has its own Risk Management Framework, Risk Management Strategy, Risk Appetite Statement and supporting suite of policies and procedures to manage these risks. Work is in progress to ensure a smooth transition and integration of risk management frameworks and policies, and effective integration into the ANZ risk management operating model.
### Verification of disclosures
These Pillar 3 disclosures have been verified in accordance with Board-approved policy, including ensuring consistency with information contained in returns provided to APRA. In addition, ANZ’s external auditor performs an agreed-upon procedures engagement with respect to the annual and semi-annual disclosures.
---
### Comparison to ANZBGL’s Financial Reporting
These disclosures have been produced in accordance with regulatory capital adequacy concepts and rules, rather than with accounting policies adopted in ANZBGL’s financial reports. As such, there are different areas of focus and measures in some common areas of these disclosures. These differences are most pronounced in the credit risk disclosures, for instance:
* The principal method for measuring the amount at risk is Exposure at Default (EAD), which is the estimated exposure owed on a credit obligation (including on-balance sheet and commitments and contingents) at the time of default.
* Loss Given Default (LGD) is an estimate of the loss expected in the event of default. LGD is essentially calculated as the amount at risk (EAD) less expected net recoveries from realisation of collateral as well as any post default repayments of principal and interest.
* Most credit risk disclosures split ANZ’s portfolio into regulatory asset classes, which span different areas of ANZ’s internal divisional and business unit organisational structure.
Unless otherwise stated, all amounts are rounded to AUD millions.
### Key Changes in the Pillar 3 report
In December 2022, APRA finalised the ADI public disclosure requirements (APS 330), effective 1 January 2025. Some of the key aims of the new requirements are to improve transparency and comparability and to align with updated international and domestic standards.
In accordance with APS 330, an ADI must make the prudential disclosures as set out in the Standard issued by the Basel Committee on Banking Supervision (BCBS Standard) titled “Disclosure requirements”, subject to the modifications specified in Attachment A of APS 330. The BCBS Standard, including disclosure templates and tables that an ADI must complete and disclose, is available on the Bank of International Settlements website.
An ADI may make minor modifications to the content of its disclosures under the BCBS Standard where there are inconsistencies between the BCBS Standard and the applicable requirements in any Prudential Standards$^{1}$. These modifications are noted in the respective disclosure tables throughout this document and outlined in detail in Appendix 1.
Certain comparative period disclosures for the updated templates will be included over future reporting periods.
$^1$ APS 330, Para. 19-20
---
# DIS20: Overview of risk management, key prudential metrics and RWA
## KM1: Key metrics (at consolidated group level)
The table below sets out the key regulatory metrics and ratios covering capital (including buffer requirements and ratios), RWA, Leverage ratio, Liquidity coverage ratio (LCR) and Net Stable Funding Ratio (NSFR).
This table has minor modifications from the original BCBS standard. Additional detail on these modifications has been provided in Appendix 1.
| | | Sep 25 $M | Jun 25 $M | Mar 25 $M | Dec 24 $M | Sep 24 $M |
| --- | --- | --- | --- | --- | --- | --- |
| | **Available capital (amounts)** | | | | | |
| 1 | Common Equity Tier 1 (CET1) | 55,184 | 56,942 | 55,229 | 54,333 | 54,469 |
| 2 | Tier 1 | 62,541 | 64,322 | 62,672 | 62,699 | 62,676 |
| 3 | Total capital | 96,351 | 96,834 | 95,503 | 92,447 | 91,865 |
| | **Risk-weighted assets (amounts)** | | | | | |
| 4 | Total risk-weighted assets (RWA) | 458,547 | 476,830 | 468,999 | 472,434 | 446,582 |
| 4a | Total risk-weighted assets (pre-floor) | 455,048 | 465,879 | 456,940 | 461,059 | 441,710 |
| | **Risk-based capital ratios as a percentage of RWA** | | | | | |
| 5 | CET1 ratio (%) | 12.0% | 11.9% | 11.8% | 11.5% | 12.2% |
| 5b | CET1 ratio (%) (pre-floor ratio) | 12.1% | 12.2% | 12.1% | 11.8% | 12.3% |
| 6 | Tier 1 ratio (%) | 13.6% | 13.5% | 13.4% | 13.3% | 14.0% |
| 6b | Tier 1 ratio (%) (pre-floor ratio) | 13.7% | 13.8% | 13.7% | 13.6% | 14.2% |
| 7 | Total capital ratio (%) | 21.0% | 20.3% | 20.4% | 19.6% | 20.6% |
| 7b | Total capital ratio (%) (pre-floor ratio) | 21.2% | 20.8% | 20.9% | 20.1% | 20.8% |
| | **Additional CET1 buffer requirements as a percentage of RWA** | | | | | |
| 8 | Capital conservation buffer requirement (%) | 3.75% | 3.75% | 3.75% | 3.75% | 3.75% |
| 9 | Countercyclical buffer requirement (%) | 0.7199% | 0.7191% | 0.7219% | 0.7276% | 0.7247% |
| 10 | Bank G-SIB and/or D-SIB additional requirements (%) | 1.00% | 1.00% | 1.00% | 1.00% | 1.00% |
| 11 | Total of bank CET1 specific buffer requirements (%) | 5.47% | 5.47% | 5.47% | 5.48% | 5.47% |
| 12 | CET1 available after meeting the bank’s minimum capital requirements (%) | 7.5% | 7.4% | 7.3% | 7.0% | 7.7% |
| | **Basel III Leverage ratio** | | | | | |
| 13 | Total Basel III leverage ratio exposure measure | 1,424,842 | 1,447,763 | 1,427,834 | 1,432,615 | 1,344,137 |
| 14 | Basel III leverage ratio (%) (including the impact of any applicable temporary exemption of central bank reserves) | 4.4% | 4.4% | 4.4% | 4.4% | 4.7% |
| | **Liquidity Coverage Ratio (LCR)** | | | | | |
| 15 | Total high-quality liquid assets (HQLA) | 314,879 | 324,230 | 316,323 | 295,673 | 275,264 |
| 16 | Total net cash outflow | 238,504 | 242,689 | 237,584 | 225,783 | 207,942 |
| 17 | LCR ratio (%) | 132.07% | 133.63% | 133.17% | 130.95% | 132.38% |
| | **Net Stable Funding Ratio (NSFR)** | | | | | |
| 18 | Total available stable funding | 730,141 | 744,791 | 737,456 | 721,838 | 704,909 |
| 19 | Total required stable funding | 637,319 | 642,418 | 630,563 | 634,312 | 607,169 |
| 20 | NSFR ratio | 114.56% | 115.94% | 116.95% | 113.80% | 116.10% |
### Common Equity Tier 1
Level 2 CET1 ratio of 12.0%, an increase of 25bps since March 2025. Key drivers were:
* Cash profit (Level 2) excluding 2H25 significant items increased the CET1 ratio by +71 bps.
* 2H25 significant items decreased the CET1 ratio by -19 bps, relating to significant items impacting CET1 including an increase of $141 million to Suncorp Bank goodwill post purchase price allocation (PPA) completion during the September 2025 half.
* Payment of the 2025 interim dividend (net of Dividend Reinvestment Plan (DRP) and Bonus Option Plan (BOP)) reduced the CET1 ratio by - 45 bps.
* A reduction in underlying RWA usage increased the CET1 ratio by +3 bps, driven by portfolio optimisation in the Institutional division, partially offset by lending growth in the Australia Retail and New Zealand divisions, along with increased IRRBB RWA.
* Capital deductions, RWA initiatives and others reduced CET1 ratio by -7 bps, driven by the additional operational risk overlay and higher deferred tax assets, offset by a benefit from reduced loss in fair value through other comprehensive income (FVOCI) reserves and a lower deduction in APRA expected loss in excess of eligible provisions.
* A decrease in the capital floor increased the CET1 ratio by +22 bps, mainly due to the reduction in the Institutional division reducing the capital floor by more than the actual RWA decrease and the impact of an increase in IRRBB RWA.
---
### Leverage ratio
APRA leverage ratio is flat during the September 2025 half.
For key movements in RWA see table OV1: Overview of RWA.
### Liquidity
The Group’s average LCR for the 3 months to 30 September 2025 has decreased -1.5% from 133.6% as at 30 June 2025 to 132.1% with total liquid assets exceeding net cash outflows by an average of $76.4 billion.
Through the period the LCR has remained within the range 127% to 138%. The liquid asset portfolio was made up of on average 38% ($119.4 billion) cash and central bank reserves and 56% ($174.3 billion) HQLA1 securities, with the remaining mainly consisting of HQLA2 securities.
The Group's NSFR has decreased 1.4% over the quarter from 115.9% as at 30 June 2025 to 114.6% as at 30 September 2025. This was driven by a change in the proportion of wholesale funding in the less than 6-month maturity bucket, the July dividend payment and a movement in collateral composition.
The main sources of Available Stable Funding (ASF) at 30 September 2025 were deposits from Retail and SME customers, at 50%, with other wholesale funding at 27% and capital at 14% of the total ASF.
The majority of ANZ's Required Stable Funding (RSF) at 30 September 2025 was driven by mortgages at 51% and other lending to non-financial institution customers at 28% of the total RSF.
## Key metrics - Suncorp Bank
The table below sets out the key regulatory metrics and ratios covering capital and RWA for Suncorp Bank.
Following the acquisition of Suncorp Bank on 31 July 2024, the reported figures include Suncorp Bank for the period since ownership where applicable. As of March 2025, Suncorp Bank does not produce a separate Pillar 3 report. The table below sets out the key information on regulatory metrics and ratios covering capital and RWAs for Suncorp Bank.
Suncorp Bank is a standardised ADI with Credit RWA calculated based on APS 112 Standardised Approach to Credit Risk.
| | | Sep 25 $M | Jun 25 $M | Mar 25 $M | Dec 24 $M | Sep 24 $M |
| --- | --- | --- | --- | --- | --- | --- |
| | **Available capital (amounts)** | | | | | |
| 1 | Common Equity Tier 1 (CET1) | 3,638 | 3,666 | 3,559 | 3,440 | 3,345 |
| 2 | Tier 1 | 4,198 | 4,226 | 4,119 | 4,000 | 3,905 |
| 3 | Total capital | 5,047 | 5,063 | 4,955 | 4,830 | 4,751 |
| | **Risk-weighted assets (amounts)** | | | | | |
| 4 | Total risk-weighted assets (RWA) | 33,821 | 34,060 | 33,356 | 33,516 | 33,422 |
| | **Risk-based capital ratios as a percentage of RWA** | | | | | |
| 5 | CET1 ratio (%) | 10.8% | 10.8% | 10.7% | 10.3% | 10.0% |
| 6 | Tier 1 ratio (%) | 12.4% | 12.4% | 12.3% | 11.9% | 11.7% |
| 7 | Total capital ratio (%) | 14.9% | 14.9% | 14.9% | 14.4% | 14.2% |
---
# OVA: Bank risk management approach
### (a) Key risks related to the business model
#### Risk management framework
Aligned with APRA’s CPS 220 Risk Management (CPS 220) standard, ANZ’s Risk Management Framework (RMF) is designed to support ANZ’s strategic objectives.
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 Committee (BRC) to develop and monitor compliance with the Group’s risk management policies.
The Committee reports regularly to the Board on its activities. The key pillars of ANZ’s Group RMF include:
The Risk Management Strategy (RMS) outlines how risk management supports the Group’s purpose and strategy, the responsibilities of the Group Chief Risk Officer and the risk function, and the values and behaviours that guide risk decision-making. The RMS describes each material risk and how it is managed, including policies, standards, and procedures. It also details how risks are identified, measured, evaluated, monitored, reported, and controlled or mitigated, along with the oversight mechanisms and committees in place.
The Risk Appetite Statement (RAS) articulates 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.
The RAS, supported by other components of the RMF, also conveys the following:
* The degree of risk (risk appetite) that ANZ is prepared to accept in pursuit of its strategic objectives and plans considering its shareholders’, depositors’ and customers’ interests.
* For each material risk, the maximum level of risk that ANZ is willing to operate within, expressed as a risk tolerance, where appropriate. Risk tolerances translate risk appetite into operational limits for the day-to-day management of material risks, where possible;
* The approach for setting risk tolerances at an appropriate level;
* The process for monitoring compliance with each risk tolerance and for taking appropriate action if it is breached;
* The timing and process for reviewing of the risk appetite and risk tolerances; and
* The cascading and application of Group RAS to Divisions and Business Units.
The Group Strategic Planning Process outlines the approach to implementing ANZ Group’s strategic objectives, considering the Material Risks the Bank might have to navigate to achieve its goals.
The governance and oversight of risk management, while embedded in day-to-day activities, is also the focus of committees and regular forums across the bank (see diagram next page). The committees and forums discuss and monitor known and emerging risks, review management plans and monitor progress to address known issues.
Risk management is operationalised using the Three Lines-of-Defence Model. Each line of defence has defined roles, responsibilities and escalation paths to support risk management at ANZ.
The first line of defence, comprising business and enablement functions, manages day-to-day risks and controls. The second line, the Risk function, provides independent oversight and challenges decisions affecting the Group's risk profile. Internal Audit, the third line, offers independent evaluation and assurance on the effectiveness of the Group's RMF.
Suncorp Bank currently operates an independent RMF. Suncorp Bank’s Risk Management Framework (RMF) will no longer apply once legal transfer and migration are complete; from which point the ANZ RMF will apply.
#### Court enforceable undertaking and ASIC settlement
In April 2025, ANZ confirmed it had entered into a court enforceable undertaking (CEU) with the Australian Prudential Regulation Authority (APRA) for matters relating to Non-financial risk management practices and risk culture across the Group.
In September 2025 the Group:
* submitted its Root Cause Remediation Plan (RCRP) to APRA as required by the CEU.
* entered into an agreement with the Australian Securities and Investments Commission (ASIC) to resolve five matters within its Australia Markets and Australia Retail businesses that were the subject of separate regulatory investigations. Under the agreement, which requires Federal Court approval, the Group is subject to total penalties of $240 million.
* recognised an after-tax charge of $264 million comprising $240 million in relation to ASIC penalties and $24 million of various costs associated with the matter. This was recognised across the Australia Retail and Institutional divisions.
It is acknowledged that the risk management framework will be updated and strengthened, including to better reflect the importance of non-financial risks as part of the RCRP.
---
### Risk types
The material risks facing the Group and how these risks are managed, are summarised below.
ANZ’s Risk function is responsible for the organisation’s risk strategies, policies and processes. It has global authority for the effectiveness of the RMF, maintaining a strong risk, control, governance and compliance focus in line with ANZ’s risk management framework and systems.
For detailed description on the scope and main features of risk measurement systems and risk reporting, as well as processes to mitigate risks, refer to the respective sections noted for each risk type.
| 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. | ANZ pursues 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 ANZ’s capital base against key policy objectives. Refer to DIS25: Composition of Capital for details on Capital Adequacy measurement and reporting. |
| **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 deterioration of value. | ANZ’s 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. Refer to CRA: General qualitative information on Credit Risk for details on Credit Risk measurement and reporting and CRC: Qualitative Disclosure related to Credit Risk mitigation on strategies and processes to mitigate Credit Risk. |
| **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 insufficient 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. ANZ’s 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. Refer to DIS85: Liquidity for details on Liquidity measurement and reporting. |
| **Market risk** | The risk stems from ANZ’s 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. | ANZ has 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. Refer to DIS 50: Market Risk and IRRBBA: Interest Rate Risk in the Banking Book (IRRBB) risk management objectives and policies for details on Market Risk measurement and reporting and strategies and processes to mitigate and hedge Market Risk. |
| **Strategic risk** | The risk that ANZ may not achieve its key strategic objectives due to ineffective adaptation to changes in the operating environment undermining the bank’s capacity to pivot or refine strategies in response to evolving conditions. | ANZ’s strategic risk management is underpinned by a rolling three-year business plan, updated annually to remain responsive to a changing environment. This plan is informed by structured analysis and reviewed by risk, Group Strategy and the Executive Committee to ensure alignment with ANZ’s risk appetite and long-term goals. |
---
| Risk type | Description | Managing the risk |
| --- | --- | --- |
| | | Regular reviews of strategic objectives and market conditions support ongoing alignment and adaptability. Insights from these processes are presented to the Board to guide strategic decision-making. |
| **Climate risk** | The financial and non-financial risks arising from climate change including: 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 emissions economy, including changes in domestic and international policy and regulatory settings, 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. | ANZ continue to integrate and embed climate risk within ANZ’s Risk Management Framework. While climate risk can be a driver of credit risk through lending to ANZ’s customers, it may also result in other financial risks. Climate risks are also considered to be a driver of other material risks within ANZ’s RMF. Climate-related financial and non-financial risks are managed through the risk management strategies associated with these risks. |
| **Financial crime risk** | The risk of facilitating financial crime including non-compliance with ANZ policies, or regulatory expectations. It includes the following non-financial risk themes: Financial Crime – The risk of facilitating money laundering, terrorism financing, sanctions evasion, or bribery and corruption events. Internal Fraud – Fraud / theft attempted or perpetrated by an internal party (or parties) (i.e. an ANZ employee or contingent worker, including instances where an employee is acting in collusion with external parties). External Fraud – Fraud attempted or perpetrated without the deliberate involvement of an ANZ employee or contingent worker. | ANZ maintains 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-Money Laundering/Counter Terrorism Financing Sanctions, Anti-Bribery & Anti-Corruption and Anti-Fraud Programs and Policies. This allows ANZ to deliver detection, investigative and intelligence capability focused on identifying, mitigating, and managing financial crime risk to help protect the community. ANZ continues to maintain ANZ’s partnership with the Australian Transaction Report and Analysis Centre (AUSTRAC) Fintel Alliance and through membership of the Financial Crime Prevention Network in New Zealand to increase the resilience of the financial sector to prevent exploitation by criminals, and support investigations into serious crime and national security. |
| **Compliance & conduct risk** | The risks of legal or regulatory actions, material financial loss, or loss of reputation caused by ANZ failing to: • comply with laws, regulations, prudential standards, licences, codes or policies; • appropriately manage customer interests and market integrity. It includes the non-financial risk themes of conduct and regulatory risk. | ANZ manages compliance and conduct risks pursuant to ANZ’s Risk Management Strategy, ANZ Non-Financial Risk Framework and related policies. |
| **Resilience risk** | The risk of material adverse impacts of operational disruption events on ANZ Group, its customers, and the financial system. It includes the non-financial risk themes of operational resilience, data, third party, technology and information security (including cyber). | ANZ manages resilience through ANZ’s Non-Financial Risk Framework supported by resilience policies, standards and procedures designed to protect critical operations to safeguard customer interests and uphold financial stability. The framework covers the approach to business continuity and incident response management, |
---
| Risk type | Description | Managing the risk |
| --- | --- | --- |
| | | and incorporates key controls such as risk assessments, scenario testing, and crisis management protocols. The framework is regularly reviewed to reflect emerging threats, operational dependencies, lessons learned from real events, regulatory expectations, and industry best practices. Specifically, data risk is governed to ensure accuracy, integrity, and ethical use; information security and cyber risk are mitigated through layered controls, continuous monitoring, and enhanced cyber resilience strategies to defend against threats like AI-enabled attacks; operational resilience is maintained by identifying critical services and ensuring continuity within defined tolerance through monitoring, continuity planning and testing and Third Party Risk Management (TPRM) framework; and technology risk is managed by focusing on information technology (IT) systems resilience, stability, and secure change processes aligned with regulatory expectations. |
| **Operational risk** | The risk of loss resulting from inadequate or failed internal processes, people, systems, or from external events. This includes the non-financial risk themes of model, third party, physical security, transaction processing and execution, people, legal, statutory reporting & tax and change execution | The management of operational risk is prescribed in the Non-Financial Risk Framework, which ANZ continues to review and evolve to ensure that it supports the delivery of consistent processes and repeatable outcomes for ANZ customers. There is an increased focus on change execution risk which refers to the risk that change initiatives may fail to deliver intended outcomes due to breakdowns in planning, delivery, stakeholder engagement, and adoption. This risk is linked to the Group’s strategic priorities. The Group is adjusting its risk taxonomy to ensure risk management, governance, and oversight are concentrated where they are most needed. Refer to ORA: General qualitative Information on a bank’s operational risk framework for details on NFR measurement and reporting. |
### (b) Risk governance structure
The following lists the Board Committees, in accordance with ANZ Accountability Map under the Financial Accountability Regime (FAR). From time to time, other ad hoc committees of the Board may be formed.
The Board is responsible for setting a target risk culture, overseeing the establishment by management of an operational structure and the necessary resources to facilitate effective risk management throughout the Group. These responsibilities include:
* Overseeing and assessing management’s performance in achieving strategies and budgets approved by the Board and monitoring and managing risk across the banking group;
* Monitoring compliance with regulatory requirements, ethical standards and external commitments, oversight of the banking group’s governance framework and implementation of related policies;
* Overseeing management’s establishment of a sound risk management culture that supports the ability of the banking group to operate consistently within its risk appetite; and
* Approving each of the following (except to the extent delegated by the Board from time to time):
* the risk appetite within which management is expected to operate, including the Group’s risk appetite statement and risk management strategy;
* the performance and remuneration policy;
* major changes to the internal capital adequacy assessment process and the liquidity and funding management strategy or policy of the Level 2 Banking group.
---
### Principal board committees
The following lists the Board Committees, in accordance with ANZ Accountability Map under the Financial Accountability Regime (FAR). From time to time, other ad hoc committees of the Board may be formed.
**Risk Committee** - assists the Board of Directors in:
* Advising the Board on, and recommending any change to ANZ's overall current and future risk appetite and risk management strategy, as appropriate;
* Assessing and advising the Board on management’s implementation of the risk management strategy;
* Reviewing, and if thought fit, approving matters escalated from management concerning credit transactions, equity and other investments beyond the approval discretion of management;
* Reviewing matters escalated from management concerning risk acceptance, or resolution of significant risk exposures and risk events of ANZ (including significant breaches), and if thought fit, approving matters beyond the approval discretion of management;
* Overseeing compliance by ANZ with applicable external regulatory obligations, significant internal polices relating to the operation of its business and APRA risk reporting requirements (as appropriate);
* Advising the Board’s People & Culture Committee of any financial or non-financial risk outcomes that may warrant consideration by the Board’s People & Culture Committee in discharging its duties; and
* Monitoring key technology and cyber risks including matters referred to it by the Board’s Digital Business and Technology Committee.
**Audit Committee** - assists the Board of Directors in:
* Overseeing the work of internal and external audit, including by regularly reviewing internal and external audit plans to ensure they meet regulatory requirements and cover all material risks and financial reporting requirements;
* Regularly reviewing the findings of audits, and seeking to ensure that concerns are being managed and rectified in an appropriate and timely manner;
* Overseeing the adequacy and independence of the internal and external audit functions;
* Overseeing ANZ's compliance with its financial reporting and professional accounting requirements;
* Overseeing and reviewing ANZ's financial reporting principles and policies, controls and procedures; and
* Seeking to ensure that management’s procedures for the receipt, retention and treatment of information submitted confidentially by employees and third parties regarding accounting, internal controls, compliance or audit matters are established and maintained.
**Digital Business and Technology Committee** – assists the Board of Directors in:
* Monitoring and providing guidance as appropriate on matters relating to ANZ's digital transformation, technology, technology-related innovation strategies and information/cyber security strategies;
* Monitoring the delivery of the key programs that form part of ANZ's digital transformation, technology, technology-related innovation strategies and information/cyber security strategies;
* Recommending to the Board and monitoring the delivery of material digital transformation and technology investments; and
* Reviewing health and relevance of ANZ’s technology suite, to seek to ensure secure, stable and reliable services.
**People and Culture Committee** - assists the Board of Directors in:
* Overseeing the design, effective operation, implementation and monitoring of the performance and remuneration framework, including performance management, fixed and variable remuneration, and accountability and consequence management;
* Considering and approving, where appropriate, remuneration arrangements for Non-Executive Directors;
* Considering and approving, or making recommendations to the Board, on the appointment (including fit and proper assessments) and termination of specified roles in accordance with the performance and remuneration policy;
* Overseeing succession plans for enterprise business critical roles, including making recommendations to the Board on succession matters relating to the Chief Executive Officer;
* Reviewing and making recommendations to the Board regarding remuneration arrangements and outcomes (including performance measures and assessment, and fixed and variable remuneration outcomes) for specified roles in accordance with the performance and remuneration policy;
* Reviewing and, where appropriate, approving relevant talent and culture strategies, policies and practices, including strategies and actions being taken to measure, monitor and continue to evolve organisational culture;
* Reviewing regular reporting on ANZ’s Financial Accountability Regime framework;
* Overseeing the Enterprise Accountability Group (EAG) in carrying out its responsibilities under the EAG Charter, including approving any recommendations from EAG in relation to the accountability and consequence framework;
* Overseeing ANZ’s approach to diversity and inclusion;
---
* Monitoring and where appropriate approving matters relating to the development of a stakeholder engagement strategy for shareholder and regulator communication in relation to remuneration issues; and
* Monitoring and where appropriate approving matters relating to ANZ 's compliance with regulatory, legal and any continuous disclosure requirements relating to remuneration.
**Nomination and Board Operations Committee** - supports the Board of Directors in:
* Assisting the Board with all matters to do with the proper functioning of the Board, including in relation to its ongoing composition;
* Reviewing and approving the processes in place for evaluating the performance of the Board, its Standing Committees and each Director, including the Chairman of the Board but excluding the Chief Executive Officer; and
* All other matters to do with the effective and efficient operation of the Board and its Standing Committees.
The above Committees are exclusively comprised of Non-Executive directors. Members, including the Chair of each committee, are appointed by the Board and serve at the discretion of the Board and for such term or terms as the Board determines. Under ANZ’s FAR arrangements, the chair and members of each committee are accountable persons with prescribed responsibility for oversight of ANZ, as a member of the Board.
Processes and procedures relating to the operation of each of the board committees are documented in the committee charters and in the Board Committees’ Standing Rules which are on the ANZ corporate governance website: http://shareholder.anz.com/our-company/corporate governance.
### Executive Management Committees
Executive Management Committees are responsible for co-ordination of risk matters for each of the areas of risk management. The following lists ANZ’s key management committees and states their primary purpose, in accordance with ANZ’s accountability map under FAR, and related sub committees:
**Group Executive Committee (ExCo)** - headed by the CEO is ANZ’s leadership team whose role is to support the CEO in delivering ANZ’s purpose, to shape a world where people and communities thrive. It does this by focusing on:
* All Key stakeholders;
* ANZ’s Culture and Capabilities; and
* Prioritising efforts and allocating resources in line with ANZ’s strategic pillars.
**Enterprise Accountability Group** – reports to Board Human Resources Committee and is responsible for:
* overseeing the ongoing effectiveness of an enterprise-wide accountability and consequence management framework and being cognisant of its impact on the culture of ANZ;
* reviewing and approving the release of, or exercise of the downward adjustment or further deferral discretions in relation to, deferred remuneration; and
* reviewing and monitoring the consequences applied to staff who are considered either directly or indirectly accountable for material risk (financial or non-financial) and compliance events and/ or material internal audit issues.
**Group Asset and Liability Committee (GALCO)** - is responsible for the oversight and strategic management of the Group’s balance sheet activities including balance sheet structure, liquidity, funding, capital management, non-traded interest rate risk and non-traded FX risk.
**Capital and Stress Testing Oversight Committee (CSTOC)** - is a sub-committee of GALCO, with responsibility for the oversight and control of the Group’s stress testing framework, modelling, processes and outcomes; economic profit methodology and framework; operational risk capital measurement framework, modelling, processes and outcomes; capital allocation framework and other capital management (apart from Group ICAAP) and portfolio measurement related recommendations.
**Credit and Market Risk Committee (CMRC)** - is the senior executive management forum responsible for the oversight and control of credit, market and other material financial risks across the ANZ Group. The purpose of CMRC is to assist the BRCs in the effective discharge of their responsibilities.
**Credit Ratings System Oversight Committee (CRSOC)** - is the senior management forum responsible for the oversight and control of the Internal Ratings System for credit risk including credit model approvals and performance monitoring. CRSOC is a sub-committee of the CMRC.
**Operational Risk Executive Committee (OREC)** - is the primary senior executive management forum responsible for oversight of Operational Risk and Compliance Risk expected and unexpected risk profile and the related control environment across the ANZ Group. The purpose of OREC is to assist the BRCs in the effective discharge of their responsibilities.
**Investment Committee** - is to carry out the responsibilities delegated by the CEO of ANZ, regarding the funding and delivery of value from ANZ’s investments in change initiatives. The committee acts as the governance, oversight and advisory board for funding provided to the Divisions and enterprise priorities.
**Group Executive People Committee (GEPC)** - is a leadership and decision-making body charged with advancing ANZ’s people strategy and priorities in line with the ANZ’s purpose, strategy and aspirational culture.
### Suncorp Bank
Suncorp bank has its own Enterprise Risk Management Framework (ERMF) and Risk Management Strategy (RMS) which sets out how Suncorp Bank manages its risks utilising the ERMF, including risk appetite, policies, procedures, management responsibilities and controls.
---
Suncorp Bank’s Risk Appetite Statement (RAS) is approved by its Board and sets the parameters within which the Suncorp Bank CEO and management are expected to operate. Any metrics outside tolerance are escalated to the Suncorp Bank CRO and tabled at the relevant management committee (Suncorp Bank Credit Risk Committee/ Suncorp Bank Non-Financial Risk Committee/Suncorp Bank Assets and Liability Committee) to determine management actions to address, which are then reported to its Board.
### (c) Risk culture within the bank
Risk culture is an important part of ANZ’s organisational culture, influencing decision-making through shared values, behaviours, and practices. ANZ’s Risk Principles form an important part of the RMF by guiding risk management and fostering an appropriate risk culture across the Group.
Despite ANZ’s strong focus on risk culture there is still a requirement for further improvement. ANZ’s expectations for continuous improvement in risk culture have not been met in key businesses across the Group. ANZ has committed under the RCRP to reviewing and strengthening the approach to risk culture, to support the Group to meet the evolving expectations of ANZ’s customers, shareholders, the community and regulators.
Risk culture is driven across the Group through completion of risk culture plans, awareness activities and delivery of the Group wide non-financial risk framework. Divisional and Functional level maturity assessments assist the Board to form a view of ANZ’s overall risk culture annually.
Risk culture is embedded in performance and remuneration (refer to the ANZBGL Remuneration Report within the ANZBGL Annual Report), and recognition programs such as Risk Role Models.
### (d) Qualitative information on stress testing
**Capital and Stress Testing Oversight Committee (CSTOC)** – is a sub-committee of GALCO, with responsibility for the oversight and control of the Group’s stress testing framework. Refer to section (b) Risk governance structure for further details on CSTOC.
#### Capital management
ANZ achieves its Capital management objectives through an Internal Capital Adequacy Assessment Process (ICAAP) whereby ANZ conducts detailed strategic and capital planning over a medium-term time horizon. The Capital Plan is maintained and updated through a monthly review of forecast financial performance, economic conditions and development of business initiatives and strategies. The Board and senior management are provided with monthly updates of ANZ’s capital position. Any actions required to ensure ongoing prudent capital management are submitted to the Board for approval. ANZ annually conducts a detailed strategic planning process over a three-year time horizon, the outcomes of which are embodied in the Strategic Plan. This process involves forecasting key economic variables which Divisions use to determine key financial data for their existing business. New strategic initiatives to be undertaken over the planning period and their financial impact are then determined. These processes are used for the following:
* Stress tests are performed under different economic conditions to provide a comprehensive review of ANZ’s capital position both before and after mitigating actions. The stress tests determine the level of additional capital (i.e., the ‘stress capital buffer’) needed to absorb losses that may be experienced during an economic downturn; and
* Stress testing is integral to strengthening the predictive approach to risk management and is a key component in managing risks, asset writing strategies and business strategies. It creates greater understanding of the impacts on financial performance through modelling relationships and sensitivities between geographic, industry and Divisional exposures under a range of macro-economic scenarios. ANZ has a dedicated stress testing team that models and reports to management and the BRC on a range of scenarios and stress tests.
#### Reporting of traded market risk
ANZ also undertakes a wide range of stress tests on the Group trading portfolio and to individual trading portfolios. Refer to DIS50: Market Risk for further details.
#### IRRBB stress testing methodology
Stress tests within ANZ include standard and extraordinary tests. These tests are used to highlight potential risk which may not be captured by VaR, and how the portfolio might behave under extraordinary circumstances. Refer to IRRBBA: IRRBB risk management objectives and policies for further details.
---
# OV1: Overview of RWA
The table below shows RWA and minimum capital requirements by risk type and approach. For the purpose of this table, the minimum capital requirement is defined to be 8% of RWA.
This table has minor modifications from the original BCBS standard. Additional detail on these modifications has been provided in Appendix 1.
| | | RWA Sep 25 $M | RWA Jun 25 $M | RWA Mar 25 $M | Minimum capital requirements Sep 25 $M |
| --- | --- | --- | --- | --- | --- |
| 1 | Credit risk (excluding counterparty credit risk) | 350,098 | 361,775 | 357,140 | 28,008 |
| 2 | of which: standardised approach (SA) | 40,401 | 41,363 | 42,612 | 3,232 |
| 3 | of which: foundation internal ratings-based (FIRB) approach | 67,702 | 73,363 | 69,351 | 5,416 |
| 4 | of which: supervisory slotting approach | 13,787 | 14,827 | 15,360 | 1,103 |
| 5 | of which: advanced internal ratings-based (AIRB) approach$^{1, 2}$ | 228,208 | 232,222 | 229,817 | 18,257 |
| 6 | Counterparty credit risk (CCR) | 13,226 | 14,345 | 13,809 | 1,058 |
| 7 | of which: standardised approach for counterparty credit risk | 12,616 | 13,645 | 13,097 | 1,009 |
| 8 | of which: IMM | - | - | - | - |
| 9 | of which: other CCR | 610 | 700 | 712 | 49 |
| 10 | Credit valuation adjustment (CVA) | 3,768 | 4,991 | 4,736 | 301 |
| 16 | Securitisation exposures in banking book | 2,491 | 2,535 | 2,396 | 199 |
| 17 | of which: securitisation IRB approach (SEC-IRBA) | - | - | - | - |
| 18 | of which: securitisation external ratings-based approach (SEC-ERBA), including internal assessment approach (IAA) | 776 | 870 | 780 | 62 |
| 19 | of which: securitisation standardised approach (SEC-SA) | 1,715 | 1,665 | 1,616 | 137 |
| 20 | Market risk | 6,895 | 7,719 | 6,854 | 551 |
| 21 | of which: standardised approach (SA) | 1,518 | 1,193 | 1,288 | 121 |
| 22 | of which: internal model approach (IMA) | 5,377 | 6,526 | 5,566 | 430 |
| 24 | Operational risk$^{3}$ | 53,773 | 53,773 | 50,648 | 4,302 |
| 25a | IRRBB regulatory RWA | 24,797 | 20,741 | 21,357 | 1,984 |
| 26 | Output floor applied (%) | 72.5% | 72.5% | 72.5% | |
| 28 | Floor adjustment | 3,499 | 10,951 | 12,059 | 280 |
| 29 | **Total** | **458,547** | **476,830** | **468,999** | **36,683** |
$^1$ Includes a $3.1 billion RWA overlay relating to the Australian Residential Mortgages PD model introduced from 30 June 2024 reporting period.
$^2$ Includes a $4.2 billion RWA overlay relating to an Income Producing Real Estate (IPRE) risk weight floor.
$^3$ Reporting periods 30 September 2025 and 30 June 2025 include $12.5 billion ($1 billion capital) operational risk RWA overlay, applied to both Level 1 and Level 2. Corresponding overlay for 31 March 2025 was $9.4 billion RWA ($750 million capital).
The minimum capital requirement is based on an 8% capitalisation rate, however ANZ’s current CET1 ratio is 12.0% as at 30 September 2025.
#### Credit risk weighted assets
Credit RWA for 30 September 2025 totalled $369.6 billion (which includes Credit Risk, Counterparty Credit Risk, CVA and Securitisation), an $8.5 billion decrease half on half. Key drivers of this movement include:
* Volume reduction (-$3.4 billion) driven by the Institutional business (-$5.5 billion) mainly in corporate asset classes combined with lower markets-related exposures. This was partially offset by volume growth in the Australia Retail Home Loans portfolio (+$1.9 billion).
* Portfolio risk was lower (-$1.7 billion) mostly from improvement in the Australia Retail Home Loans portfolio.
* Other movements (-$0.9 billion) mostly related to a reduction in CVA RWA from increased CVA hedging.
* Foreign exchange impact reduction (-$4.8 billion)
* Data, models and methodology (+$2.3 billion) from continued refinement in processes, data and associated methodology treatments.
#### Market risk, Operational risk and IRRBB RWA
Traded Market Risk RWA remained broadly stable, increasing marginally by $0.04 billion half-on-half. This movement was primarily driven by higher bond holdings.
IRRBB RWA increased over the half primarily due to higher Repricing and Yield Curve Risk combined with incorporating IRRBB risk for Suncorp Bank.
Operational risk RWA increased from $50.6 billion to $53.8 billion, driven by increase in the Operational risk overlay from $750 million to $1 billion capital, applied to both Level 1 and Level 2, from 30 April 2025.
---
### Floor adjustment RWA
The RWA floor adjustment is the additional RWA required after comparing the total actual RWA to the Output Floor of 72.5% of RWA calculated under the full standardised approach. For 30 September 2025, the RWA floor adjustment was $3.5 billion, a decrease of $8.6 billion over the half. The decrease in the RWA floor adjustment included:
* A net reduction of $4.2 billion from credit and counterparty risks, primarily driven by the reduction in the Institutional portfolio which decreased the Output Floor by more than actual RWA.
* A reduction arising from IRRBB which was higher by $3.4 billion but has no impact on the Output Floor.
* A reduction arising from the additional Operational risk overlay, which increased Operational Risk RWA by $3.1 billion but contributed a smaller $2.7 billion RWA increase to the Output Floor.
---
# Overview of EAD and RWA
The table below shows a summary of EAD and RWA by asset class.
| Sep 25 | EAD Post-CCF and Post-CRM | RWA |
| --- | --- | --- |
| | Credit risk $m | Counterparty credit risk $m | Total $m | Credit risk $m | Counterparty credit risk $m | Total $m |
| 1 Subject to AIRB approach | 697,803 | 3,123 | 700,926 | 228,208 | 1,282 | 229,490 |
| 2 of which Corporate (including SME)$^1$ | 138,656 | 1,476 | 140,132 | 63,726 | 651 | 64,377 |
| 3 of which Retail SME | 16,515 | - | 16,515 | 9,419 | - | 9,419 |
| 4 of which Residential mortgage$^2$ | 373,535 | - | 373,535 | 94,135 | - | 94,135 |
| 5 of which Qualifying revolving retail | 12,465 | - | 12,465 | 3,032 | - | 3,032 |
| 6 of which Other retail | 1,450 | - | 1,450 | 1,642 | - | 1,642 |
| 7 of which RBNZ regulated banking subsidiary | 155,182 | 1,647 | 156,829 | 56,254 | 631 | 56,885 |
| 8 Subject to FIRB approach | 403,354 | 38,337 | 441,691 | 67,702 | 10,561 | 78,263 |
| 9 of which Corporate | 84,651 | 6,226 | 90,877 | 34,388 | 2,477 | 36,865 |
| 10 of which Sovereign | 230,008 | 3,335 | 233,343 | 10,107 | 175 | 10,282 |
| 11 of which Financial institution | 88,695 | 28,776 | 117,471 | 23,207 | 7,909 | 31,116 |
| 12 Subject to supervisory slotting (including RBNZ) | 16,427 | 370 | 16,797 | 13,787 | 285 | 14,072 |
| 13 Subject to standardised approach | 131,242 | 12,766 | 144,008 | 40,401 | 1,098 | 41,499 |
| 14 of which Corporate (including SME) | 15,984 | 80 | 16,064 | 12,456 | 84 | 12,540 |
| 15 of which Residential mortgage | 64,727 | - | 64,727 | 22,407 | - | 22,407 |
| 16 of which Sovereign | 10,949 | 175 | 11,124 | 10 | 175 | 185 |
| 17 of which Other exposures | 13,711 | 9,550 | 23,261 | 3,698 | 420 | 4,118 |
| 18 of which RBNZ regulated banking subsidiary | 25,871 | 2,961 | 28,832 | 1,830 | 419 | 2,249 |
| 19 Total credit and counterparty credit risk$^3$ | 1,248,826 | 54,596 | 1,303,422 | 350,098 | 13,226 | 363,324 |
| 20 Credit valuation adjustment | | | | | | 3,768 |
| 21 Securitisation exposures in banking book | | | 15,678 | | | 2,491 |
| 22 Total subject to calculation of RWA for credit risk | | | 1,319,100 | | | 369,583 |
| 23 Market risk | | | | | | 6,895 |
| 24 Operational risk | | | | | | 53,773 |
| 25 Interest rate risk in the banking book | | | | | | 24,797 |
| 26 Floor adjustment | | | | | | 3,499 |
| 27 Total RWA | | | | | | 458,547 |
$^1$ Includes a $4.2 billion RWA overlay relating to an IPRE risk weight floor.
$^2$ Includes a $3.1 billion RWA overlay relating to the Australian Residential Mortgages PD model introduced from 30 June 2024 reporting period.
$^3$ The percentage of credit risk EAD (excluding CCR) covered by the AIRB, FIRB, supervisory slotting and standardised approaches was 56%, 32%, 1%, 11%, respectively.
---
# Overview of EAD and RWA (Continued)
| Jun 25 | EAD Post-CCF and Post-CRM | RWA |
| --- | --- | --- |
| | Credit risk $m | Counterparty credit risk $m | Total $m | Credit risk $m | Counterparty credit risk $m | Total $m |
| 1 Subject to AIRB approach | 704,540 | 2,722 | 707,262 | 232,222 | 1,210 | 233,432 |
| 2 of which Corporate (including SME) | 140,491 | 1,719 | 142,210 | 65,978 | 764 | 66,742 |
| 3 of which Retail SME | 16,781 | - | 16,781 | 9,527 | - | 9,527 |
| 4 of which Residential mortgage$^1$ | 371,200 | - | 371,200 | 95,516 | - | 95,516 |
| 5 of which Qualifying revolving retail | 12,576 | - | 12,576 | 3,101 | - | 3,101 |
| 6 of which Other retail | 1,483 | - | 1,483 | 1,675 | - | 1,675 |
| 7 of which RBNZ regulated banking subsidiary | 162,009 | 1,003 | 163,012 | 56,425 | 446 | 56,871 |
| 8 Subject to FIRB approach | 446,003 | 40,257 | 486,260 | 73,363 | 11,449 | 84,812 |
| 9 of which Corporate | 97,480 | 6,637 | 104,117 | 38,458 | 2,743 | 41,201 |
| 10 of which Sovereign | 254,360 | 4,032 | 258,392 | 10,055 | 287 | 10,342 |
| 11 of which Financial institution | 94,163 | 29,588 | 123,751 | 24,850 | 8,419 | 33,269 |
| 12 Subject to supervisory slotting (including RBNZ) | 17,803 | 420 | 18,223 | 14,827 | 320 | 15,147 |
| 13 Subject to standardised approach | 130,297 | 14,835 | 145,132 | 41,363 | 1,366 | 42,729 |
| 14 of which Corporate (including SME) | 16,223 | 243 | 16,466 | 12,728 | 216 | 12,944 |
| 15 of which Residential mortgage | 64,343 | - | 64,343 | 22,385 | - | 22,385 |
| 16 of which Sovereign | 11,080 | 239 | 11,319 | - | 239 | 239 |
| 17 of which Other exposures | 13,032 | 11,328 | 24,360 | 4,222 | 465 | 4,687 |
| 18 of which RBNZ regulated banking subsidiary | 25,619 | 3,025 | 28,644 | 2,028 | 446 | 2,474 |
| 19 Total credit and counterparty credit risk | 1,298,643 | 58,234 | 1,356,877 | 361,775 | 14,345 | 376,120 |
| 20 Credit valuation adjustment | | | | | | 4,991 |
| 21 Securitisation exposures in banking book | | | 15,963 | | | 2,535 |
| 22 Total subject to calculation of RWA for credit risk | | | 1,372,840 | | | 383,646 |
| 23 Market risk | | | | | | 7,719 |
| 24 Operational risk | | | | | | 53,773 |
| 25 Interest rate risk in the banking book | | | | | | 20,741 |
| 26 Floor adjustment | | | | | | 10,951 |
| 27 Total RWA | | | | | | 476,830 |
---
# DIS21: Comparison of modelled and standardised RWA
## CMS1: Comparison of modelled and standardised RWA at risk level
The table below outlines the comparison of modelled and standardised RWA at Risk level.
| Sep 25 | | RWA | | |
| --- | --- | --- | --- | --- | --- |
| | | RWA for modelled approaches that banks have supervisory approval to use $M | RWA for portfolios where standardised approaches are used $M | Total Actual RWA $M | RWA calculated using full standardised approach $M |
| 1 | Credit risk (excluding counterparty credit risk) | 309,697 | 40,401 | 350,098 | 539,346 |
| 2 | Counterparty credit risk | 12,128 | 1,098 | 13,226 | 26,205 |
| 3 | Credit valuation adjustment | | 3,768 | 3,768 | 3,768 |
| 4 | Securitisation exposures in the banking book | - | 2,491 | 2,491 | 2,491 |
| 5 | Market risk | 5,377 | 1,518 | 6,895 | 6,895 |
| 6 | Operational risk | | 53,773 | 53,773 | 53,773 |
| 7a | IRRBB | 24,797 | | 24,797 | |
| 7 | Residual RWA$^{1}$ | - | 3,499 | 3,499 | - |
| 8 | **Total** | **351,999** | **106,548** | **458,547** | **632,478** |
$^1$ Reflects the standardised floor adjustment.
| Jun 25 | | RWA | | |
| --- | --- | --- | --- | --- | --- |
| | | RWA for modelled approaches that banks have supervisory approval to use $M | RWA for portfolios where standardised approaches are used $M | Total Actual RWA $M | RWA calculated using full standardised approach $M |
| 1 | Credit risk (excluding counterparty credit risk) | 320,412 | 41,363 | 361,775 | 561,941 |
| 2 | Counterparty credit risk | 12,979 | 1,366 | 14,345 | 26,737 |
| 3 | Credit valuation adjustment | | 4,991 | 4,991 | 4,991 |
| 4 | Securitisation exposures in the banking book | - | 2,535 | 2,535 | 2,535 |
| 5 | Market risk | 6,526 | 1,193 | 7,719 | 7,719 |
| 6 | Operational risk | | 53,773 | 53,773 | 53,773 |
| 7a | IRRBB | 20,741 | | 20,741 | |
| 7 | Residual RWA | - | 10,951 | 10,951 | - |
| 8 | **Total** | **360,658** | **116,172** | **476,830** | **657,696** |
| Mar 25 | | RWA | | |
| --- | --- | --- | --- | --- | --- |
| | | RWA for modelled approaches that banks have supervisory approval to use $M | RWA for portfolios where standardised approaches are used $M | Total Actual RWA $M | RWA calculated using full standardised approach $M |
| 1 | Credit risk (excluding counterparty credit risk) | 314,528 | 42,612 | 357,140 | 554,974 |
| 2 | Counterparty credit risk | 12,604 | 1,205 | 13,809 | 27,287 |
| 3 | Credit valuation adjustment | | 4,736 | 4,736 | 4,736 |
| 4 | Securitisation exposures in the banking book | - | 2,396 | 2,396 | 2,396 |
| 5 | Market risk | 5,566 | 1,288 | 6,854 | 6,854 |
| 6 | Operational risk | | 50,648 | 50,648 | 50,648 |
| 7a | IRRBB | 21,357 | | 21,357 | |
| 7 | Residual RWA | - | 12,059 | 12,059 | - |
| 8 | **Total** | **354,055** | **114,944** | **468,999** | **646,895** |
---
In accordance with current prudential regulations, APRA (and Reserve Bank of New Zealand (RBNZ) in the New Zealand context) has approved ANZ’s use of the internal ratings-based approach for calculating the required capital for the majority of credit risk and counterparty credit risk exposures, with the standardised approach used for only a relatively small proportion of credit exposures. Noting the Suncorp Bank portfolio continues to calculate required capital under the standardised approach.
Methodological differences primarily arise due to the measurement of exposure at default (EAD) and the risk weights applied. In both cases, the treatment of credit risk mitigation, such as collateral, can have a significant effect. In line with the BCBS objectives, the internal model approach aims to balance the maintaining of prudent levels of capital while encouraging, where appropriate, the use of advanced risk management techniques.
### Risk weights
Under the internal ratings-based approach, internal estimates of the probability of default (PD) and the loss given default (LGD), and for wholesale exposures the maturity, are used as inputs to the risk-weight formula for calculating RWA. Additionally, a 1.1 scaling factor is applied to internal ratings-based exposures. Under the standardised approach, risk weights are less granular and are driven by ratings provided by external credit assessment institutions (ECAIs) or the amount of collateral with which an exposure is secured which is used in the loan to value ratio (LVR).
The material divergences between the Standardised and Internal Ratings-Based approaches are in the Corporate and Financial Institutions asset classes. Much of this comes about due to the limited availability of external credit ratings across the portfolios, including for high-quality Institutional customers. Under the Standardised rules for unrated exposures, the risk-weight outcome is relatively conservative with only minor difference in treatment between customer credit profiles, resulting in a material divergence to the Internal Ratings-Based outcome for the same portfolios.
The Retail Residential Mortgage sub-asset class also exhibits conservatism in the standardised approach driven by the prescribed risk weights primarily using LVR.
### EAD measurement
Prescribed credit conversion factors (CCF’s) applied to off-balance sheet amounts are mostly consistent across internal ratings-based and standardised approaches. Some differences are observed in non-revolving retail exposures (requiring 100% CCF in internal ratings-based) and revolving retail exposures (allowing an internal estimate under internal ratings-based).
---
# CMS2: Comparison of modelled and standardised RWA for credit risk at asset class level
The table below outlines the comparison of modelled and standardised RWA at asset class level.
This table has minor modifications from the original BCBS standard. Additional detail on these modifications has been provided in Appendix 1.
| Sep 25 | RWA for modelled approaches that banks have supervisory approval to use $M | RWA for portfolios where standardised approaches are used $M | Total Actual RWA $M | RWA calculated using full standardised approach $M |
| --- | --- | --- | --- | --- |
| 1 Sovereign | 10,107 | 10 | 10,117 | 11,532 |
| 2 Financial Institutions | 23,207 | 170 | 23,377 | 54,635 |
| 5 Corporates | 98,114 | 12,237 | 110,351 | 192,132 |
| of which: FIRB is applied | 34,388 | | 34,388 | 66,678 |
| of which: AIRB is applied$^{1}$ | 63,726 | | 63,726 | 113,154 |
| 6 Retail | 108,228 | 22,495 | 130,723 | 180,192 |
| of which: qualifying revolving retail | 3,032 | - | 3,032 | 6,335 |
| of which: other retail | 1,642 | 88 | 1,730 | 1,403 |
| of which: retail residential mortgages$^{2}$ | 94,135 | 22,407 | 116,542 | 162,051 |
| of which: retail SME | 9,419 | - | 9,419 | 10,403 |
| 7 Specialised lending$^{3}$ | 5,901 | 219 | 6,120 | 8,423 |
| 8 Others | - | 3,440 | 3,440 | 3,440 |
| 9 RBNZ regulated entities | 64,140 | 1,830 | 65,970 | 88,992 |
| 10 **Total** | **309,697** | **40,401** | **350,098** | **539,346** |
| Mar 25 | RWA for modelled approaches that banks have supervisory approval to use $M | RWA for portfolios where standardised approaches are used $M | Total Actual RWA $M | RWA calculated using full standardised approach $M |
| --- | --- | --- | --- | --- |
| 1 Sovereign | 10,983 | - | 10,983 | 12,634 |
| 2 Financial Institutions | 23,781 | 170 | 23,951 | 58,042 |
| 5 Corporates | 101,166 | 13,828 | 114,994 | 202,614 |
| of which: FIRB is applied | 34,587 | | 34,587 | 70,824 |
| of which: AIRB is applied | 66,579 | | 66,579 | 117,962 |
| 6 Retail | 109,096 | 22,137 | 131,233 | 177,453 |
| of which: qualifying revolving retail | 3,155 | - | 3,155 | 6,434 |
| of which: other retail | 1,636 | 167 | 1,803 | 1,479 |
| of which: retail residential mortgages | 94,747 | 21,970 | 116,717 | 159,147 |
| of which: retail SME | 9,558 | - | 9,558 | 10,393 |
| 7 Specialised lending | 6,929 | 143 | 7,072 | 10,006 |
| 8 Others | - | 4,329 | 4,329 | 4,329 |
| 9 RBNZ regulated entities | 62,573 | 2,005 | 64,578 | 89,896 |
| 10 **Total** | **314,528** | **42,612** | **357,140** | **554,974** |
$^1$ Includes a $4.2 billion RWA overlay relating to an IPRE risk weight floor.
$^2$ Retail Residential Mortgages RWA include a $3.1 billion overlay for the PD model introduced from 30 June 2024 reporting period.
$^3$ Specialised Lending exposures subject to supervisory slotting approach are those where the main servicing and repayment is from the asset being financed and includes project finance.
For key drivers of differences between the internally modelled amounts and those that would be disclosed under the standardised approach, see Table CMS1.
Suncorp Bank is a standardised ADI with Credit RWA calculated based on APS 112 and as such is reflected in the above table under RWA for portfolios where standardised approaches are used, predominantly in the Corporates and Residential Mortgages Asset Classes.
---
# DIS25: Composition of capital
The head of the Level 2 Group to which this prudential standard applies is ANZ BH Pty Ltd (ANZ Bank HoldCo).
Table CC1 of this chapter consists of a Common Disclosure template that assists users in understanding the differences between the application of the Basel III reforms in Australia and those rules as detailed in the document Finalised Basel III post-crisis reforms issued by the Bank for International Settlements. The capital disclosure template in this chapter is the post January 2018 version as ANZ is fully applying the Basel III regulatory adjustments, as implemented by APRA.
The information in the lines of the template has been mapped to ANZ’s Level 2 balance sheet, which adjusts for non-consolidated subsidiaries as required under APS 001 Definitions.
### Restrictions on transfers of capital within ANZ
ANZ operates branches and locally incorporated subsidiaries in many countries. These operations are capitalised at an appropriate level to cover the risks in the business and to meet local prudential requirements. This level of capitalisation may be enhanced to meet local taxation and operational requirements. Any repatriation of capital from subsidiaries or branches is subject to meeting the requirements of the local prudential regulator and/or the local central bank. Apart from ANZ’s operations in New Zealand, local country capital requirements do not impose any material call on ANZ’s capital base.
ANZ undertakes banking activities in New Zealand principally through its wholly owned subsidiary, ANZ Bank New Zealand Limited (ANZ New Zealand), which is subject to minimum capital requirements as set by the Reserve Bank of New Zealand (RBNZ). ANZ New Zealand maintains a buffer above the minimum capital base required by the RBNZ. This capital buffer has been calculated via the ICAAP undertaken for ANZ New Zealand, to ensure ANZ New Zealand is appropriately capitalised under stressed economic scenarios.
### Capital reporting and measurement
To ensure that an Authorised Deposit-taking Institution (ADI) is adequately capitalised on both a standalone and group basis, APRA adopts a tiered approach to the measurement of an ADI’s capital adequacy by assessing the ADI’s financial strength at three levels:
* Level 1 - being the ADI i.e., ANZBGL, consolidated with APRA-approved subsidiaries, to form the ADI’s Extended Licensed Entity (ELE).
* Level 2 - being the consolidated ANZBGL group for financial reporting purposes adjusted to exclude associates’ activities and certain subsidiaries referenced under APS 001 Definitions that undertake the following business activities:
* Insurance businesses (including friendly societies and health funds).
* Acting as manager, responsible entity, approved trustee, trustee or similar role in relation to funds management.
* Non-financial (commercial) operations.
* Securitisation special purpose vehicles to which assets have been transferred in accordance with APRA's requirements as set out in APS 120 Securitisation (APS 120).
* Level 3 – the consolidated ANZGHL group for financial reporting purposes.
ANZ measures capital adequacy monthly and reports for prudential purposes on a Level 1 and Level 2 basis. This Pillar 3 report is based on the Level 2 prudential structure.
APRA’s authority for ANZGHL to be a non-operating holding company (NOHC) of an ADI includes five conditions for ANZ’s capital management framework. Two of these are quantitative requirements being:
* ANZGHL must always ensure that the quality and quantity of the total capital of the Level 3 group is equivalent to, or greater than, the quality and quantity of the sum of the total capital of the consolidated ANZ Bank Group and the consolidated ANZ Non-Bank Group.
* ANZGHL must calculate and manage capital for the ANZ Non-Bank Group in accordance with an Economic Capital Model (ECM), which requires the amount of capital held, in the form of Common Equity Tier 1 (CET1), to be equal to or greater than the capital requirement as calculated under the ECM.
For further details on Level 3 Capital, refer to Note 24 Capital Management of ANZGHL’s 2025 Annual Report.
For details on key regulatory capital management developments, refer to Capital Management – Other Developments section of the Results Announcement.
For a list of all material subsidiaries and a brief description of their key activities, refer to Note 24 Controlled Entities of ANZBGL’s 2025 Annual Report.
---
# ANZ corporate structure:
```mermaid
graph TD
A[ANZ Group Holdings Limited shareholders] --> B[ANZ Group Holdings Limited (ANZGHL)
(non-operating holding company)
Shares listed on the ASX & NZX]
B --> C[ANZ BH Pty Ltd
(ANZ Bank HoldCo)]
B --> D[ANZ ServiceCo]
B --> E[ANZ Non-Bank HoldCo]
C --> F[Australia and New Zealand
Banking Group Limited
(ANZBGL)]
D --> G[Certain property assets]
E --> H[Minority interests in Worldline JV,
Lygon, TIN and Pollination$^{1}$]
E --> I[Other potential non-banking
businesses]
F --> J[Banking businesses / Banking
subsidiaries including ANZ NZ and
Suncorp Bank (Norfina)]
subgraph "ANZ Group"
subgraph "ANZ Bank Group"
C
F
J
end
subgraph "ANZ Non-Bank Group"
D
E
G
H
I
end
end
```
### CCA: Main features of regulatory capital instruments
Details of the main features of the ANZ Group’s regulatory capital instruments, together with the terms and conditions of those capital instruments, are available at https://www.anz.com/shareholder/centre/reporting/regulatory-disclosure/regulatory-capital-instruments/.
$^1$ Beneficial interests in 1835i trusts were divested in October 2025.
---
# CC1: Composition of regulatory capital
The table below shows the components of regulatory capital.
This table has minor modifications from the original BCBS standard. Additional detail on these modifications has been provided in Appendix 1.
| | | Amounts Sep 25 $M | Amounts Mar 25 $M | Source based on reference of the balance sheet under the regulatory scope of consolidation |
| --- | --- | --- | --- | --- |
| | **Common Equity Tier 1 capital: instruments and reserves** | | | |
| 1 | Directly issued qualifying common share (and equivalent for non-joint stock companies) capital plus related stock surplus | 26,750 | 26,725 | |
| 2 | Retained earnings | 43,884 | 43,638 | a |
| 3 | Accumulated other comprehensive income (and other reserves) | (1,173) | (750) | |
| 4 | Directly issued capital subject to phase-out from CET1 capital (only applicable to non-joint stock companies) | - | - | |
| 5 | Common share capital issued by subsidiaries and held by third parties (amount allowed in group CET1 capital) | 2 | 2 | |
| 6 | Common Equity Tier 1 capital before regulatory adjustments | 69,463 | 69,615 | |
| | **Common Equity Tier 1 capital: regulatory adjustments** | | | | |
| 7 | Prudent valuation adjustments | - | - | |
| 8 | Goodwill (net of related tax liability) | 4,165 | 4,117 | b |
| 9 | Other intangibles other than mortgage servicing rights (MSR) (net of related tax liability) | 1,434 | 1,482 | |
| 10 | Deferred tax assets (DTA) that rely on future profitability, excluding those arising from temporary differences (net of related tax liability) | - | - | |
| 11 | Cash flow hedge reserve | 170 | (219) | c |
| 12 | Shortfall of provisions to expected losses | 25 | 304 | |
| 13 | Securitisation gain on sale (as set out in [CAP30.14]) | - | - | |
| 14 | Gains and losses due to changes in own credit risk on fair valued liabilities | 231 | 257 | |
| 15 | Defined benefit pension fund net assets | 134 | 130 | |
| 16 | Investments in own shares (if not already subtracted from paid-in capital on reported balance sheet) | - | - | |
| 17 | Reciprocal cross-holdings in common equity | - | - | |
| 18 | Investments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation, where the bank does not own more than 10% of the issued share capital (amount above 10% threshold) | - | - | |
| 19 | Significant investments in the common stock of banking, financial and insurance entities that are outside the scope of regulatory consolidation (amount above 10% threshold) | - | - | |
| 20 | MSR (amount above 10% threshold) | - | - | |
| 21 | DTA arising from temporary differences (amount above 10% threshold, net of related tax liability) | - | - | |
| 22 | Amount exceeding the 15% threshold | - | - | |
| 23 | of which: significant investments in the common stock of financials | - | - | |
| 24 | of which: MSR | - | - | |
| 25 | of which: DTA arising from temporary differences | - | - | |
| 26 | National specific regulatory adjustments | 8,120 | 8,315 | |
| 26a | of which: treasury shares | - | - | |
| 26b | of which: Offset to dividends declared under a dividend reinvestment plan (DRP), to the extent to that the dividends are used to purchase new ordinary shares issued by the ADI | - | - | |
| 26c | of which: deferred fee income | (546) | (496) | d |
| 26d | of which: equity investment in financial institutions not reported in rows 18, 19 and 23 | 2,333 | 2,926 | |
| 26e | of which: deferred tax assets not reported in rows 10, 21 and 25 | 3,720 | 3,412 | |
| 26f | of which: capitalised expenses | 2,550 | 2,430 | |
| 26g | of which: investments in commercial (non-financial) entities that are deducted under APRA rules | 5 | 5 | |
| 26h | of which: covered bonds in excess of asset cover in pools | - | - | |
| 26i | of which: undercapitalisation of a non-consolidated subsidiary | - | - | |
| 26j | of which: other national specific regulatory adjustments not reported in rows 26a to 26i | 58 | 38 | |
| 27 | Regulatory adjustments applied to Common Equity Tier 1 capital due to insufficient Additional Tier 1 and Tier 2 capital to cover deductions | - | - | |
| 28 | Total regulatory adjustments to Common Equity Tier 1 capital | 14,279 | 14,386 | |
| 29 | Common Equity Tier 1 capital (CET1) | 55,184 | 55,229 | |
---
# CC1: Composition of regulatory capital (continued)
| | | Amounts Sep 25 $M | Amounts Mar 25 $M | Source based on reference of the balance sheet under the regulatory scope of consolidation |
| --- | --- | --- | --- | --- |
| | **Additional Tier 1 capital: instruments** | | | |
| 30 | Directly issued qualifying additional Tier 1 instruments plus related stock surplus | 7,526 | 7,602 | |
| 31 | of which: classified as equity under applicable accounting standards | - | - | |
| 32 | of which: classified as liabilities under applicable accounting standards | 7,526 | 7,602 | |
| 33 | Directly issued capital instruments subject to phase out from Additional Tier 1 Capital | - | - | |
| 34 | Additional Tier 1 instruments (and CET1 instruments not included in row 5) issued by subsidiaries and held by third parties (amount allowed in group additional Tier 1 capital) | - | - | |
| 35 | of which: instruments issued by subsidiaries subject to phase out | - | - | |
| 36 | Additional Tier 1 capital before regulatory adjustments | 7,526 | 7,602 | |
| | **Additional Tier 1 capital: regulatory adjustments** | | | | |
| 37 | Investments in own additional Tier 1 instruments | - | - | |
| 38 | Reciprocal cross-holdings in additional Tier 1 instruments | - | - | |
| 39 | Investments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation, where the bank does not own more than 10% of the issued common share capital of the entity (amount above 10% threshold) | - | - | |
| 40 | Significant investments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation | 155 | 155 | e |
| 41 | National specific regulatory adjustments | 14 | 4 | |
| 41a | of which: holdings of capital instruments in group members by other group members on behalf of third parties | - | - | |
| 41b | of which: investments in the capital of financial institutions that are outside the scope of regulatory consolidations not reported in rows 39 and 40 | 14 | 4 | |
| 41c | of which: other national specific regulatory adjustments not reported in rows 41a and 41b | - | - | |
| 42 | Regulatory adjustments applied to additional Tier 1 capital due to insufficient Tier 2 capital to cover deductions | - | - | |
| 43 | Total regulatory adjustments to additional Tier 1 capital | 169 | 159 | |
| 44 | Additional Tier 1 capital (AT1) | 7,357 | 7,443 | |
| 45 | Tier 1 capital (T1 = CET1 + AT1) | 62,541 | 62,672 | |
| | **Tier 2 capital: instruments and provisions** | | | | |
| 46 | Directly issued qualifying Tier 2 instruments plus related stock surplus | 32,397 | 31,492 | |
| 47 | Directly issued capital instruments subject to phase out from Tier 2 Capital | - | - | |
| 48 | Tier 2 instruments (and CET1 and AT1 instruments not included in rows 5 or 34) issued by subsidiaries and held by third parties (amount allowed in group Tier 2) | - | - | |
| 49 | of which: instruments issued by subsidiaries subject to phase out | - | - | |
| 50 | Provisions | 1,710 | 1,639 | |
| 51 | Tier 2 capital before regulatory adjustments | 34,107 | 33,131 | |
| | **Tier 2 capital: regulatory adjustments** | | | | |
| 52 | Investments in own Tier 2 instruments | 100 | 100 | |
| 53 | Reciprocal cross-holdings in Tier 2 instruments and other TLAC liabilities | - | - | |
| 54 | Investments in the capital and other TLAC liabilities of banking, financial and insurance entities that are outside the scope of regulatory consolidation, where the bank does not own more than 10% of the issued common share capital of the entity (amount above 10% threshold) | - | - | |
| 55 | Significant investments in the capital and other TLAC liabilities of banking, financial and insurance entities that are outside the scope of regulatory consolidation (net of eligible short positions) | - | - | |
| 56 | National specific regulatory adjustments | 197 | 200 | |
| 56a | of which: holdings of capital instruments in group members by other group members on behalf of third parties | - | - | |
| 56b | of which: investments in the capital of financial institutions that are outside the scope of regulatory consolidation not reported in rows 54 and 55 | 174 | 192 | |
| 56c | of which: other national specific regulatory adjustments not reported in rows 56a and 56b | 23 | 8 | |
| 57 | Total regulatory adjustments to Tier 2 capital | 297 | 300 | |
| 58 | Tier 2 capital | 33,810 | 32,831 | |
| 59 | Total regulatory capital (= Tier 1 + Tier2) | 96,351 | 95,503 | |
| 60 | Total risk-weighted assets | 458,547 | 468,999 | |
---
# CC1: Composition of regulatory capital (continued)
| | | Amounts Sep 25 $M | Amounts Mar 25 $M | Source based on reference of the balance sheet under the regulatory scope of consolidation |
| --- | --- | --- | --- | --- |
| | **Capital adequacy ratios and buffers** | | | |
| 61 | Common Equity Tier 1 capital (as a percentage of risk-weighted assets) | 12.0% | 11.8% | |
| 62 | Tier 1 capital (as a percentage of risk-weighted assets) | 13.6% | 13.4% | |
| 63 | Total capital (as a percentage of risk-weighted assets) | 21.0% | 20.4% | |
| 64 | Institution-specific buffer requirement (capital conservation buffer plus countercyclical buffer requirements plus higher loss absorbency requirement, expressed as a percentage of risk-weighted assets) | 9.970% | 9.972% | |
| 65 | of which: capital conservation buffer requirement$^1$ | 4.75% | 4.75% | |
| 66 | of which: bank-specific countercyclical buffer requirement | 0.7199% | 0.7219% | |
| 67 | of which: higher loss absorbency requirement | - | - | |
| 68 | Common Equity Tier 1 capital (as a percentage of risk-weighted assets) available after meeting the bank’s minimum capital requirements | 7.5% | 7.3% | |
| | **National minima (if different from Basel III)** | | | | |
| 69 | National minimum Common Equity Tier 1 capital adequacy ratio (if different from Basel III minimum) | - | - | |
| 70 | National minimum Tier 1 capital adequacy ratio (if different from Basel III minimum) | - | - | |
| 71 | National minimum Total capital adequacy ratio (if different from Basel III minimum) | - | - | |
| | **Amounts below the thresholds for deduction (before risk-weighting)** | | | | |
| 72 | Non-significant investments in the capital and other TLAC liabilities of other financial entities | 263 | 270 | |
| 73 | Significant investments in the common stock of financial entities | 2,258 | 2,852 | |
| 74 | MSR (net of related tax liability) | - | - | |
| 75 | DTA arising from temporary differences (net of related tax liability) | 3,720 | 3,412 | |
| | **Applicable caps on the inclusion of provisions in Tier 2 capital** | | | | |
| 76 | Provisions eligible for inclusion in Tier 2 capital in respect of exposures subject to standardised approach (prior to application of cap) | 351 | 352 | |
| 77 | Cap on inclusion of provisions in Tier 2 capital under standardised approach | 531 | 570 | |
| 78 | Provisions eligible for inclusion in Tier 2 capital in respect of exposures subject to internal ratings-based approach (prior to application of cap) | 1,359 | 1,287 | |
| 79 | Cap on inclusion of provisions in Tier 2 capital under internal ratings-based approach | 1,948 | 1,980 | |
$^1$ Includes 1.0% buffer applied by APRA to ADIs deemed as domestic systemically important.
See commentary on drivers of changes in Capital over the reporting period in table KM1: Key Metrics.
---
# CC2: Reconciliation of regulatory capital to balance sheet
The table below shows the bank’s regulatory balance sheet and shows the link between a bank’s balance sheet in its published financial statements and the numbers that are used in the composition of capital disclosure template set out in CC1.
This table has minor modifications from the original BCBS standard. Additional detail on these modifications has been provided in Appendix 1.
| Assets | Balance sheet as in published financial statements As at Sep 25 $M | Under regulatory scope of consolidation As at Sep 25 $M | Reference |
| --- | --- | --- | --- |
| 1 | Cash and Cash Equivalents | 155,209 | 155,208 | |
| 2 | Settlement Balances owed to ANZ | 23,394 | 23,394 | |
| 3 | Collateral Paid | 9,831 | 9,831 | |
| 4 | Trading securities | 48,248 | 48,248 | |
| 4a | of which: Financial Institutions capital instruments | | - | |
| 5 | Derivative financial instruments | 47,480 | 47,480 | |
| 6 | Investment Securities | 165,540 | 165,390 | |
| 6a | of which: significant investment in financial institutions equity instruments | | 843 | |
| 6b | of which: non-significant investment in financial institutions equity instruments | | 75 | |
| 6c | of which: Other entities equity investments | | 5 | |
| 6d | of which: collectively assessed provision | | (34) | |
| 8 | Net loans and advances | 829,986 | 824,588 | |
| 8a | of which: deferred fee income | | (546) | d |
| 8b | of which: collectively assessed provision | | (3,512) | |
| 8c | of which: individual provisions | | (362) | |
| 8d | of which: capitalised brokerage & Loan/Lease origination fees | | 4,500 | |
| 8f | of which: CET1 margin lending adjustment | | - | |
| 8g | of which: AT1 margin lending adjustment | | - | |
| 9 | Regulatory deposits | 541 | 541 | |
| 11 | Due from controlled entities | - | 57 | |
| 11a | of which: Significant investments in the Tier 2 capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation | | - | |
| 12 | Shares in controlled entities | - | 490 | |
| 12a | of which: Investment in deconsolidated financial subsidiaries | | 335 | |
| 12b | of which: AT1 significant investment in banking, financial and insurance entities that are outside the scope of regulatory consolidation | | 155 | e |
| 13 | Investment in associates | 1,140 | 1,140 | |
| 13a | of which: Financial Institutions | | 1,140 | |
| 14 | Current tax assets | 25 | 25 | |
| 15 | Deferred tax assets | 3,327 | 3,322 | |
| 16 | Goodwill and other intangible assets | 5,762 | 5,703 | |
| 16a | of which: Goodwill | | 4,165 | b |
| 16b | of which: Software | | 996 | |
| 16c | of which: other intangible assets (WDv) | | 542 | |
| 18 | Premises and equipment | 2,283 | 2,283 | |
| 19 | Other assets | 4,905 | 4,754 | |
| 19a | of which: Defined benefit superannuation fund net assets | | 184 | |
| 19b | of which: Capitalised Costs of Disposal | | 58 | |
| | **Total assets** | **1,297,671** | **1,292,454** | |
Balances under “of which” are disclosed in column: Under regulatory scope of consolidation.
---
# CC2: Reconciliation of regulatory capital to balance sheet (continued)
| Liabilities | Balance sheet as in published financial statements As at Sep 25 $M | Under regulatory scope of consolidation As at Sep 25 $M | Reference |
| --- | --- | --- | --- |
| 20 | Settlement Balances owed by ANZ | 31,144 | 31,144 | |
| 21 | Collateral Received | 7,428 | 7,428 | |
| 22 | Deposits and other borrowings | 956,401 | 956,436 | |
| 23 | Derivative financial instruments | 43,902 | 43,902 | |
| 24 | Due to controlled entities | - | 698 | |
| 25 | Current tax liabilities | 537 | 475 | |
| 26 | Deferred tax liabilities | 226 | 226 | |
| 26a | of which: related to intangible assets | | 162 | |
| 26b | of which: related to capitalised expenses | | 8 | |
| 26c | of which: related to defined benefit superannuation fund | | 50 | |
| 30 | Payables and other liabilities | 15,147 | 14,879 | |
| 31 | Employee Entitlements | 688 | 688 | |
| 32 | Provisions | 2,479 | 2,482 | |
| 32a | of which: collectively assessed provision | | 832 | |
| 32b | of which: individually assessed provision | | 37 | |
| 33 | Debt Issuances | 169,274 | 163,877 | |
| 33a | of which: Directly issued qualifying Additional Tier 1 instruments | | 7,452 | |
| 33b | of which: Additional Tier 1 Instruments | | - | |
| 33d | of which: Directly issued qualifying Tier 2 instruments | | 33,811 | |
| | **Total liabilities** | **1,227,226** | **1,222,235** | |
| | **Net Assets** | **70,445** | **70,219** | |
| Shareholders’ equity | | | |
| 34 | Ordinary Share Capital | 27,053 | 26,976 | |
| 34a | of which: Share reserve | | 226 | |
| 35 | Reserves | (1,379) | (1,380) | |
| 35a | of which: Cash flow hedging reserves | | 170 | c |
| 36 | Retained earnings | 44,032 | 43,884 | a |
| 37 | Share capital and reserves attributable to shareholders of the company | 69,706 | 69,480 | |
| 38 | Non-controlling interests | 739 | 739 | |
| 39 | **Total shareholders’ equity** | **70,445** | **70,219** | |
Balances under “of which” are disclosed in column: Under regulatory scope of consolidation.
---
# DIS30: Links between financial statements and regulatory exposures
## LIA: Explanations of differences between accounting and regulatory exposure amounts
(a) Origins of significant differences between the carrying values in financial statements and Carrying values under scope of regulatory consolidation are identified as the non-consolidated subsidiaries, consolidated for accounting in the Banking Group and excluded from the APRA Level 2 Group as per APS 001 Attachment B.
(b) Origins of differences between carrying values and amount considered for regulatory purposes are shown in table LI2: Main sources of differences between regulatory exposure amounts and carrying values in financial statements.
(c) Refer to Note 18: Fair value approach and valuation techniques of the ANZBGL’s 2025 Annual Report for information on the Group’s valuation methodologies for financial instruments.
(d) Investments in insurance are deducted from capital in accordance with APS 110.
(e) When calculating ANZ’s capital adequacy ratio no surplus capital held in insurance subsidiaries was recognised for level 2 capital reporting.
Refer to Appendix 2 for details of entities included within the accounting scope of consolidation but excluded from regulatory consolidation.
---
# LI1: Differences between accounting and regulatory scopes of consolidation and mapping of financial statement categories with regulatory risk categories
The table below outlines the differences in the basis of consolidation for accounting and regulatory purposes. It provides an allocation of the balance sheet line items reported under the scope of regulatory consolidation between the different regulatory risk frameworks.$^{1}$
| Sep 25 | Carrying values as reported in published financial statements $M | Carrying values under scope of regulatory consolidation $M | Subject to credit risk framework $M | Subject to counterparty credit risk framework $M | Subject to the securitisation framework $M | Subject to the market risk framework $M | Not subject to capital requirements or subject to deduction from capital $M |
| --- | --- | --- | --- | --- | --- | --- | --- |
| **Assets** | | | | | | | |
| 1 Cash and Cash Equivalents | 155,209 | 155,208 | 101,420 | 56,428 | - | 49,989 | - |
| 2 Settlement Balances owed to ANZ | 23,394 | 23,394 | - | - | - | 17,559 | 5,835 |
| 3 Collateral Paid | 9,831 | 9,831 | - | 9,831 | - | - | - |
| 4 Trading securities | 48,248 | 48,248 | 21,460 | - | - | 33,613 | - |
| 5 Derivative financial instruments | 47,480 | 47,480 | - | 47,424 | 56 | 46,170 | - |
| 6 Investment Securities | 165,540 | 165,390 | 162,997 | - | 1,470 | - | 923 |
| 8 Net loans and advances | 829,986 | 824,588 | 783,608 | 25,390 | 11,635 | 34,047 | 3,954 |
| 9 Regulatory deposits | 541 | 541 | 541 | - | - | - | - |
| 10 Assets held for sale | - | - | - | - | - | - | - |
| 11 Due from controlled entities | - | 57 | 57 | - | - | - | - |
| 12 Shares in controlled entities | - | 490 | - | - | - | - | 490 |
| 13 Investment in associates | 1,140 | 1,140 | - | - | - | - | 1,140 |
| 14 Current tax assets | 25 | 25 | 25 | - | - | - | - |
| 15 Deferred tax assets | 3,327 | 3,322 | - | - | - | - | 3,322 |
| 16 Goodwill and other intangible assets | 5,762 | 5,703 | - | - | - | - | 5,703 |
| 18 Premises and equipment | 2,283 | 2,283 | 2,283 | - | - | - | - |
| 19 Other assets | 4,905 | 4,754 | 4,512 | - | - | - | 242 |
| 20 **Total assets** | **1,297,671** | **1,292,454** | **1,076,903** | **139,073** | **13,161** | **181,378** | **21,609** |
$^1$ Exposures may be subject to more than one risk framework and when this occurs the carrying value is reported in all columns that it attracts a capital charge. As a result, the sum of values in columns corresponding to the risk frameworks does not always equal the total carrying value under the scope of regulatory consolidation.
---
# LI1: Differences between accounting and regulatory scopes of consolidation and mapping of financial statement categories with regulatory risk categories (continued)$^{1}$
| Sep 25 | Carrying values as reported in published financial statements $M | Carrying values under scope of regulatory consolidation $M | Subject to credit risk framework $M | Subject to counterparty credit risk framework $M | Subject to the securitisation framework $M | Subject to the market risk framework $M | Not subject to capital requirements or subject to deduction from capital $M |
| --- | --- | --- | --- | --- | --- | --- | --- |
| **Liabilities** | | | | | | | |
| 1 Settlement Balances owed by ANZ | 31,144 | 31,144 | - | - | - | 19,991 | 11,153 |
| 2 Collateral Received | 7,428 | 7,428 | - | 7,428 | - | - | - |
| 3 Deposits and other borrowings | 956,401 | 956,436 | - | 56,139 | - | 101,951 | 854,485 |
| 4 Derivative financial instruments | 43,902 | 43,902 | - | 43,902 | - | 42,202 | - |
| 5 Due to controlled entities | - | 698 | - | - | - | - | 698 |
| 6 Current tax liabilities | 537 | 475 | - | - | - | - | 475 |
| 7 Deferred tax liabilities | 226 | 226 | - | - | - | - | 226 |
| 11 Employee Entitlements | 688 | 688 | - | - | - | - | 688 |
| 12 Provisions | 2,479 | 2,482 | - | - | - | - | 2,482 |
| 13 Payables and other liabilities | 15,147 | 14,879 | - | - | - | 3,960 | 10,919 |
| 14 Debt Issuances | 169,274 | 163,877 | - | - | - | 103 | 163,774 |
| 15 **Total liabilities** | **1,227,226** | **1,222,235** | **-** | **107,469** | **-** | **168,207** | **1,044,900** |
$^1$ Exposures may be subject to more than one risk framework and when this occurs the carrying value is reported in all columns that it attracts a capital charge. As a result, the sum of values in columns corresponding to the risk frameworks does not always equal the total carrying value under the scope of regulatory consolidation.
---
# LI2: Main sources of differences between regulatory exposure amounts and carrying values in financial statements
The table below reconciles the main differences between the accounting carrying values under the regulatory scope of consolidation and the exposures used for regulatory purposes, split as per the regulatory risk framework.$^{1}$ The regulatory risk framework includes the following additional components:
* Off-balance sheet amounts and differences due to credit conversion factors (CCF): off-balance sheet amounts consist of items such as undrawn commitments, financial guarantees and other off-balance sheet products. Prescribed regulatory CCFs are applied to these amounts based on their nature to form a regulatory exposure amount
* Valuation differences: for counterparty credit risk primarily relates to the regulatory valuation of derivatives and securities financing transactions (SFTs). The regulatory valuation reflects the inclusion of potential future exposure (PFE) and a 1.4 alpha multiplier for the standardised approach to counterparty credit risk (CCR) approach. Within credit risk are differences related to valuations including a larger interest accrual considered in the regulatory risk framework
* Differences due to netting rules: relates to the differences in netting financial assets with financial liabilities which differs between the accounting and regulatory risk framework
* Consideration of provisions: relates to the grossing up of provisions associated with IRB exposures
| Sep 25 | Total $M | Credit risk framework $M | Counterparty credit risk framework $M | Securitisation framework $M | Market risk framework $M |
| --- | --- | --- | --- | --- | --- |
| 1 Asset carrying value amount under scope of regulatory consolidation (as per Template LI1) | 1,270,845 | 1,076,903 | 139,073 | 13,161 | 181,378 |
| 2 Liabilities carrying value amount under regulatory scope of consolidation (as per Template LI1) | 177,335 | - | 107,469 | - | 168,207 |
| 3 Total net amount under regulatory scope of consolidation (Row 1 – Row 2) | 1,093,510 | 1,076,903 | 31,604 | 13,161 | 13,171 |
| 4 Off-balance sheet amounts | 291,027 | 288,621 | - | 2,406 | |
| 5 Differences in valuations | 43,451 | 2,233 | 41,108 | 111 | |
| 6 Differences due to different netting rules, other than those already included in row 2 | (18,117) | - | (18,116) | - | |
| 7 Differences due to consideration of provisions | 3,870 | 3,870 | - | - | |
| 8 Differences due to prudential filters | - | - | - | - | |
| 9 Differences due to credit conversion factors | (122,801) | (122,801) | - | - | |
| 10 Other Differences | - | - | - | - | |
| 11 Exposure amounts considered for regulatory purposes | 1,290,940 | 1,248,826 | 54,596 | 15,678 | |
$^1$ The total reflects carrying values under regulatory consolidation, excluding items not subject to capital requirements or deducted from capital (LI1). Accordingly, the total will not align to the sum of the Credit, Securitisation, Counterparty Credit, and Market Risk frameworks.
---
# DIS31: Asset encumbrance
## ENC: Asset encumbrance
The table below differentiates assets which are used to support funding or collateral needs (“encumbered assets”) as at 30 September 2025 from those assets which are “unencumbered”. Each of the reported values in the table is based on the carrying amount on the balance sheet using period-end values.
The Group mainly has the following sources of encumbrance:
* Assets pledged under repurchase agreements: Collateralised financing transactions through repurchase agreements are a form of short-term funding. The asset used as collateral is debt securities.
* Covered bonds: The Group operates various global covered bond programs to raise funding in primary markets. Residential mortgages are used as collateral.
* External Securitisation: Residential mortgages securitised under the Group’s securitisation program.
* Collateral is used to mitigate risks arising from derivative and hedging arrangements.
As at 30 September 2025, ANZ Group has $111.0 billion of encumbered assets, which is predominantly Debt securities $57.6 billion and Net loans and advances of $37.9 billion.
The Group has updated its March 2025 disclosures related to collateral paid and other assets. The collateral paid disclosure used a conservative method that showed the full gross collateral posted. As part of the update, $7,345 million has been reclassified from Encumbered collateral paid to Unencumbered other assets. Additionally, $1,579 million in certain property assets under a sale and leaseback arrangement have been reclassified as encumbered in other assets, following an assessment of the transaction’s accounting treatment.
| Sep 25 | Encumbered assets $M | Unencumbered assets $M | Total$^{3}$ $M |
| --- | --- | --- | --- |
| 1 Assets of the reporting institution | 110,958 | 1,186,713 | 1,297,671 |
| 2 Debt securities$^{1}$ | 57,574 | 238,033 | 295,607 |
| 3 Net Loans and advances | 37,882 | 766,714 | 804,596 |
| 4 of which: Covered Bonds | 32,510 | - | 32,510 |
| 5 of which: Securitisations | 5,372 | - | 5,372 |
| 6 Collateral posted in connection with derivatives contracts$^{2}$ | 13,912 | - | 13,912 |
| 7 Other assets | 1,590 | 181,966 | 183,556 |
| Mar 25 | Encumbered assets$^{4}$ $M | Unencumbered assets$^{4}$ $M | Total$^{4}$ $M |
| --- | --- | --- | --- |
| 1 Assets of the reporting institution | 111,959 | 1,191,012 | 1,302,971 |
| 2 Debt securities | 59,658 | 222,380 | 282,038 |
| 3 Net Loans and advances | 37,059 | 767,352 | 804,411 |
| 4 of which: Covered Bonds | 32,403 | - | 32,403 |
| 5 of which: Securitisations | 4,656 | - | 4,656 |
| 6 Collateral posted in connection with derivatives contracts | 13,663 | - | 13,663 |
| 7 Other assets | 1,579 | 201,280 | 202,859 |
$^1$ Including securities held by reverse repurchase agreements.
$^2$ Initial margins required to open the position and any collateral placed for the market value of derivatives transactions (cash and non-cash collateral).
$^3$ Total Assets from the consolidated balance sheet as reported in the ANZBGL Group’s financial statements.
$^4$ March comparative numbers have been restated to align with the change in methodology in the current period.
---
# DIS40: Credit risk
## CRA: General qualitative information about credit risk
ANZ operates a diverse business structure with three major customer segments (retail banking, commercial banking, and institutional banking), across six divisions, 29 markets, and a broad cross-section of industries. Credit risk frameworks and policies are adopted across all segments and geographies in which ANZ operates, but align as necessary to accommodate the local regulatory, business and customer environment.
### Definition of credit risk
Credit risk is 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 deterioration of value.
### Portfolios with approval to use the Internal Ratings based (IRB) approach
ANZ has APRA approval to use the four approaches under the Internal Ratings based approach to credit risk, within APS 113.
As an IRB bank, ANZ’s internal models generate the inputs into regulatory capital adequacy under the four approaches (see below), to determine the risk weighted asset calculations for both on and off-balance sheet committed exposures and expected loss (EL) calculations.
ANZ’s internal models are used to generate three key risk components that serve as inputs to the IRB approach to credit risk:
* Probability of Default (PD) is an estimate of the level of risk of borrower defaulting over a 12-month horizon;
* Exposure at Default (EAD) represents the expected outstanding at the time of default, including current outstandings, and an estimate of additional drawings prior to default under committed limits); and
* Loss Given Default (LGD) is an estimate of the economic loss on a credit exposure, incurred as a consequence of obligor default, expressed as a percentage of the facility’s EAD.
Effective maturity (M) is also calculated as an input to the risk weighted asset calculation for wholesale asset classes.
**Internal Rating Based Approaches:**
* Foundation IRB (FIRB) - ANZ provide its own estimates of PD and M, and use APRA supervisory estimates for LGD and EAD;
* Advanced IRB (AIRB) (Wholesale) - ANZ use its own estimates of PD, LGD (excluding senior unsecured and subordinated corporate exposures) and M, and use APRA supervisory estimates for EAD;
* Advanced IRB (AIRB) (Retail) - ANZ use its own estimates of PD, LGD and EAD (excluding non-revolving retail exposures for which ANZ use APRA supervisory EAD estimates); and
* Supervisory slotting approach - ANZ use its own mapping of credit exposures to the supervisory slotting categories, and APRA supervisory risk weights and APRA supervisory estimates for EAD.
### Portfolios subject to standardised approach to credit risk
Exposures are either prescribed the standardised approach, such as Non-standard mortgages, Margin lending and Fixed Assets, or are subject to the standardised approach on the basis ANZ is not approved to use the IRB approach to credit risk.
Where ANZ does not have APRA approval to apply the IRB approach to specific portfolios, ANZ applies the Standardised approach to credit risk, under APS 112. This relates to portfolios where available data does not enable development of advanced internal models for PD, LGD and EAD estimates.
Suncorp Bank is a standardised ADI and calculates Credit Risk Capital per APS 112.
Under the Standardised approach, exposures are mapped to regulatory risk weights, mainly based on:
* Loan to Value Ratio (LVR) for exposures secured by property (after accounting for dependency on property-related cash flows for wholesale exposures); or
* the type of counterparty such as: Sovereign, Bank, Corporate and its external rating where the borrower is externally rated.
For these counterparties, external ratings are used as inputs into the RWA calculation. Refer to table CRD: Qualitative disclosure on banks’ use of external credit rating for further details.
ANZ applies its full normal risk measurement and management framework to these segments for internal management purposes. Standardised segments will be migrated to IRB (AIRB or FIRB) if they reach a volume that generates sufficient data for development of advanced internal models.
ANZ also applies the above approach to meeting the new requirement that IRB ADIs calculate and disclose RWA under the standardised approach.
### Criteria and approach used for defining credit risk management policy and for setting credit risk limits
ANZ has a comprehensive framework to manage Credit Risk. The framework is top-down, being defined by credit principles and policies. Credit policies, requirements and procedures cover all aspects of the credit life cycle such as transaction structuring, risk grading, initial approval, ongoing management and problem debt management, as well as specialist policy topics.
---
The effectiveness of the credit risk management framework is assessed through various compliance and monitoring processes. These, together with portfolio selection and risk appetite setting, define and guide the credit process, organisation and staff. Refer to table OVA: Bank risk management approach for further details on the Risk Appetite Statement (RAS).
### Structure and organisation of the credit risk function
The Credit and Market Risk Committee (CMRC) is a senior executive level committee responsible for the oversight and control of credit, market and material financial risks across the ANZ Group. The Credit Rating System Oversight Committee (CRSOC) supports the CMRC, by providing oversight and control of the internal ratings system for credit risk in the wholesale and retail sectors, including credit model approvals and performance monitoring.
The primary responsibility for prudent and profitable management of credit risk assets and customer relationships rests with the business units. Business units are supported by an independent credit risk management function which is staffed by risk specialists. Independence is achieved by having all second line credit risk staff ultimately report to the Chief Risk Officer (CRO). ANZ’s Risk function (Risk) performs key roles in portfolio management such as approving sector and customer appetite, development and validation of credit risk measurement systems, loan asset quality reporting, sensitivity analysis and stress testing in response to economic scenarios and development of the overall governance framework including credit policies and requirements, and adherence to regulations.
The authority to make credit decisions is delegated by the Board to the CEO who in turn delegates authority to the CRO. The CRO in turn delegates some of their credit discretion to individuals as part of a ‘cascade’ of authority from senior to the most junior credit officers via the Credit Approval Discretion (CAD) Framework. Within ANZ’s wholesale business, credit approval for material judgemental lending is made on a ‘dual approval’ basis, jointly by the business writer in the business unit and the respective independent credit risk officer. Individuals must be suitably skilled and accredited in order to be granted and retain Credit Approval Discretion. Credit Approval Discretions are reviewed on an annual basis and may be varied based on the holder’s performance. Credit decisions are subject to Division level hind sighting using a risk-based approach, with material approvals oversighted by the Group CRO, CRO Institutional and the BRC.
Programmed credit assessment typically covers Retail and some small business lending and refers to the automated assessment of credit applications using a combination of scoring (application and behavioural), policy rules and external credit reporting information. Where an application does not meet the automated assessment criteria it will be referred out for manual assessment.
### Suncorp Bank
Credit Risk Authorities that are delegated by the Suncorp Bank Board in the Credit Risk Management Policy (CRMP) to the ANZ Group CRO are, in turn, delegated to the CRO Suncorp Bank to facilitate credit risk management and day to day operations of Suncorp Bank. Authorities delegated by the Suncorp Bank Board in the CRMP to the CEO Suncorp Bank are partially delegated to the CRO Suncorp Bank. The CEO Suncorp Bank is ultimately accountable for the acceptance of credit risk through execution of credit risk authority on behalf of the Bank.
The Chief Risk Officer Suncorp Bank (CRO Suncorp Bank) establishes, approves, and oversees all Credit Policies and Underwriting Standards, the Credit Risk Authority Framework (CRAF), the Delegated Credit Authority Framework (DCAF) and the Concentration Risk Management Framework (CRMF). This authority has been delegated to the CRO Suncorp Bank by the ANZ Group CRO. The CEO Suncorp Bank and ANZ Group CRO delegate credit authorities to suitability accredited employees within the parameters of the CRMP and CRAF.
### Portfolio direction and performance
The credit risk management framework contains several portfolio direction and performance tools which enable Risk to play a fundamental role in monitoring the direction and performance of the portfolio. These include:
* Group and divisional level risk appetite strategies, business writing strategies and Sector and Product Transaction Guidelines which are prepared by the businesses and set out appetite, planned portfolio growth, capital usage and risk/return profile, and also identify areas that may require attention to mitigate and improve risk management. In all cases, Risk plays an active role for the review and challenge of appetite settings, industry deep dives and stress testing reports;
* Wholesale portfolio Red/Amber/Green (RAG) ratings for industries and portfolio reviews are re-assessed on a quarterly basis ensuring ANZ’s view of risks and potential impacts dynamically respond to changing external market conditions; and
* Wholesale portfolio exposure concentration limits, covering single customers, and customer groups with economic interdependence, industries and cross border risk, to maintain a diversified portfolio.
ANZ uses portfolio monitoring and analysis tools, technologies and techniques to assist with portfolio risk assessment and management. These assist in:
* Monitoring, analysing and reporting ANZ’s credit risk profile and progress in meeting portfolio objectives;
* Calculating and reporting ANZ’s collective provision, economic loss, regulatory risk weighted assets (RWA) and regulatory expected loss (EL);
* Assessing impact of emerging issues, and conducting ad-hoc investigations and deep dive portfolio reviews;
* Validating rating/scoring tools and credit estimates; and
* Ongoing review and refinement of ANZ's credit risk measurement and policy framework.
---
### Relationships between the credit risk management, risk compliance and internal audit functions
The credit risk management function at ANZ interacts closely with the broader Risk, compliance and internal audit functions to ensure a robust control environment.
The Group has an independent risk management function, headed by the CRO- the second line of defence. The Risk function at both divisional/functional and group levels, undertakes oversight, independent review, and assurance of business activities. The Group Compliance function develop and maintain relevant policies, provide subject matter expertise, and monitor compliance with the Group's Risk Appetite Statements.
The third line of defence, Internal Audit, provides independent and objective assurance regarding policy and regulatory compliance, performing objective assessments across all geographies and divisions, and independently reviewing the adequacy of the frameworks. Additionally, Internal Audit reports directly to the Board Audit Committee, evaluating the Risk Management Framework annually and facilitating comprehensive reviews every three years. Collectively, these functions monitor and report to executive management, the Board, and regulators, ensuring effective credit risk management within ANZ.
### Scope and main content of the reporting on credit risk exposure and on the credit risk management function to the executive management and to the board of directors
Credit risk management information systems, reporting and analysis are managed centrally and at the divisional and business unit level.
Periodic reporting provides confirmation of the effectiveness of processes, highlights emerging issues, and allows monitoring of portfolio trends by all levels of management and the Board.
Examples of reports include EAD, portfolio mix, risk grade profiles and migrations, RWAs, large exposure reporting, credit early alerts, watch and control lists, policy or appetite exceptions, impaired assets and provisions.
---
# CR1: Credit quality of assets
The table below presents a view of the credit quality of on- and off-balance sheet assets.
Non-performing exposures are exposures captured by the definition of default (refer below table).
| Sep 25 | Gross carrying values of$^{1}$ | | | Allowances/ impairments$^{2}$ | Of which ECL accounting provisions for credit losses on SA exposures | Of which ECL accounting provisions for credit losses on IRB exposures | Net values |
| --- | --- | --- | --- | --- | --- | --- | --- |
| | Non-performing exposures $M | Performing exposures $M | | | Allocated in regulatory category of Specific $M | Allocated in regulatory category of General $M | | |
| 1 Loans | 8,181 | 816,422 | | (3,874) | (89) | (286) | (3,499) | 820,729 |
| 2 Debt Securities | - | 164,470 | | (34) | - | (1) | (33) | 164,436 |
| 2a of which: measured at amortising cost | - | 7,404 | | (34) | - | (1) | (33) | 7,370 |
| 2b of which: measured at fair value | - | 157,066 | | - | - | - | - | 157,066 |
| 3 Off-balance sheet exposures | 229 | 241,865 | | (870) | (5) | (64) | (801) | 241,224 |
| 3a Other financial assets | - | 254,953 | | - | - | - | - | 254,953 |
| 4 **Total** | **8,410** | **1,477,710** | | **(4,778)** | **(94)** | **(351)** | **(4,333)** | **1,481,342** |
| Mar 25 | Gross carrying values of | | | Allowances/ impairments | Of which ECL accounting provisions for credit losses on SA exposures | Of which ECL accounting provisions for credit losses on IRB exposures | Net values |
| --- | --- | --- | --- | --- | --- | --- | --- |
| | Non-performing exposures $M | Performing exposures $M | | | Allocated in regulatory category of Specific $M | Allocated in regulatory category of General $M | | |
| 1 Loans | 8,077 | 808,198 | | (3,761) | (53) | (292) | (3,416) | 812,514 |
| 2 Debt Securities | - | 153,730 | | (31) | - | - | (31) | 153,699 |
| 2a of which: measured at amortising cost | - | 6,783 | | (31) | - | - | (31) | 6,752 |
| 2b of which: measured at fair value | - | 146,947 | | - | - | - | - | 146,947 |
| 3 Off-balance sheet exposures | 229 | 251,825 | | (852) | (4) | (60) | (788) | 251,202 |
| 3a Other financial assets | - | 298,501 | | - | - | - | - | 298,501 |
| 4 **Total** | **8,306** | **1,512,254** | | **(4,644)** | **(57)** | **(352)** | **(4,235)** | **1,515,916** |
$^1$ Gross carrying values exclude capitalised brokerage & loan/lease origination fees and unearned income.
$^2$ Allowances/impairments of $4,778 million include Collectively Assessed Provision for Credit Impairment of $4,379 million, and Individually Assessed Provisions for Credit Impairment of $399 million.
---
# CR2: Changes in stock of non-performing loans and debt securities
The table below presents the non-performing exposure balances, the flows between performing and non-performing exposure categories and reductions in the non-performing exposure balances due to write-offs.$^{1}$
| | Sep 25 $M | Mar 25 $M |
| --- | --- | --- |
| 1 Non-performing loans and debt securities at end of the previous reporting period | 8,306 | 7,451 |
| 2 Loans and debt securities that have defaulted since the last reporting period | 3,963 | 4,179 |
| 3 Returned to performing status | (1,816) | (1,499) |
| 4 Amounts written off | (174) | (172) |
| 5 Other changes$^{2}$ | (1,869) | (1,653) |
| 6 Non-performing loans and debt securities at end of the reporting period | 8,410 | 8,306 |
$^1$ Includes off-balance sheet exposures.
$^2$ Other changes include repayments and foreign exchange impacts.
---
# CRB: Additional disclosure related to the credit quality of assets
### Past due facilities
A facility is past due:
* after any amount that was due under a contract (interest, principal, fee or other amount) was not paid in full on, or before, the date that it is due; or
* when it is outside of contracted arrangements.
Days past due are the number of calendar days that have elapsed since the facility became past due.
### Definition of default
ANZ uses the following definition of default:
* the customer is considered unlikely to pay its credit obligations in full, without recourse to actions such as realising security; or
* the executed customer documentation includes a payment obligation, such as a maturing/terminating facility or amortisation, and the customer is 90 consecutive days or more past due on this credit obligation; or
* the customer’s overdraft or other revolving facilities have been continuously outside approved limits for 90 or more consecutive days
### Non-performing exposures
A non-performing exposure is an exposure that is in default. An exposure will only be re-classified as performing when the exposure no longer meets the definition of default, and when repayments have been made when due over a continuous repayment period of at least 90 days (or over 6 months, per revised contractual terms, for restructured exposures), as required by APS 220 Credit Risk Management.
### Provisions for credit impairment
**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.
In determining what constitutes a SICR, ANZ considers both qualitative and quantitative information, including probability of default at origination and at the reporting date.
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.
**Credit-impaired exposures**
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.
Financial assets, including those that are well-secured, are considered credit-impaired for financial reporting purposes when they default. These assets are reported as Stage 3.
For regulatory purposes, specific provisions are defined as the provisions for credit-impaired exposures (i.e. stage 3 ECL). Specific provisions include individually assessed provisions, and stage 3 collectively assessed provisions.
**Measurement of expected credit loss**
Collectively assessed 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.
Individually assessed ECL is assessed on a case-by-case basis for individually managed assets where doubt exists as to whether the full contractual amount will be received in a timely manner, 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.
### Write-offs
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.
### Restructured exposures
A restructured exposure is an exposure where a concession has been granted:
* to a customer experiencing financial difficulty, and
* the concession is not available to a customer in good standing, and
* the concession results in, for example, the:
* forgiveness or postponement of a material value of principal or fees
* deferral of interest
* capitalisation of arrears
Restructures can be granted on performing and non-performing facilities. ANZ ensures that non-performing exposures, and exposures that are non-performing due to a restructure, maintain the non-performing status for a minimum of 6 months after being restructured.
---
### Breakdown of exposures, amounts of non-performing exposures and accounting provisions, by industry
| Sep 25 | Gross carrying amount | | | | of which: non-performing | | Accounting provisions for non-performing exposures | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | Total $M | of which: loans $M | of which: off balance sheet exposures $M | of which: other financial assets $M | Total $M | of which: individually assessed for ECL $M | Total $M | of which: individual provision$^{1}$ $M |
| 1 Agriculture, Forestry, Fishing & Mining | 55,628 | 41,326 | 13,517 | 785 | 671 | 171 | 83 | 33 |
| 2 Business & Property Services | 23,532 | 14,348 | 8,888 | 296 | 111 | 30 | 38 | 21 |
| 3 Commercial Property | 80,758 | 62,782 | 16,593 | 1,383 | 462 | 228 | 64 | 36 |
| 4 Construction | 13,211 | 6,508 | 6,657 | 46 | 148 | 44 | 43 | 19 |
| 5 Electricity, Gas & Water Supply | 23,658 | 11,590 | 11,192 | 876 | 4 | 3 | 1 | 1 |
| 6 Entertainment, Leisure & Tourism | 17,670 | 13,750 | 3,829 | 91 | 151 | 30 | 33 | 16 |
| 7 Financial, Investment & Insurance | 402,472 | 86,293 | 51,424 | 264,755 | 23 | 8 | 9 | 6 |
| 8 Government & Official Institutions | 146,648 | 2,436 | 1,173 | 143,039 | - | - | - | - |
| 9 Manufacturing | 50,831 | 26,053 | 23,205 | 1,573 | 216 | 78 | 43 | 28 |
| 10 Personal Lending | 20,788 | 6,897 | 13,853 | 38 | 99 | 22 | 81 | 15 |
| 11 Residential Mortgage | 554,118 | 498,599 | 54,108 | 1,411 | 5,987 | 257 | 436 | 57 |
| 12 Retail Trade | 17,969 | 11,480 | 6,418 | 71 | 219 | 122 | 101 | 83 |
| 13 Transport & Storage | 21,170 | 11,644 | 8,736 | 790 | 62 | 34 | 18 | 12 |
| 14 Wholesale Trade | 25,252 | 12,706 | 11,439 | 1,107 | 55 | 20 | 18 | 11 |
| 15 Other | 32,415 | 18,191 | 11,062 | 3,162 | 202 | 98 | 82 | 61 |
| 16 **Total** | **1,486,120** | **824,603** | **242,094** | **419,423** | **8,410** | **1,145** | **1,050** | **399** |
$^1$ Losses from lower risk IPRE lending and total losses from IPRE lending are less than 0.3% and 0.5% of total IPRE exposures respectively in each of the past three years to 30 September 2025.
---
### Breakdown of exposures, amounts of non-performing exposures and accounting provisions, by country
| Sep 25 | Gross carrying amount | | | | of which: non-performing | | Accounting provisions for non-performing exposures | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | Total $M | of which: loans $M | of which: off balance sheet exposures $M | of which: other financial assets $M | Total $M | of which: individually assessed for ECL $M | Total $M | of which: individual provision $M |
| 1 Australia | 968,320 | 615,118 | 140,876 | 212,326 | 6,823 | 757 | 851 | 297 |
| 2 New Zealand | 198,199 | 139,702 | 26,180 | 32,317 | 1,444 | 314 | 147 | 60 |
| 3 International | 319,601 | 69,783 | 75,038 | 174,780 | 143 | 74 | 52 | 42 |
| 4 **Total** | **1,486,120** | **824,603** | **242,094** | **419,423** | **8,410** | **1,145** | **1,050** | **399** |
---
### Ageing of exposures$^{1}$
| Sep 25 | Gross carrying amount | | | |
| --- | --- | --- | --- | --- |
| | 30-59 Days $M | 60-89 Days $M | 90+ Days $M | Total $M |
| 1 Corporate, SME and Other Lending | 331 | 279 | 999 | 1,609 |
| 2 Personal Lending | 40 | 24 | 65 | 129 |
| 3 Residential Mortgage | 1,512 | 994 | 4,231 | 6,737 |
| 4 **Total** | **1,883** | **1,297** | **5,295** | **8,475** |
$^{1}$ Credit exposures that are 1 – 29 days past due are not disclosed separately as these do not substantially contribute to an elevated level of credit risk.
### Maturity of exposures
| Sep 25 | Gross carrying amount | | | | |
| --- | --- | --- | --- | --- | --- |
| | Within 1 year $M | 1 to 5 years $M | More than 5 years $M | No maturity specified$^{2}$ $M | Total $M |
| 1 Loans | 132,675 | 153,282 | 527,856 | 10,790 | 824,603 |
| 2 Off-balance sheet exposures | 78,806 | 87,807 | 46,812 | 28,669 | 242,094 |
| 3 Other financial assets | 210,895 | 111,039 | 97,489 | - | 419,423 |
| 4 **Total** | **422,376** | **352,128** | **672,157** | **39,459** | **1,486,120** |
$^{2}$ No Maturity Specified predominately includes credit cards and residential mortgage equity manager accounts.
### Restructured exposures
| Sep 25 | $M |
| --- | --- |
| 1 Total Restructured Exposures | 1,393 |
---
# CRC: Qualitative disclosure related to credit risk mitigation techniques
### (a) Core features of policies and processes for collateral evaluation and management.
**Main types of collateral taken by ANZ**
Collateral is used to mitigate credit risk, as the secondary source of repayment in case the counterparty cannot meet its contractual repayment obligations$^{1}$. Types of collateral typically taken by ANZ include:
* Charges over property, such as residential, commercial, industrial, or rural property;
* Charges over business assets;
* Charges over specific plant and equipment;
* Charges over listed shares, bonds, or securities;
* Charges over cash investments and financial assets;
* Guarantees and pledges; and
* Cash and securities under Credit Support Annex (CSA) and Global Master Repurchase Agreement (GMRA) for Counterparty credit risk in derivative and repo transactions.
In some cases, such as where the customer risk profile is considered very sound or by the nature of the product, a transaction may not be supported by collateral.
ANZ’s credit policy, requirements and processes set out the acceptable types of collateral, as well as a process by which additional instruments and/or asset types can be considered for approval.
For derivative transactions, APRA’s CPS 226 “Margining and risk mitigation for non-centrally cleared derivatives” (CPS 226) has mandated Variation Margin and Initial Margin arrangements between covered entities, subject to trading volume thresholds. The operation of collateral agreements falls under a policy which establishes the control framework designed to ensure a robust and globally consistent approach to the management of collateralised exposures, as well as compliance with CPS 226 obligations.
For non-derivative and repo transactions, ANZ’s credit risk modelling teams use historical internal loss data and other relevant external data to assist in determining the discount that each type of collateral would be expected to incur in a forced sale. The discounted value is used in the determination of the Security Indictor (SI) and LGD. For derivative transactions, ANZ haircuts the value of cash and securities collateral under CSA or GMRA to calculate the regulatory EAD, as per APRA’s APS 112 and APS 180 Capital Adequacy: Counterparty Credit Risk (APS 180).
**Policies and processes for collateral valuation and management**
ANZ has well established policies, requirements and processes around collateral valuation and management that are reviewed regularly. The concepts of legal enforceability, certainty and current valuation are central to collateral management.
To achieve legal enforceability and certainty, ANZ uses standard collateral instruments or has specific documentation drawn up by external legal advisers, and where applicable, security interests are registered. The use of collateral management systems also provides certainty that the collateral has been properly taken, registered and stored.
In order to rely on the valuation of collateral assets, ANZ has developed comprehensive rules around acceptable types of valuations (including who may value an asset), frequency of revaluations and standard extension ratios for typical asset types. Upon receipt of a new valuation, the information is used to recalculate the SI (or to reassess the adequacy of the provision, in the case of an impaired asset) and in the calculation of LGD and LVR.
**Guarantee support**
ANZ use guarantees for credit risk mitigation, which include but are not limited to, credit risk insurance and risk participation agreements. ANZ’s credit policy stipulates the minimum requirements to qualify for credit risk mitigation.
For a guarantee to be recognised as eligible CRM, the guarantor must be unconditionally obliged to pay out in a timely manner in the event that the underlying counterparty fails to make a payment. The guarantor would have no direct control on the enforceability of the guarantee.
### (b) The use of netting
Netting is a form of credit risk mitigation in that it reduces EAD, by offsetting a customer’s positive and negative balances with ANZ.
In order to apply on-balance sheet netting, the arrangement must be specifically documented with the customer and meet a number of legally enforceable requirements.
Netting is also used where the credit exposure arises from off-balance sheet market related transactions. For close-out netting to be utilised with counterparties, a legally enforceable eligible netting agreement in an acceptable jurisdiction must be in place. This means that each transaction is aggregated into a single net amount, and transactions are netted to arrive at a single overall sum.
$^1$ For some products, the collateral provided is fundamental to its structuring so is not strictly the secondary source of repayment. For example, lending secured by trade receivables is typically repaid by the collection of those receivables.
---
### (c) Information about market or credit risk concentrations under the credit risk mitigation instruments used (i.e. by guarantor type, collateral and credit derivative providers)
**Use of credit derivatives for risk mitigation**
ANZ uses market instruments, mainly interest rate and foreign exchange derivatives, as well as CDS Indices to hedge the Credit value adjustment (CVA) mark to market volatility of the markets derivative portfolio.
**Transaction structuring to mitigate credit risk**
Besides collateral, guarantee support and derivatives described above, credit risk mitigation can also be achieved by prudent transaction structuring. For example, the risk in project finance lending can be mitigated by lending covenants, loan syndication and political risk insurance.
**Concentrations of credit risk mitigation**
Taking collateral raises the possibility that ANZ may inadvertently increase its risk by becoming exposed to collateral concentrations. For example, in the same way that an over-exposure to a particular industry may mean that a bank is more sensitive to the performance of that industry, an over-exposure to a particular collateral asset type may make ANZ more sensitive to the performance of that asset type.
ANZ does not believe that it has any material concentrations of collateral types, given the well diversified nature of its portfolio and diverse range of pledged collateral, and well embedded collateral review processes.
**Additional credit risk mitigation for markets derivatives**
Right to break clauses are used in master agreement or in trade confirmation to reduce the term of long dated derivative trades. Additional termination triggers (close out of exposure) such as credit rating downgrade clauses and change in ownership clauses included in documentation are used to reduce credit exposure under specific credit events. ANZ uses central clearing houses to clear certain derivative transactions and reduce bilateral exposure. Settlement through Continuous Linked Settlement (CLS) is used to eliminate settlement risk for foreign exchange transactions with CLS members. In addition to the exchange of Variation margin and Initial Margin, APRA’s CPS 226 also requires the following risk mitigation practices to be established for un-cleared derivatives between covered counterparties: trading relationship documentation; trade confirmation; portfolio reconciliation; portfolio compression; valuation processes; and dispute resolution processes.
## CR3: Credit risk mitigation techniques – overview
The following table presents a detailed breakdown of ANZ’s unsecured and secured loan and debt securities exposures.
The change in exposures secured by financial guarantees from $9.4 billion in March 2025 to $6.3 billion in September 2025 includes a reduction of $1.8b due to a methodology change in the application of guarantees.
| Sep 25 | Exposures unsecured: carrying amount $M | Exposures to be secured$^{1}$ $M | Exposures secured by collateral$^{2}$ $M | Exposures secured by financial guarantees $M | Exposures secured by credit derivatives $M |
| --- | --- | --- | --- | --- | --- |
| 1 Loans | 148,445 | 672,284 | 665,977 | 6,307 | - |
| 2 Debt securities | 159,040 | 5,396 | 5,396 | - | - |
| 3 **Total** | **307,485** | **677,680** | **671,373** | **6,307** | **-** |
| 4 of which: non-performing | 103 | 7,095 | 7,095 | - | - |
| Mar 25 | Exposures unsecured: carrying amount $M | Exposures to be secured $M | Exposures secured by collateral $M | Exposures secured by financial guarantees $M | Exposures secured by credit derivatives $M |
| --- | --- | --- | --- | --- | --- |
| 1 Loans | 139,021 | 673,493 | 664,074 | 9,419 | - |
| 2 Debt securities | 148,538 | 5,161 | 5,161 | - | - |
| 3 **Total** | **287,559** | **678,654** | **669,235** | **9,419** | **-** |
| 4 of which: non-performing | 133 | 7,100 | 7,100 | - | - |
$^{1}$ Includes exposures partly or totally secured by collateral, financial guarantees, or credit derivatives.
$^{2}$ Eligible Collateral could include physical collateral, cash collateral (cash, certificates deposits and bank bills issued by the lending ADI), gold bullion and highly rated debt securities.
---
# CRD: Qualitative disclosure on banks’ use of external credit ratings under the standardised approach for credit risk
As noted in Table CRA General qualitative information about credit risk, under the Standardised approach, specific portfolios are mapped to regulatory risk weights, mainly based on the type of counterparty such as: Sovereign, Bank, Corporate and its external rating where the borrower is externally rated.
For these counterparties, external ratings by Standard & Poor’s, Moody’s Investors Service and Fitch Ratings are used as inputs into the RWA calculation. ANZ has mapped its master scale to the grading of these three External Credit Assessment Institutions (ECAIs).
Currently, external ratings are used to determine the RWA amounts associated with the exposures under the asset classes of Corporate, Sovereign and Bank.
External ratings utilised are either an issuer rating or an issue-specific rating. We rely on an issue-specific rating if it is available for the purposes of determining RWA for the exposures we hold. We utilise the issuer rating only for our exposures which rank pari-passu with senior claims of the issuer.
ANZ’s rating system mapping to the gradings of external rating agencies is outlined in Table CRE.
---
# CR4: Standardised approach – credit risk exposure and credit risk mitigation (CRM) effects
The table below presents on-balance sheet and off-balance sheet exposures before and after credit conversion factors (CCF) and CRM as well as associated RWA and RWA density by asset classes.
This table has minor modifications from the original BCBS standard. Non performing exposures have been incorporated into the respective asset classes, providing further consistency with other tables. March 2025 comparative information has been restated accordingly (RWA of $1.2 billion as at March 2025)$^{1}$. Refer also to Appendix 1.
| Sep 25 | Exposures before CCF and before CRM | | Exposures post-CCF and post-CRM | | RWA and RWA density | |
| --- | --- | --- | --- | --- | --- | --- |
| | On-balance sheet amount $M | Off-balance sheet amount $M | On-balance sheet amount $M | Off-balance sheet amount $M | RWA $M | RWA density % |
| 1 Sovereigns | 10,939 | 10 | 10,939 | 10 | 10 | 0% |
| 4 Banks | 808 | - | 808 | - | 170 | 21% |
| 6 Corporate Exposures | 1,328 | 1,776 | 1,320 | 899 | 1,950 | 88% |
| 6a Specialised lending | 144 | 106 | 144 | 55 | 219 | 110% |
| 6b Commercial Property | 12,016 | 1,390 | 12,005 | 724 | 9,039 | 71% |
| 6c ADC | 495 | 349 | 495 | 342 | 1,248 | 149% |
| 8 Other Retail | 77 | 18 | 75 | 11 | 88 | 102% |
| 9 Residential Property | 59,908 | 10,210 | 59,906 | 4,821 | 22,407 | 35% |
| 11 Other Exposures | 9,709 | 26 | 9,708 | 26 | 357 | 4% |
| 11a Fixed Assets | 3,083 | - | 3,083 | - | 3,083 | 100% |
| 12 RBNZ regulated entities | 24,987 | 1,588 | 24,985 | 886 | 1,830 | 7% |
| 14 **Total** | **123,494** | **15,473** | **123,468** | **7,774** | **40,401** | **31%** |
$^{1}$ March comparative numbers have been restated to align with the change in methodology in the current period.
Suncorp Bank is a standardised ADI with Credit RWA calculated based on APS 112 and as such is reflected in the above table, predominantly in the Sovereign, Residential and Commercial Property Asset Classes.
---
# CR4: Standardised approach – credit risk exposure and credit risk mitigation (CRM) effects (continued)
| Mar 25 | Exposures before CCF and before CRM | | Exposures post-CCF and post-CRM | | RWA and RWA density | |
| --- | --- | --- | --- | --- | --- | --- |
| | On-balance sheet amount $M | Off-balance sheet amount $M | On-balance sheet amount $M | Off-balance sheet amount $M | RWA $M | RWA density % |
| 1 Sovereigns | 11,854 | - | 11,834 | - | - | 0% |
| 4 Banks | 850 | - | 850 | - | 170 | 20% |
| 6 Corporate Exposures | 1,626 | 2,455 | 1,620 | 1,838 | 3,194 | 92% |
| 6a Specialised lending | 78 | 71 | 78 | 52 | 143 | 110% |
| 6b Commercial Property | 12,327 | 1,465 | 12,315 | 786 | 9,398 | 72% |
| 6c ADC | 510 | 340 | 508 | 333 | 1,239 | 147% |
| 8 Other Retail | 102 | 94 | 99 | 42 | 166 | 118% |
| 9 Residential Property | 57,917 | 10,238 | 57,909 | 4,995 | 21,968 | 35% |
| 11 Other Exposures | 7,452 | 1 | 7,452 | 1 | 912 | 12% |
| 11a Fixed Assets | 3,417 | - | 3,417 | - | 3,417 | 100% |
| 12 RBNZ regulated entities | 26,050 | 1,795 | 26,080 | 1,003 | 2,005 | 7% |
| 14 **Total** | **122,183** | **16,459** | **122,162** | **9,050** | **42,612** | **32%** |
---
# CR5: Standardised approach – exposures by asset classes and risk weights
The table below shows exposure at default post-CCF and CRM, broken down by Credit Exposure Class and risk weight.
This table has minor modifications from the original BCBS standard. Non performing exposures have been incorporated into the respective asset classes, providing further consistency with other tables. March 2025 comparative information has been restated accordingly (RWA of $1.2 billion as at March 2025)$^{1}$. Refer also to Appendix 1.
| Sep 25 | Risk Weight % | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | 0 | 20 | 25 | 30 | 35 | 40 | 45 | 50 | 60 | 65 | 70 | 75 | 80 | 85 | 90 | 100 | 105 | 110 | 130 | 150 | 250 | 400 | 1,250 | Other | Total |
| | **Credit exposure amount (post-CCF and post-CRM) $M** | | | | | | | | | | | | | | | | | | | | | | | |
| 1 Sovereigns | 10,938 | - | - | - | - | - | - | - | - | - | - | - | - | - | - | 11 | - | - | - | - | - | - | - | - | 10,949 |
| 4 Banks | - | 723 | - | 85 | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | 808 |
| 6 Corporate Exposures | - | 152 | - | - | - | - | - | 112 | - | - | - | 101 | - | 1,057 | - | 113 | - | 627 | - | 57 | - | - | - | - | 2,219 |
| 6a Specialised lending | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | 199 | - | - | - | - | - | - | 199 |
| 6b Commercial Property | - | - | - | - | - | - | - | - | 5,844 | - | 3,506 | 528 | - | 1,420 | 806 | 194 | - | 222 | - | 209 | - | - | - | - | 12,729 |
| 6c ADC | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | 14 | - | - | - | 823 | - | - | - | - | 837 |
| 8 Other Retail | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | 82 | - | - | - | 4 | - | - | - | - | 86 |
| 9 Residential Property | - | 11,470 | 12,031 | 11,386 | 12,382 | 5,668 | 6,425 | 1,065 | 209 | 1,483 | 130 | - | 151 | 189 | - | 1,659 | 273 | - | 139 | 67 | - | - | - | - | 64,727 |
| 11 Other Exposures | 9,423 | 22 | - | - | - | - | - | - | - | - | - | - | - | - | - | 223 | - | 25 | - | - | 41 | - | - | - | 9,734 |
| 11a Fixed Assets | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | 3,083 | - | - | - | - | - | - | - | - | 3,083 |
| 12 RBNZ regulated entities | 21,666 | 2,452 | - | - | - | - | - | 829 | - | - | - | - | - | - | - | 924 | - | - | - | - | - | - | - | - | 25,871 |
| 14 **Total** | **42,027** | **14,819** | **12,031** | **11,471** | **12,382** | **5,668** | **6,425** | **2,006** | **6,053** | **1,483** | **3,636** | **629** | **151** | **2,666** | **806** | **6,303** | **273** | **1,073** | **139** | **1,160** | **41** | **-** | **-** | **-** | **131,242** |
$^{1}$ March comparative numbers have been restated to align with the change in methodology in the current period.
---
# CR5: Standardised approach – exposures by asset classes and risk weights (continued)
| Mar 25 | Risk Weight % | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | 0 | 20 | 25 | 30 | 35 | 40 | 45 | 50 | 60 | 65 | 70 | 75 | 80 | 85 | 90 | 100 | 105 | 110 | 130 | 150 | 250 | 400 | 1,250 | Other | Total |
| | **Credit exposure amount (post-CCF and post-CRM) $M** | | | | | | | | | | | | | | | | | | | | | | | |
| 1 Sovereigns | 11,834 | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | 11,834 |
| 4 Banks | - | 850 | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | 850 |
| 6 Corporate Exposures | - | - | - | - | - | - | - | 112 | - | - | - | 112 | - | 1,990 | - | 147 | - | 1,080 | - | 17 | - | - | - | - | 3,458 |
| 6a Specialised lending | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | 130 | - | - | - | - | - | - | 130 |
| 6b Commercial Property | - | - | - | - | - | - | - | - | 5,675 | - | 3,579 | 566 | - | 1,832 | 845 | 141 | - | 223 | - | 240 | - | - | - | - | 13,101 |
| 6c ADC | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | 46 | - | - | - | 795 | - | - | - | - | 841 |
| 8 Other Retail | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | 90 | - | - | - | 51 | - | - | - | - | 141 |
| 9 Residential Property | - | 10,944 | 11,621 | 11,052 | 12,004 | 5,717 | 5,887 | 1,165 | 255 | 1,518 | 149 | - | 175 | 189 | - | 1,713 | 290 | - | 153 | 72 | - | - | - | - | 62,904 |
| 11 Other Exposures | 6,592 | 16 | - | - | - | - | - | - | - | - | - | - | - | - | - | 804 | - | - | - | - | 41 | - | - | - | 7,453 |
| 11a Fixed Assets | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | 3,417 | - | - | - | - | - | - | - | - | 3,417 |
| 12 RBNZ regulated entities | 22,785 | 2,325 | - | - | - | - | - | 867 | - | - | - | - | - | - | - | 1,106 | - | - | - | - | - | - | - | - | 27,083 |
| 14 **Total** | **41,211** | **14,135** | **11,621** | **11,052** | **12,004** | **5,717** | **5,887** | **2,144** | **5,930** | **1,518** | **3,728** | **678** | **175** | **4,011** | **845** | **7,464** | **290** | **1,433** | **153** | **1,175** | **41** | **-** | **-** | **-** | **131,212** |
---
# CR5: Standardised approach – exposures by asset classes and risk weights (continued)
| Sep 25 | On-balance sheet exposure | Off-balance sheet exposure | Weighted average CCF$^{1}$ | Exposure |
| --- | --- | --- | --- | --- |
| Risk weight | (pre-CCF) | (pre-CCF) | | (post-CCF and post-CRM) |
| 1 Less than 40% | 88,120 | 10,101 | 46% | 92,730 |
| 2 40–70% | 23,994 | 2,141 | 60% | 25,270 |
| 3 75% | 536 | 137 | 68% | 629 |
| 4 85% | 2,365 | 914 | 49% | 2,817 |
| 5 90–100% | 6,575 | 1,015 | 53% | 7,110 |
| 6 105–130% | 1,070 | 743 | 56% | 1,485 |
| 7 150% | 788 | 422 | 88% | 1,160 |
| 8 250% | 41 | - | - | 41 |
| 9 400% | 5 | - | - | - |
| 10 1250% | - | - | - | - |
| 11 Total exposures | **123,494** | **15,473** | **50%** | **131,242** |
$^{1}$ Weighting is based on off-balance sheet exposure (pre-CCF).
| Mar 25 | On-balance sheet exposure | Off-balance sheet exposure | Weighted average CCF | Exposure |
| --- | --- | --- | --- | --- |
| Risk weight | (pre-CCF) | (pre-CCF) | | (post-CCF and post-CRM) |
| 1 Less than 40% | 85,205 | 10,186 | 47% | 90,023 |
| 2 40–70% | 23,593 | 2,247 | 59% | 24,924 |
| 3 75% | 577 | 148 | 68% | 678 |
| 4 85% | 3,014 | 1,442 | 81% | 4,186 |
| 5 90–100% | 7,712 | 1,101 | 54% | 8,309 |
| 6 105–130% | 1,213 | 938 | 71% | 1,876 |
| 7 150% | 828 | 397 | 87% | 1,175 |
| 8 250% | 41 | - | - | 41 |
| 9 400% | - | - | - | - |
| 10 1250% | - | - | - | - |
| 11 Total exposures | **122,183** | **16,459** | **55%** | **131,212** |
---
# CRE: Qualitative disclosure related to IRB models
### Scope of the supervisor’s acceptance of approach: Portfolios subject to the advanced IRB (AIRB) and foundation IRB (FIRB) approach
The following table summarises the types of borrowers and the rating approach adopted within each of ANZ’s IRB portfolios:
| IRB Asset Class | Borrower Type | Rating Approach |
| --- | --- | --- |
| Corporate | Corporations, partnerships or proprietorships that do not fit into any other asset class. Income Producing Real Estate | AIRB or FIRB where annual revenue > $750m |
| Sovereign | Central governments, Central banks, Certain multilateral development banks | FIRB |
| Residential Mortgages | Exposures secured by residential property | AIRB |
| Qualifying Revolving Retail | Australian consumer credit cards <$100,000 limit | AIRB |
| Other Retail | Other lending to consumers | AIRB |
| Specialised Lending subject to supervisory slotting | Project finance | IRB – Supervisory Slotting |
| Retail SME | Small business lending | AIRB |
| Financial Institutions | Banks, securities firms, insurance companies and leveraged funds | FIRB |
| Exposures of New Zealand banking subsidiaries | Includes all exposures in all asset classes for New Zealand banking subsidiaries. | AIRB and Supervisory Slotting |
In addition, where ANZ is not accredited to use the IRB based approach to credit risk, ANZ applies the Standardised approach to credit risk as detailed in table CRA.
On 31 July 2024 ANZ added Suncorp Bank to the ANZ Banking Group. Suncorp Bank is a standardised ADI with Credit RWA calculated based on APS 112 and as such will not be reflected in IRB specific disclosure tables.
### The ANZ rating system
As an IRB bank, ANZ’s internal models generate the inputs into the risk weighted asset calculations for both on- and off-balance sheet committed exposures and expected loss (EL) calculations. ANZ’s internal models are used to generate the three key risk components that serve as inputs to the IRB approach to credit risk: PD, EAD and LGD. Refer to table CRA General Qualitative Information about credit risk for definitions.
For wholesale asset classes, ANZ’s rating system has two separate and distinct dimensions that:
* Measure the PD, which is expressed by the Customer Credit Rating (CCR), reflecting the ability to service and repay debt.
* Measure the LGD as expressed by the Security Indicator (SI) ranging from A to G under the AIRB approach. The SI is calculated by reference to the percentage of a loan covered by security which can be realised in the event of default. This calculation uses standard ratios to adjust the current market value of collateral items to reflect anticipated sales proceeds during the workout process. The security-related SIs are supplemented with a range of other SIs which cover such factors as Cash cover (K), Subordination (M) and Sovereign backing (S). ANZ’s AIRB LGD’s also includes recognition of the different legal and insolvency regimes in different countries, where this has been shown to influence recovery outcomes.
ANZ’s corporate PD master scale is APRA approved and comprises 27 rating grades. Each level/grade is separately defined and has a range of default probabilities attached to it. The PD master scale enables ANZ’s rating system to be mapped to the grading’s of external rating agencies, using the PD as a common element after ensuring that default definitions and other key attributes are aligned.
The following table demonstrates this alignment (for one-year PDs):
| ANZ CCR | Moody’s | Standard & Poor’s | PD Range |
| --- | --- | --- | --- |
| 0+ to 1- | Aaa to Aa3 | AAA to AA- | 0.0000 - 0.0346% |
| 2+ to 3+ | A1 to Baa1 | A+ to BBB+ | 0.0347 - 0.1636% |
| 3= to 4+ | Baa2 to Baa3 | BBB to BBB- | 0.1637 - 0.4004% |
| 4= to 6= | Ba1 to B1 | BB+ to B+ | 0.4005 – 2.7550% |
| 6- to 7= | B2 to B3 | B to B- | 2.7551 – 9.7980% |
| 7- to 8+ | Caa1 to Caa3 | CCC+ to CCC- | 9.7981 – 27.1109% |
| 8= | Ca to C | CC to C | 27.1110 – 99.9999% |
| 8-, 9 and 10 | Default | Default | 100% |
In the retail asset classes, most facilities utilise credit rating scores. The scores are calibrated to PDs, and used to allocate exposures to homogenous pools, along with LGD and EAD.
---
Across the Retail and Wholesale asset classes the Group uses a range of PD models to rate IRB exposures. There are 16 models with more than $10bn of IRB EAD, accounting for 91% of total IRB exposures.
### Use of internal estimates other than for regulatory capital purposes
ANZ’s rating system is a fundamental part of credit management and plays a key role in:
* Lending discretions,
* Minimum origination standards,
* Concentration limits,
* Portfolio reporting,
* Customer profitability measurement,
* Collectively assessed provision measurement,
* Management of deteriorating customers (where certain CCR/SI combinations trigger increasing scrutiny), and
* Pricing decisions
Regulatory capital, collectively assessed provisions and internal expected loss are calculated from the same data sources and starting from the same basis, however there are some differences between the factors used because several aspects of ANZ’s rating system are adjusted in accordance with requirements for regulatory capital purposes. The most significant of these adjustments are the use for regulatory capital purposes of downturn LGDs; probability of default floors; the application of regulatory prescribed scalars such as the mortgage’s scalars of 1.4, 1.7 and 2.5 and the mandatory use of the supervisory slotting approach for project finance and IPRE in NZ.
### Internal model development, controls and changes
ANZ’s rating system and credit risk estimates are governed by the BRC and several executive management committees and are underpinned by a comprehensive framework of controls that operate throughout ANZ. All policies, methodologies, model designs, model reviews, validations, responsibilities, systems and processes supporting the ratings systems are documented, and subject to review by Internal Audit.
The design, build and implementation of credit rating models resides with a specialist Group-level team. Credit rating models are owned by Risk teams. The use (including rating overrides) and performance of credit rating models is monitored by the relevant business and their counterparts in Risk and validated regularly by a separate specialist Group- level function. This cycle of design, build, implementation, monitoring and validation is overseen by the CRSOC and informs the need for new models or recalibration of existing models.
### Relationship between Risk Management and Internal Audit
Internal Audit provides third line independent credit-related assurance activities, including providing an independent assessment of both the asset quality in the portfolio and the quality of credit decision making. It also assesses management controls from a “top down” portfolio oversight perspective as well as credit risk processes from a “bottom up” perspective based on individual customer file reviews.
### Scope and main content of reporting related to credit risk models
Risk grades are an integral part of periodic reporting to the Board and executives. Refer to table CRA: General qualitative information on Credit Risk, section (c) Structure and organisation of the credit risk management and control function, for details on the committees responsible for oversight and control of the internal ratings system, including credit model approvals and performance monitoring.
In addition, the use of the rating system’s outputs in key business unit performance measures in processes such as provisioning and the allocation of capital ensure that the rating system receives robust input from the business units, not just the specialist modelling teams.
### Rating process by asset class
Building reliable and accurate rating tools requires balancing of many factors including data availability (external data may be used in some circumstances, where it is relevant), the size of the segment (the more customers within the segment, the more likely that statistically reliable models can be built), and the need to be able to validate the model. Rating tool approaches include:
* Statistical models producing a PD or an LGD, which are developed from internal or external data.
* Statistical models producing an internal rating, which involve calibrating ANZ’s models to external rating data where internal data on defaults is insufficient for statistical purposes.
* Hybrid statistical and expert models producing an internal rating, which use a mixture of default data and expert input.
* Expert models/processes that produce an internal rating, including external rating agency replication models.
* Ongoing data collection and testing processes ensure enhanced or new models are introduced as required to maintain and improve the accuracy and reliability of rating processes.
---
Regardless of what credit risk rating tool is used, lending staff rating a customer are required to review the model- generated PD (or CCR) and take into account any out-of-model factors or policy overlays in deciding whether or not to override the model rating. Overrides of a rating model to a better rating require approval from the independent credit risk function. The significance of the model for risk grading varies with the customer segment: models will dominate risk grading of homogenous, simple and data-rich segments such as in Retail, however for complex, specialised business segments expert knowledge and the highly customised nature of transactions will influence the rating outcome.
---
# CR6: IRB – Credit risk exposures by portfolio and PD range
The table below provides the key parameters used for the calculation of capital requirements for credit risk exposures under the IRB approach.$^{1,2,3}$
This table has minor modifications from the original BCBS standard. Additional detail on this modification has been provided in Appendix 1.
| Sep 25 | Original on balance sheet gross exposure $M | Off-balance sheet exposures $M | Average CCF % | EAD post CRM and post CCF $M | Average PD % | Number of Borrowers # | Average LGD % | Average maturity Yr | RWA $M | RWA density % | EL $M | Provisions $M |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| **Corporates** | | | | | | | | | | | | |
| 1 0.00 to <0.15 | 13,062 | 7,391 | 42% | 16,145 | 0.10% | 561 | 37% | 2.55 | 4,571 | 28% | 6 | |
| 2 0.15 to <0.25 | 7,290 | 5,478 | 42% | 9,570 | 0.20% | 1,157 | 34% | 2.50 | 3,876 | 41% | 9 | |
| 3 0.25 to <0.50 | 32,865 | 12,683 | 54% | 39,710 | 0.36% | 5,944 | 25% | 2.19 | 15,355 | 39% | 35 | |
| 4 0.50 to <0.75 | 24,865 | 6,025 | 58% | 28,352 | 0.65% | 7,619 | 21% | 2.10 | 12,516 | 44% | 40 | |
| 5 0.75 to <2.50 | 33,930 | 8,303 | 64% | 39,205 | 1.36% | 16,492 | 21% | 2.31 | 21,838 | 56% | 111 | |
| 6 2.50 to <10.00 | 3,373 | 600 | 61% | 3,737 | 4.34% | 2,296 | 22% | 2.32 | 2,870 | 77% | 37 | |
| 7 10.00 to <100.00 | 752 | 275 | 43% | 870 | 24.81% | 3,174 | 30% | 2.10 | 1,644 | 189% | 70 | |
| 8 100.00 (Default) | 1,010 | 103 | 55% | 1,067 | 100.00% | 784 | 28% | 2.57 | 1,056 | 99% | 277 | |
| 9 Sub-Total AIRB Corporates | 117,147 | 40,858 | 53% | 138,656 | 1.69% | 38,027 | 25% | 2.28 | 63,726 | 46% | 585 | 1,271 |
| **Residential Mortgages** | | | | | | | | | | | | |
| 10 0.00 to <0.15 | 133,419 | 21,576 | 100% | 155,041 | 0.07% | 412,929 | 13% | - | 10,594 | 7% | 16 | |
| 11 0.15 to <0.25 | 22,691 | 1,374 | 100% | 24,067 | 0.18% | 43,664 | 14% | - | 2,369 | 10% | 6 | |
| 12 0.25 to <0.50 | 71,521 | 2,728 | 100% | 74,251 | 0.36% | 176,571 | 14% | - | 11,728 | 16% | 39 | |
| 13 0.50 to <0.75 | 14,299 | 1,234 | 100% | 15,536 | 0.64% | 40,739 | 16% | - | 4,031 | 26% | 16 | |
| 14 0.75 to <2.50 | 67,079 | 7,306 | 100% | 74,385 | 1.26% | 173,808 | 17% | - | 31,632 | 43% | 155 | |
| 15 2.50 to <10.00 | 23,235 | 115 | 100% | 23,350 | 4.15% | 56,808 | 15% | - | 17,476 | 75% | 148 | |
| 16 10.00 to <100.00 | 2,564 | 25 | 100% | 2,589 | 18.90% | 6,472 | 18% | - | 4,121 | 159% | 90 | |
| 17 100.00 (Default) | 4,300 | 15 | 100% | 4,316 | 100.00% | 10,064 | 28% | - | 12,184 | 282% | 331 | |
| 18 Sub-Total AIRB Residential Mortgages | 339,108 | 34,373 | 100% | 373,535 | 1.94% | 921,055 | 15% | - | 94,135 | 25% | 801 | 841 |
$^{1}$ Excludes Specialised Lending subject to supervisory slotting.
$^{2}$ Average maturity has been excluded for retail as it is not used in the RWA calculation.
$^{3}$ The definition of a “borrower” differs across portfolios. In some instances, a wholesale borrower can be reported across more than one PD band.
---
# CR6: IRB – Credit risk exposures by portfolio and PD range (continued)
| Sep 25 | Original on balance sheet gross exposure $M | Off-balance sheet exposures $M | Average CCF % | EAD post CRM and post CCF $M | Average PD % | Number of Borrowers # | Average LGD % | Average maturity Yr | RWA $M | RWA density % | EL $M | Provisions $M |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| **Retail SME** | | | | | | | | | | | | |
| 19 0.00 to <0.15 | 20 | 104 | 83% | 105 | 0.12% | 1,176 | 15% | - | 5 | 5% | - | |
| 20 0.15 to <0.25 | 22 | 47 | 81% | 60 | 0.19% | 549 | 18% | - | 5 | 8% | - | |
| 21 0.25 to <0.50 | 345 | 469 | 78% | 711 | 0.39% | 9,087 | 27% | - | 136 | 19% | 1 | |
| 22 0.50 to <0.75 | 226 | 287 | 63% | 406 | 0.65% | 10,575 | 38% | - | 146 | 36% | 1 | |
| 23 0.75 to <2.50 | 4,037 | 1,184 | 79% | 4,977 | 1.60% | 39,978 | 26% | - | 1,873 | 38% | 18 | |
| 24 2.50 to <10.00 | 7,420 | 1,461 | 93% | 8,784 | 4.43% | 55,765 | 29% | - | 4,923 | 55% | 109 | |
| 25 10.00 to <100.00 | 883 | 91 | 92% | 966 | 17.19% | 28,717 | 51% | - | 1,213 | 126% | 75 | |
| 26 100.00 (Default) | 475 | 31 | 98% | 506 | 100.00% | 5,375 | 39% | - | 1,118 | 221% | 163 | |
| 27 Sub-Total AIRB Retail SME | 13,428 | 3,674 | 84% | 16,515 | 6.95% | 151,222 | 29% | - | 9,419 | 57% | 367 | 511 |
| **Qualifying Revolving Retail (QRR)** | | | | | | | | | | | | |
| 28 0.00 to <0.15 | 1,507 | 6,164 | 73% | 6,018 | 0.11% | 653,111 | 74% | - | 313 | 5% | 5 | |
| 29 0.15 to <0.25 | 162 | 843 | 73% | 774 | 0.19% | 108,566 | 74% | - | 64 | 8% | 1 | |
| 30 0.25 to <0.50 | 593 | 1,937 | 77% | 2,075 | 0.36% | 253,401 | 75% | - | 292 | 14% | 6 | |
| 31 0.50 to <0.75 | 152 | 256 | 95% | 396 | 0.65% | 37,024 | 74% | - | 88 | 22% | 2 | |
| 32 0.75 to <2.50 | 1,045 | 880 | 98% | 1,905 | 1.36% | 186,468 | 79% | - | 787 | 41% | 20 | |
| 33 2.50 to <10.00 | 778 | 223 | 125% | 1,057 | 4.07% | 107,310 | 82% | - | 997 | 94% | 35 | |
| 34 10.00 to <100.00 | 168 | 28 | 129% | 204 | 19.92% | 28,790 | 81% | - | 430 | 211% | 33 | |
| 35 100.00 (Default) | 34 | 2 | 100% | 36 | 100.00% | 4,490 | 76% | - | 61 | 166% | 25 | |
| 36 Sub-Total AIRB QRR | 4,439 | 10,333 | 78% | 12,465 | 1.32% | 1,379,160 | 75% | - | 3,032 | 24% | 127 | 192 |
| **Other Retail** | | | | | | | | | | | | |
| 37 0.00 to <0.15 | 5 | 34 | 97% | 38 | 0.09% | 18,169 | 78% | - | 7 | 19% | - | |
| 38 0.15 to <0.25 | - | 1 | 75% | 1 | 0.19% | 8 | 81% | - | - | 35% | - | |
| 39 0.25 to <0.50 | 5 | 17 | 117% | 25 | 0.36% | 38,825 | 77% | - | 12 | 49% | - | |
| 40 0.50 to <0.75 | 2 | 3 | 114% | 6 | 0.65% | 13,284 | 76% | - | 4 | 69% | - | |
| 41 0.75 to <2.50 | 637 | 60 | 109% | 704 | 1.28% | 189,954 | 77% | - | 670 | 95% | 7 | |
| 42 2.50 to <10.00 | 521 | 24 | 105% | 546 | 3.95% | 102,891 | 78% | - | 669 | 122% | 17 | |
| 43 10.00 to <100.00 | 79 | 3 | 106% | 81 | 30.33% | 22,146 | 79% | - | 166 | 204% | 19 | |
| 44 100.00 (Default) | 49 | - | 100% | 49 | 100.00% | 25,437 | 81% | - | 114 | 231% | 37 | |
| 45 Sub-Total AIRB Other Retail | 1,298 | 142 | 106% | 1,450 | 7.25% | 410,714 | 78% | - | 1,642 | 113% | 80 | 124 |
| 46 Total AIRB | 475,420 | 89,380 | 75% | 542,621 | 2.03% | 2,900,178 | 19% | 2.28 | 171,954 | 32% | 1,960 | 2,939 |
---
# CR6: IRB – Credit risk exposures by portfolio and PD range (continued)
| Sep 25 | Original on balance sheet gross exposure $M | Off-balance sheet exposures $M | Average CCF % | EAD post CRM and post CCF $M | Average PD % | Number of Borrowers # | Average LGD % | Average maturity Yr | RWA $M | RWA density % | EL $M | Provisions $M |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| **FIRB** | | | | | | | | | | | | |
| **Corporates** | | | | | | | | | | | | |
| 47 0.00 to <0.15 | 23,609 | 53,848 | 41% | 45,537 | 0.08% | 769 | 46% | 2.03 | 11,890 | 26% | 18 | |
| 48 0.15 to <0.25 | 11,159 | 17,236 | 37% | 17,544 | 0.20% | 433 | 49% | 2.16 | 8,428 | 48% | 17 | |
| 49 0.25 to <0.50 | 10,326 | 15,601 | 40% | 16,620 | 0.33% | 555 | 47% | 2.00 | 10,019 | 60% | 26 | |
| 50 0.50 to <0.75 | 1,643 | 2,646 | 32% | 2,498 | 0.61% | 110 | 40% | 2.39 | 1,833 | 73% | 6 | |
| 51 0.75 to <2.50 | 1,205 | 1,409 | 42% | 1,799 | 1.31% | 114 | 35% | 1.52 | 1,419 | 79% | 8 | |
| 52 2.50 to <10.00 | 124 | 188 | 46% | 210 | 3.37% | 6 | 60% | 0.96 | 359 | 171% | 4 | |
| 53 10.00 to <100.00 | 173 | 191 | 71% | 307 | 20.17% | 14 | 29% | 0.69 | 440 | 143% | 16 | |
| 54 100.00 (Default) | 115 | 44 | 49% | 136 | 100.00% | 32 | 45% | 0.38 | - | 0% | 61 | |
| 55 Sub-Total FIRB Corporates | 48,354 | 91,163 | 40% | 84,651 | 0.44% | 2,033 | 47% | 2.04 | 34,388 | 41% | 156 | 485 |
| **Sovereign** | | | | | | | | | | | | |
| 56 0.00 to <0.15 | 223,259 | 5,478 | 21% | 224,405 | 0.02% | 173 | 9% | 2.71 | 4,544 | 2% | 5 | |
| 57 0.15 to <0.25 | 875 | 49 | 40% | 895 | 0.20% | 5 | 50% | 1.11 | 377 | 42% | 1 | |
| 58 0.25 to <0.50 | 1,314 | 2 | 62% | 1,315 | 0.26% | 4 | 50% | 0.82 | 607 | 46% | 2 | |
| 59 0.50 to <0.75 | 130 | 40 | 40% | 146 | 0.58% | 5 | 50% | 1.28 | 114 | 79% | - | |
| 60 0.75 to <2.50 | 1,281 | 22 | 40% | 1,289 | 1.32% | 16 | 50% | 0.09 | 1,275 | 99% | 9 | |
| 61 2.50 to <10.00 | 1,929 | - | 0% | 1,929 | 5.00% | 6 | 50% | 0.31 | 3,109 | 161% | 48 | |
| 62 10.00 to <100.00 | 27 | 306 | 1% | 29 | 22.26% | 8 | 50% | 0.13 | 81 | 276% | 3 | |
| 63 100.00 (Default) | - | - | 0% | - | 0.00% | - | 0% | - | - | 0% | - | |
| 64 Sub-Total FIRB Sovereign | 228,815 | 5,897 | 20% | 230,008 | 0.07% | 217 | 10% | 2.65 | 10,107 | 4% | 68 | 35 |
| **Financial Institutions** | | | | | | | | | | | | |
| 65 0.00 to <0.15 | 56,334 | 51,814 | 49% | 81,652 | 0.06% | 763 | 48% | 1.34 | 18,661 | 23% | 22 | |
| 66 0.15 to <0.25 | 1,200 | 1,916 | 25% | 1,687 | 0.20% | 72 | 46% | 1.43 | 820 | 49% | 2 | |
| 67 0.25 to <0.50 | 3,253 | 2,342 | 29% | 3,932 | 0.36% | 144 | 47% | 1.08 | 2,570 | 65% | 6 | |
| 68 0.50 to <0.75 | 672 | 380 | 40% | 826 | 0.58% | 109 | 43% | 1.51 | 624 | 76% | 2 | |
| 69 0.75 to <2.50 | 433 | 767 | 19% | 576 | 1.27% | 226 | 37% | 1.81 | 500 | 87% | 3 | |
| 70 2.50 to <10.00 | 9 | 7 | 78% | 14 | 5.24% | 20 | 38% | 2.22 | 22 | 154% | - | |
| 71 10.00 to <100.00 | 4 | 612 | 0% | 4 | 35.00% | 146 | 45% | 2.55 | 10 | 286% | 1 | |
| 72 100.00 (Default) | 4 | - | 73% | 4 | 100.00% | 9 | 50% | 2.84 | - | 0% | 2 | |
| 73 Sub-Total FIRB Financial Institutions | 61,909 | 57,838 | 46% | 88,695 | 0.09% | 1,489 | 47% | 1.34 | 23,207 | 26% | 38 | 187 |
| 74 Total FIRB | 339,078 | 154,898 | 41% | 403,354 | 0.15% | 3,739 | 26% | 2.24 | 67,702 | 17% | 262 | 707 |
---
# CR6: IRB – Credit risk exposures by portfolio and PD range (continued)
| Sep 25 | Original on balance sheet gross exposure $M | Off-balance sheet exposures $M | Average CCF % | EAD post CRM and post CCF $M | Average PD % | Number of Borrowers # | Average LGD % | Average maturity Yr | RWA $M | RWA density % | EL $M | Provisions $M |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| **RBNZ regulated entities** | | | | | | | | | | | | |
| **Corporates** | | | | | | | | | | | | |
| 75 0.00 to <0.15 | 4,645 | 3,909 | 92% | 8,173 | 0.07% | 266 | 52% | 2.81 | 2,172 | 27% | 3 | |
| 76 0.15 to <0.25 | 1,241 | 1,163 | 91% | 2,282 | 0.20% | 331 | 44% | 1.97 | 1,025 | 45% | 2 | |
| 77 0.25 to <0.50 | 6,043 | 2,468 | 87% | 8,110 | 0.37% | 3,632 | 32% | 2.25 | 3,423 | 42% | 9 | |
| 78 0.50 to <0.75 | 5,678 | 1,282 | 85% | 6,745 | 0.66% | 3,741 | 30% | 2.07 | 3,459 | 51% | 14 | |
| 79 0.75 to <2.50 | 8,996 | 1,594 | 91% | 10,425 | 1.42% | 6,929 | 31% | 2.07 | 7,055 | 68% | 46 | |
| 80 2.50 to <10.00 | 1,744 | 290 | 91% | 2,007 | 4.85% | 1,010 | 32% | 1.71 | 2,131 | 106% | 31 | |
| 81 10.00 to <100.00 | 906 | 219 | 91% | 1,105 | 21.29% | 1,758 | 39% | 1.29 | 2,293 | 208% | 95 | |
| 82 100.00 (Default) | 224 | 19 | 95% | 242 | 100.00% | 190 | 31% | 0.94 | 549 | 227% | 41 | |
| 83 Sub-Total NZ Corporates | 29,477 | 10,944 | 90% | 39,089 | 2.06% | 17,857 | 37% | 2.21 | 22,107 | 57% | 241 | 463 |
| **Residential Mortgages** | | | | | | | | | | | | |
| 84 0.00 to <0.15 | 14,967 | 6,903 | 105% | 22,207 | 0.08% | 160,950 | 16% | - | 856 | 4% | 3 | |
| 85 0.15 to <0.25 | 4,742 | 117 | 105% | 4,865 | 0.19% | 29,600 | 17% | - | 387 | 8% | 2 | |
| 86 0.25 to <0.50 | 33,149 | 801 | 105% | 33,989 | 0.37% | 166,381 | 18% | - | 4,797 | 14% | 23 | |
| 87 0.50 to <0.75 | 6,824 | 844 | 101% | 7,675 | 0.66% | 34,569 | 20% | - | 1,825 | 24% | 10 | |
| 88 0.75 to <2.50 | 29,743 | 295 | 106% | 30,056 | 1.38% | 132,660 | 21% | - | 11,565 | 38% | 85 | |
| 89 2.50 to <10.00 | 9,768 | 41 | 105% | 9,811 | 3.97% | 37,328 | 21% | - | 7,245 | 74% | 82 | |
| 90 10.00 to <100.00 | 425 | 12 | 106% | 438 | 11.38% | 1,817 | 21% | - | 535 | 122% | 10 | |
| 91 100.00 (Default) | 948 | 1 | 100% | 949 | 100.00% | 4,195 | 21% | - | 1,947 | 205% | 64 | |
| 92 Sub-Total NZ Residential Mortgage | 100,566 | 9,014 | 105% | 109,990 | 1.82% | 567,500 | 19% | - | 29,157 | 27% | 279 | 151 |
| **Other Retail** | | | | | | | | | | | | |
| 93 0.00 to <0.15 | 42 | 1,568 | 101% | 1,618 | 0.11% | 171,575 | 77% | - | 885 | 55% | 25 | |
| 94 0.15 to <0.25 | 111 | 834 | 101% | 954 | 0.19% | 126,469 | 78% | - | 553 | 58% | 14 | |
| 95 0.25 to <0.50 | 298 | 694 | 101% | 1,002 | 0.34% | 157,772 | 78% | - | 674 | 67% | 15 | |
| 96 0.50 to <0.75 | 216 | 289 | 110% | 533 | 0.61% | 53,635 | 81% | - | 404 | 76% | 5 | |
| 97 0.75 to <2.50 | 622 | 321 | 89% | 907 | 1.29% | 146,161 | 78% | - | 833 | 92% | 11 | |
| 98 2.50 to <10.00 | 658 | 260 | 104% | 928 | 4.58% | 162,923 | 86% | - | 1,251 | 135% | 35 | |
| 99 10.00 to <100.00 | 121 | 5 | 112% | 127 | 18.22% | 101,438 | 85% | - | 231 | 182% | 18 | |
| 100 100.00 (Default) | 31 | 4 | 100% | 34 | 100.00% | 7,223 | 81% | - | 159 | 465% | 18 | |
| 101 Sub-Total NZ Other Retail | 2,099 | 3,975 | 101% | 6,103 | 1.98% | 927,196 | 79% | - | 4,990 | 82% | 141 | 73 |
| 102 Total RBNZ regulated entities | 132,142 | 23,933 | 97% | 155,182 | 1.89% | 1,512,553 | 26% | 2.21 | 56,254 | 36% | 661 | 687 |
---
# CR6: IRB – Credit risk exposures by portfolio and PD range (continued)
| Mar 25 | Original on balance sheet gross exposure $M | Off-balance sheet exposures $M | Average CCF % | EAD post CRM and post CCF $M | Average PD % | Number of Borrowers # | Average LGD % | Average maturity Yr | RWA $M | RWA density % | EL $M | Provisions $M |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| **AIRB** | | | | | | | | | | | | |
| **Corporates** | | | | | | | | | | | | |
| 1 0.00 to <0.15 | 13,641 | 10,658 | 44% | 18,296 | 0.11% | 685 | 40% | 2.25 | 4,979 | 27% | 8 | |
| 2 0.15 to <0.25 | 8,498 | 6,398 | 40% | 11,076 | 0.20% | 1,204 | 34% | 2.38 | 4,309 | 39% | 8 | |
| 3 0.25 to <0.50 | 30,967 | 13,336 | 57% | 38,622 | 0.37% | 6,033 | 26% | 2.10 | 14,366 | 37% | 36 | |
| 4 0.50 to <0.75 | 24,672 | 6,714 | 65% | 29,060 | 0.65% | 7,793 | 22% | 2.19 | 12,919 | 44% | 42 | |
| 5 0.75 to <2.50 | 34,311 | 8,728 | 67% | 40,185 | 1.35% | 16,952 | 23% | 2.44 | 23,944 | 60% | 121 | |
| 6 2.50 to <10.00 | 3,328 | 588 | 53% | 3,639 | 4.30% | 2,253 | 21% | 2.12 | 2,632 | 72% | 33 | |
| 7 10.00 to <100.00 | 1,106 | 600 | 24% | 1,250 | 25.05% | 3,475 | 32% | 2.27 | 2,387 | 191% | 105 | |
| 8 100.00 (Default) | 964 | 53 | 66% | 999 | 100.00% | 864 | 30% | 2.80 | 1,043 | 104% | 247 | |
| 9 Sub-Total AIRB Corporates | 117,487 | 47,075 | 54% | 143,127 | 1.66% | 39,259 | 27% | 2.26 | 66,579 | 47% | 600 | 1,245 |
| **Residential Mortgages** | | | | | | | | | | | | |
| 10 0.00 to <0.15 | 126,780 | 21,426 | 100% | 148,255 | 0.08% | 407,409 | 13% | - | 10,133 | 7% | 15 | |
| 11 0.15 to <0.25 | 21,678 | 1,320 | 100% | 22,999 | 0.18% | 43,055 | 14% | - | 2,270 | 10% | 6 | |
| 12 0.25 to <0.50 | 70,184 | 2,688 | 100% | 72,873 | 0.36% | 176,852 | 14% | - | 11,546 | 16% | 38 | |
| 13 0.50 to <0.75 | 14,203 | 1,273 | 100% | 15,479 | 0.64% | 41,718 | 16% | - | 4,014 | 26% | 16 | |
| 14 0.75 to <2.50 | 68,637 | 6,915 | 100% | 75,552 | 1.26% | 179,890 | 17% | - | 32,177 | 43% | 158 | |
| 15 2.50 to <10.00 | 24,362 | 112 | 100% | 24,474 | 4.15% | 60,234 | 15% | - | 18,285 | 75% | 156 | |
| 16 10.00 to <100.00 | 2,524 | 20 | 100% | 2,543 | 18.53% | 6,405 | 18% | - | 3,886 | 153% | 84 | |
| 17 100.00 (Default) | 3,937 | 9 | 100% | 3,945 | 100.00% | 9,443 | 28% | - | 12,436 | 315% | 220 | |
| 18 Sub-Total AIRB Residential Mortgages | 332,305 | 33,763 | 100% | 366,120 | 1.88% | 925,006 | 15% | - | 94,747 | 26% | 693 | 651 |
---
# CR6: IRB – Credit risk exposures by portfolio and PD range (continued)
| Mar 25 | Original on balance sheet gross exposure $M | Off-balance sheet exposures $M | Average CCF % | EAD post CRM and post CCF $M | Average PD % | Number of Borrowers # | Average LGD % | Average maturity Yr | RWA $M | RWA density % | EL $M | Provisions $M |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| **AIRB** | | | | | | | | | | | | |
| **Retail SME** | | | | | | | | | | | | |
| 19 0.00 to <0.15 | 21 | 107 | 83% | 110 | 0.12% | 1,217 | 14% | - | 5 | 4% | - | |
| 20 0.15 to <0.25 | 19 | 50 | 81% | 60 | 0.19% | 553 | 17% | - | 4 | 7% | - | |
| 21 0.25 to <0.50 | 347 | 480 | 78% | 723 | 0.39% | 9,250 | 27% | - | 137 | 19% | 1 | |
| 22 0.50 to <0.75 | 226 | 278 | 63% | 402 | 0.65% | 10,364 | 38% | - | 143 | 35% | 1 | |
| 23 0.75 to <2.50 | 4,029 | 1,214 | 80% | 4,996 | 1.60% | 41,267 | 26% | - | 1,901 | 38% | 19 | |
| 24 2.50 to <10.00 | 7,475 | 1,415 | 93% | 8,796 | 4.42% | 57,940 | 29% | - | 4,877 | 55% | 109 | |
| 25 10.00 to <100.00 | 917 | 90 | 91% | 999 | 16.78% | 28,661 | 50% | - | 1,260 | 126% | 77 | |
| 26 100.00 (Default) | 487 | 36 | 98% | 523 | 100.00% | 5,757 | 40% | - | 1,231 | 235% | 174 | |
| 27 Sub-Total AIRB Retail SME | 13,521 | 3,670 | 84% | 16,609 | 7.02% | 155,009 | 30% | - | 9,558 | 58% | 381 | 517 |
| **Qualifying Revolving Retail (QRR)** | | | | | | | | | | | | |
| 28 0.00 to <0.15 | 1,495 | 6,004 | 74% | 5,938 | 0.11% | 641,900 | 74% | - | 308 | 5% | 5 | |
| 29 0.15 to <0.25 | 175 | 875 | 73% | 811 | 0.19% | 111,495 | 74% | - | 68 | 8% | 1 | |
| 30 0.25 to <0.50 | 630 | 1,973 | 77% | 2,148 | 0.36% | 259,648 | 75% | - | 302 | 14% | 6 | |
| 31 0.50 to <0.75 | 164 | 267 | 96% | 420 | 0.65% | 38,814 | 74% | - | 94 | 22% | 2 | |
| 32 0.75 to <2.50 | 1,095 | 894 | 99% | 1,976 | 1.35% | 192,619 | 79% | - | 814 | 41% | 21 | |
| 33 2.50 to <10.00 | 827 | 235 | 125% | 1,121 | 4.07% | 112,903 | 82% | - | 1,057 | 94% | 37 | |
| 34 10.00 to <100.00 | 177 | 30 | 130% | 215 | 19.77% | 30,378 | 81% | - | 453 | 210% | 34 | |
| 35 100.00 (Default) | 38 | 2 | 100% | 40 | 100.00% | 4,817 | 76% | - | 59 | 148% | 27 | |
| 36 Sub-Total AIRB QRR | 4,601 | 10,280 | 78% | 12,669 | 1.38% | 1,392,574 | 76% | - | 3,155 | 25% | 133 | 214 |
| **Other Retail** | | | | | | | | | | | | |
| 37 0.00 to <0.15 | 5 | 36 | 99% | 41 | 0.09% | 20,891 | 78% | - | 8 | 19% | - | |
| 38 0.15 to <0.25 | - | 1 | 72% | 1 | 0.19% | 4 | 84% | - | - | 36% | - | |
| 39 0.25 to <0.50 | 7 | 21 | 116% | 31 | 0.36% | 43,514 | 77% | - | 15 | 49% | - | |
| 40 0.50 to <0.75 | 3 | 2 | 124% | 6 | 0.65% | 14,311 | 76% | - | 4 | 69% | - | |
| 41 0.75 to <2.50 | 620 | 62 | 111% | 689 | 1.26% | 198,812 | 77% | - | 650 | 94% | 7 | |
| 42 2.50 to <10.00 | 527 | 23 | 105% | 551 | 3.89% | 109,932 | 78% | - | 673 | 122% | 17 | |
| 43 10.00 to <100.00 | 82 | 3 | 105% | 85 | 30.02% | 23,756 | 78% | - | 174 | 204% | 20 | |
| 44 100.00 (Default) | 53 | - | 100% | 54 | 100.00% | 20,709 | 80% | - | 112 | 209% | 41 | |
| 45 Sub-Total AIRB Other Retail | 1,297 | 148 | 107% | 1,458 | 7.54% | 431,929 | 78% | - | 1,636 | 112% | 85 | 130 |
| 46 Total AIRB | 469,211 | 94,936 | 75% | 539,983 | 1.99% | 2,943,777 | 20% | 2.26 | 175,675 | 33% | 1,892 | 2,757 |
---
# CR6: IRB – Credit risk exposures by portfolio and PD range (continued)
| Mar 25 | Original on balance sheet gross exposure $M | Off-balance sheet exposures $M | Average CCF % | EAD post CRM and post CCF $M | Average PD % | Number of Borrowers # | Average LGD % | Average maturity Yr | RWA $M | RWA density % | EL $M | Provisions $M |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| **FIRB** | | | | | | | | | | | | |
| **Corporates** | | | | | | | | | | | | |
| 47 0.00 to <0.15 | 28,377 | 56,618 | 41% | 51,525 | 0.09% | 732 | 46% | 1.94 | 12,769 | 25% | 20 | |
| 48 0.15 to <0.25 | 11,493 | 15,232 | 39% | 17,372 | 0.20% | 442 | 49% | 2.07 | 7,894 | 45% | 17 | |
| 49 0.25 to <0.50 | 11,070 | 13,970 | 41% | 16,796 | 0.34% | 477 | 47% | 2.11 | 10,085 | 60% | 27 | |
| 50 0.50 to <0.75 | 1,267 | 4,118 | 27% | 2,377 | 0.59% | 120 | 42% | 1.84 | 1,702 | 72% | 6 | |
| 51 0.75 to <2.50 | 1,381 | 1,326 | 43% | 1,951 | 1.22% | 108 | 37% | 1.59 | 1,541 | 79% | 8 | |
| 52 2.50 to <10.00 | 11 | 149 | 72% | 119 | 7.74% | 15 | 3% | 1.02 | 11 | 9% | - | |
| 53 10.00 to <100.00 | 193 | 64 | 54% | 228 | 21.23% | 15 | 46% | 1.17 | 584 | 256% | 22 | |
| 54 100.00 (Default) | 264 | 104 | 48% | 314 | 100.00% | 29 | 48% | 0.43 | 1 | 0% | 150 | |
| 55 Sub-Total FIRB Corporates | 54,056 | 91,581 | 40% | 90,682 | 0.60% | 1,938 | 46% | 1.98 | 34,587 | 38% | 250 | 487 |
| **Sovereign** | | | | | | | | | | | | |
| 56 0.00 to <0.15 | 245,516 | 5,893 | 29% | 247,227 | 0.02% | 220 | 9% | 2.39 | 4,699 | 2% | 5 | |
| 57 0.15 to <0.25 | 1,275 | 80 | 40% | 1,307 | 0.20% | 6 | 50% | 1.14 | 554 | 42% | 1 | |
| 58 0.25 to <0.50 | 1,432 | 44 | 41% | 1,450 | 0.27% | 5 | 50% | 0.81 | 684 | 47% | 2 | |
| 59 0.50 to <0.75 | 126 | 26 | 40% | 137 | 0.58% | 5 | 50% | 1.63 | 111 | 81% | - | |
| 60 0.75 to <2.50 | 1,221 | 173 | 89% | 1,375 | 1.32% | 44 | 50% | 1.28 | 1,360 | 99% | 9 | |
| 61 2.50 to <10.00 | 2,183 | - | 0% | 2,183 | 5.00% | 6 | 50% | 0.29 | 3,519 | 161% | 55 | |
| 62 10.00 to <100.00 | 16 | 161 | 2% | 20 | 23.91% | 7 | 50% | 0.09 | 56 | 278% | 2 | |
| 63 100.00 (Default) | - | - | 100% | - | 100.00% | - | 50% | - | - | 0% | - | |
| 64 Sub-Total FIRB Sovereign | 251,769 | 6,377 | 30% | 253,699 | 0.07% | 293 | 10% | 2.35 | 10,983 | 4% | 74 | 34 |
| **Financial Institutions** | | | | | | | | | | | | |
| 65 0.00 to <0.15 | 58,041 | 53,624 | 51% | 85,161 | 0.06% | 764 | 48% | 1.27 | 19,046 | 22% | 24 | |
| 66 0.15 to <0.25 | 902 | 2,443 | 33% | 1,701 | 0.20% | 67 | 51% | 1.41 | 917 | 54% | 2 | |
| 67 0.25 to <0.50 | 3,082 | 2,753 | 32% | 3,972 | 0.35% | 149 | 48% | 0.82 | 2,601 | 65% | 7 | |
| 68 0.50 to <0.75 | 823 | 350 | 18% | 886 | 0.59% | 96 | 49% | 0.72 | 750 | 85% | 3 | |
| 69 0.75 to <2.50 | 325 | 568 | 19% | 432 | 1.28% | 210 | 42% | 2.02 | 402 | 93% | 2 | |
| 70 2.50 to <10.00 | 5 | 7 | 78% | 11 | 4.09% | 19 | 41% | 2.48 | 18 | 162% | - | |
| 71 10.00 to <100.00 | 15 | 551 | 0% | 15 | 34.86% | 174 | 48% | 4.40 | 47 | 316% | 3 | |
| 72 100.00 (Default) | 4 | - | 83% | 4 | 100.00% | 16 | 50% | 4.28 | - | 0% | 2 | |
| 73 Sub-Total FIRB Financial Institutions | 63,197 | 60,296 | 48% | 92,182 | 0.09% | 1,495 | 48% | 1.25 | 23,781 | 26% | 43 | 214 |
| 74 Total FIRB | 369,022 | 158,254 | 43% | 436,563 | 0.19% | 3,726 | 25% | 2.04 | 69,351 | 16% | 367 | 735 |
---
# CR6: IRB – Credit risk exposures by portfolio and PD range (continued)
| Mar 25 | Original on balance sheet gross exposure $M | Off-balance sheet exposures $M | Average CCF % | EAD post CRM and post CCF $M | Average PD % | Number of Borrowers # | Average LGD % | Average maturity Yr | RWA $M | RWA density % | EL $M | Provisions $M |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| **RBNZ regulated entities** | | | | | | | | | | | | |
| **Corporates** | | | | | | | | | | | | |
| 75 0.00 to <0.15 | 4,097 | 5,457 | 76% | 8,206 | 0.07% | 254 | 52% | 2.94 | 2,216 | 27% | 3 | |
| 76 0.15 to <0.25 | 680 | 1,066 | 93% | 1,636 | 0.20% | 333 | 50% | 1.93 | 807 | 49% | 2 | |
| 77 0.25 to <0.50 | 6,126 | 2,288 | 88% | 8,078 | 0.37% | 3,557 | 29% | 2.11 | 3,095 | 38% | 9 | |
| 78 0.50 to <0.75 | 6,064 | 1,408 | 88% | 7,284 | 0.65% | 3,849 | 31% | 2.07 | 3,881 | 53% | 15 | |
| 79 0.75 to <2.50 | 9,118 | 1,856 | 88% | 10,733 | 1.40% | 6,790 | 32% | 1.91 | 7,253 | 68% | 48 | |
| 80 2.50 to <10.00 | 1,745 | 198 | 96% | 1,935 | 4.79% | 1,116 | 30% | 1.62 | 1,899 | 98% | 28 | |
| 81 10.00 to <100.00 | 940 | 139 | 93% | 1,068 | 22.71% | 1,728 | 40% | 1.14 | 2,356 | 221% | 104 | |
| 82 100.00 (Default) | 260 | 20 | 96% | 279 | 100.00% | 192 | 32% | 0.75 | 451 | 162% | 60 | |
| 83 Sub-Total NZ Corporates | 29,030 | 12,432 | 83% | 39,219 | 2.17% | 17,819 | 37% | 2.15 | 21,958 | 56% | 269 | 477 |
| **Residential Mortgages** | | | | | | | | | | | | |
| 84 0.00 to <0.15 | 14,747 | 6,918 | 105% | 22,005 | 0.08% | 155,497 | 16% | - | 825 | 4% | 3 | |
| 85 0.15 to <0.25 | 4,545 | 117 | 105% | 4,667 | 0.19% | 28,478 | 17% | - | 355 | 8% | 1 | |
| 86 0.25 to <0.50 | 33,628 | 836 | 105% | 34,506 | 0.37% | 163,141 | 18% | - | 4,727 | 14% | 23 | |
| 87 0.50 to <0.75 | 6,839 | 827 | 101% | 7,674 | 0.66% | 33,808 | 19% | - | 1,747 | 23% | 10 | |
| 88 0.75 to <2.50 | 30,308 | 304 | 106% | 30,631 | 1.37% | 132,375 | 20% | - | 11,481 | 37% | 85 | |
| 89 2.50 to <10.00 | 10,177 | 41 | 106% | 10,219 | 4.00% | 38,316 | 21% | - | 7,379 | 72% | 84 | |
| 90 10.00 to <100.00 | 437 | 14 | 106% | 451 | 11.50% | 1,873 | 20% | - | 516 | 114% | 10 | |
| 91 100.00 (Default) | 1,034 | 1 | 100% | 1,035 | 100.00% | 4,405 | 20% | - | 156 | 15% | 203 | |
| 92 Sub-Total NZ Residential Mortgage | 101,715 | 9,058 | 105% | 111,188 | 1.91% | 557,893 | 18% | - | 27,186 | 24% | 419 | 174 |
| **Other Retail** | | | | | | | | | | | | |
| 93 0.00 to <0.15 | 43 | 1,566 | 101% | 1,617 | 0.11% | 164,163 | 77% | - | 884 | 55% | 25 | |
| 94 0.15 to <0.25 | 120 | 936 | 101% | 1,064 | 0.19% | 132,119 | 78% | - | 615 | 58% | 16 | |
| 95 0.25 to <0.50 | 302 | 717 | 101% | 1,030 | 0.34% | 156,215 | 78% | - | 691 | 67% | 15 | |
| 96 0.50 to <0.75 | 228 | 307 | 109% | 564 | 0.62% | 54,005 | 81% | - | 430 | 76% | 5 | |
| 97 0.75 to <2.50 | 655 | 311 | 90% | 934 | 1.28% | 149,414 | 78% | - | 871 | 93% | 12 | |
| 98 2.50 to <10.00 | 662 | 253 | 104% | 926 | 4.59% | 170,368 | 86% | - | 1,258 | 136% | 36 | |
| 99 10.00 to <100.00 | 128 | 4 | 113% | 133 | 18.46% | 109,909 | 86% | - | 246 | 185% | 20 | |
| 100 100.00 (Default) | 35 | 3 | 100% | 38 | 100.00% | 7,335 | 81% | - | 3 | 8% | 28 | |
| 101 Sub-Total NZ Other Retail | 2,173 | 4,097 | 101% | 6,306 | 2.03% | 943,528 | 79% | - | 4,998 | 79% | 157 | 92 |
| 102 Total RBNZ regulated entities | 132,918 | 25,587 | 94% | 156,713 | 1.98% | 1,519,240 | 26% | 2.15 | 54,142 | 35% | 845 | 743 |
---
# CR7: IRB – Effect on RWA of credit derivatives used as CRM techniques
The table below shows the effect of credit derivatives on the IRB credit risk approach.$^{1}$
| | Sep 25 | | Mar 25 | |
| --- | --- | --- | --- | --- |
| | Pre-credit derivatives RWA $M | Actual RWA $M | Pre-credit derivatives RWA $M | Actual RWA $M |
| 1 Sovereign – FIRB | 10,107 | 10,107 | 10,983 | 10,983 |
| 3 Financial Institutions – FIRB | 23,207 | 23,207 | 23,781 | 23,781 |
| 5 Corporate – FIRB | 34,388 | 34,388 | 34,587 | 34,587 |
| 6 Corporate – AIRB | 63,726 | 63,726 | 66,579 | 66,579 |
| 8 Specialised lending | 5,901 | 5,901 | 6,929 | 6,929 |
| 9 Retail – qualifying revolving (QRRE) | 3,032 | 3,032 | 3,155 | 3,155 |
| 10 Retail – residential mortgage exposures | 94,135 | 94,135 | 94,747 | 94,747 |
| 11 Retail – SME | 9,419 | 9,419 | 9,558 | 9,558 |
| 12 Other retail exposures | 1,642 | 1,642 | 1,636 | 1,636 |
| 17 RBNZ regulated entities | 64,140 | 64,140 | 62,573 | 62,573 |
| 18 **Total** | **309,697** | **309,697** | **314,528** | **314,528** |
$^{1}$ ANZ does not have any credit derivatives with CRM impact in the banking book. Hence both columns are identical.
# CR8: RWA flow statements of credit risk exposures under IRB
The table below presents the changes in IRB RWA amounts over the reporting period for the key drivers of credit risk$^{1}$.
| | Sep 25 RWA Amount $M | Jun 25 RWA Amount $M | Mar 25 RWA Amount $M |
| --- | --- | --- | --- |
| 1 RWA as at end of previous reporting period | 320,412 | 314,528 | 313,949 |
| 2 Asset size | (5,524) | 5,083 | 409 |
| 3 Asset quality | (1,628) | (28) | 613 |
| 4 Model updates | - | - | - |
| 5 Methodology and policy | 1,312 | 939 | (340) |
| 6 Acquisitions and disposals | - | - | - |
| 7 Foreign exchange movements | (4,271) | (110) | (103) |
| 8 Other$^{2}$ | (604) | - | - |
| 9 **RWA as at end of reporting period** | **309,697** | **320,412** | **314,528** |
$^{1}$ The attribution of Credit RWA movements requires assumptions and judgement; different assumptions could lead to different attributions. This table presents the contribution of changes in Credit RWA amounts under the IRB approach only and hence may not directly reconcile to Group level Credit RWA attributions.
$^{2}$ The September