ANZ Bank New Zealand Disclosure Statement

Australia and New Zealand Banking Group Limited
9/833 Collins Street Docklands Victoria 3008 Australia
ABN 11 005 357 522
10 November 2025

Market Announcements Office
ASX Limited
Exchange Place
Level 27
39 Martin Place
SYDNEY NSW 2000

ANZ Bank New Zealand Limited
Registered Bank Disclosure Statement


Australia and New Zealand Banking Group Limited (ANZ) today released ANZ Bank New Zealand Limited’s
Registered Bank Disclosure Statement for the year ended 30 September 2025.
It has been approved for distribution by ANZ’s Continuous Disclosure Committee.

Yours faithfully

Simon Pordage
Company Secretary
Australia and New Zealand Banking Group Limited

ANZ Bank New Zealand Limited
Annual Report and Registered Bank Disclosure Statement
For the year ended 30 September 2025

Contents
Annual report 2
Glossary2
Disclosure Statement
Financial Statements 3
Consolidated financial statements 4
Notes to the consolidated financial statements 8
Independent auditor’s report 68
Registered Bank Disclosures
7
4
Directors' statement 110
Assurance reports 111
A
nnual Report
For the year ended 30 September 2025
Pursuant to section 211(3) of the Companies Act 1993, the shareholder of the Bank has agreed that the Annual Report of
the Banking Group need not comply with any of the paragraphs (a), and (e) to (j) of subsection (1) and subsection (2) of
section 211.
Accordingly, there is no information to be provided in this Annual Report other than the financial statements for the year
ended 30 September 2025 and the assurance report on those financial statements.
The Bank is a climate reporting entity and is required to annually prepare group climate statements under the Financial
Markets Conduct Act 2013 and the Aotearoa New Zealand Climate Standards. The Banking Group’s climate statement for
the financial year ending 30 September 2025 will be accessible at the website anz.co.nz/about-us/corporate-
responsibility/environment/ no later than 31 January 2026.
For and on behalf of the Board of Directors:
Scott St John
Chair
7 November 2025
G
lossary
In this Registered Bank Disclosure Statement (Disclosure Statement) unless the context otherwise requires:
Bank means ANZ Bank New Zealand Limited.
Banking Group, We or Our means the Bank and all its controlled entities.
Immediate Parent Company means ANZ Holdings (New Zealand) Limited.
Ultimate Non-Bank Holding Company, ANZGHL means ANZ Group Holdings Limited.
ANZ Group means the worldwide operations of ANZGHL including its controlled entities.
Ultimate Parent Bank, ANZBGL means Australia and New Zealand Banking Group Limited.
Overseas Banking Group means the worldwide operations of the Ultimate Parent Bank including its controlled entities.
New Zealand business means all business, operations, or undertakings conducted in or from New Zealand identified and
treated as if it were conducted by a company formed and registered in New Zealand.
NZ Branch means the New Zealand business of the Ultimate Parent Bank.
ANZBGL New Zealand means the New Zealand business of the Overseas Banking Group.
ANZ New Zealand means the New Zealand business of the ANZ Group.
Registered o ffice and address for service is Ground Floor, ANZ Centre, 23-29 Albert Street, Auckland, New Zealand.
RBNZ means the Reserve Bank of New Zealand.
APRA means the Australian Prudential Regulation Authority.
Order means the Registered Bank Disclosure Statements (New Zealand Incorporated Registered Banks) Order 2014.
Any term or expression which is defined in, or in the manner prescribed by, the Order shall have the meaning given in or
p
rescribed by the Order.
Antoni

a Watson
Executive Director
7 November 2025

Financial Statements


Contents

Consolidated Financial Statements
Income Statement 4
Statement of Comprehensive Income 4
Balance Sheet 5
Cash Flow Statement 6
Statement of Changes in Equity 7




Notes to the Consolidated
Financial Statements

Non-financial assets


18. Goodwill and other intangible assets 51
Basis of preparation
1. About our financial statements 8 Non-financial liabilities

19. Other provisions 55
Financial performance
2. Operating income 10 Equity
3. Operating expenses 12 20. Shareholders’ equity 56
4. Income tax 13 21. Capital management 58
5. Dividends 14
6. Segment reporting 15 Consolidation and presentation
22. Controlled entities 60
Financial assets 23. Structured entities 61
7. Cash and cash equivalents 16 24. Assets pledged, collateral accepted,


8. Trading securities 17 and financial assets transferred 63
9. Derivative financial instruments 18
10. Investment securities 23 Other disclosures
11. Net loans and advances 24 25. Related party disclosures 64
12. Allowance for expected credit losses 25 26. Commitments and contingent liabilities 66
27. Auditor fees 67
Financial liabilities
13. Deposits and other borrowings 31 Independent auditor’s report 68
14. Debt issuances 32



Financial instrument disclosures

15. Financial risk management 34

16. Fair value of financial assets and financial
liabilities 47



17. Offsetting 50

ANZ Bank New Zealand Limited Consolidated financial statements



4
Income Statement


2025 2024
For the year ended 30 September Note NZ$m NZ$m
Interest income 10,532 11,914
Interest expense (5,880) (7,512)
Net interest income 2 4,652 4,402
Other operating income 2 902 480
Operating income
5,554 4,882
Operating expenses 3 (1,812) (1,760)
Profit before credit impairment and income tax 3,742 3,122
Credit impairment release/(charge) 12 25 (44)
Profit before income tax 3,767 3,078
Income tax expense 4 (1,053) (870)
Profit for the year 2,714 2,208



Statement of Comprehensive Income

2025 2024
For the year ended 30 September NZ$m NZ$m
Profit for the year 2,714 2,208

Other comprehensive income

Items that will not be reclassified subsequently to profit or loss
Actuarial gain on defined benefit schemes 18 3

Items that may be reclassified subsequently to profit or loss
Reserve movements:
Unrealised gains recognised directly in equity 149 164
Realised gains transferred to the income statement
(4) (2)

Income tax attributable to the above items (45) (46)
Total comprehensive income for the year 2,832 2,327

The notes appearing on pages 8 to 67 form an integral part of these financial statements.

ANZ Bank New Zealand Limited Consolidated financial statements
5
Balance Sheet
2025 2024
As at 30 September Note NZ$m NZ$m
Assets
Cash and cash equivalents 7 9,386 11,634
Settlement balances receivable 1,620 574
Collateral paid 1,114 1,041
Trading securities 8 6,348 5,576
Derivative financial instruments 9 11,449 10,181
Investment securities 10 16,458 13,295
Net loans and advances
11 158,683 151,666
Deferred tax assets
4 392 418
Goodwill and other intangible assets 18 3,100 3,094
Premises and equipment 324 363
Other assets 1,115 1,334
Total assets 209,989 199,176
Liabilities
Settlement balances payable 4,614 5,367
Collateral received 1,725 525
Deposits and other borrowings 13 153,282 142,645
Derivative financial instruments 9 10,408 11,179
Current tax liabilities 357 279
Payables and other liabilities 1,559 2,415
Employee entitlements 122 121
Other provisions 19 225 212
Debt issuances 14 17,799 17,623
Total liabilities 190,091 180,366
Net assets 19,898 18,810
Shareholders' equity
Share capital 20 17,680 17,680
Reserves 20 129 24
Retained earnings 20 2,089 1,106
Total shareholders' equity 20 19,898 18,810
The notes appearing on pages 8 to 67 form an integral part of these financial statements.
For and on behalf of the Board of Directors:
Antonia Watson
Executive Director
7 November 2025
Scott St John
Chair
7 November 2025

ANZ Bank New Zealand Limited Consolidated financial statements



6
Cash Flow Statement




2025 2024
For the year ended 30 September

NZ$m NZ$m
Profit for the year

2,714 2,208
Adjustments to reconcile to net cash provided by/(used in) operating activities:


Depreciation and amortisation 103 109
Impairment of premises and equipment and lease remeasurements
5 1
Net derivatives/foreign exchange adjustment
(842) 713
Other non-cash movements
(171) (88)
Net (increase)/decrease in operating assets:
Collateral paid (73) (240)
Trading securities (772) 345
Net loans and advances
(7,017) (2,345)
Other assets (801) (352)
Net increase/(decrease) in operating liabilities:
Deposits and other borrowings (excluding items included in financing activities) 12,200 2,087
Settlement balances payable
(753) 2,447
Collateral received
1,200 (975)
Other liabilities (745) 660
Total adjustments

2,334 2,362
Net cash provided by operating activities
1


5,048 4,570
Cash flows from investing activities


Investment securities:
Purchases (4,839) (4,297)
Proceeds from sale or maturity 2,212 2,905
Other assets
(48) (35)
Net cash used in investing activities

(2,675) (1,427)
Cash flows from financing activities


Deposits and other borrowings
2
(1,563) (1,072)
Debt issuances:
3

Issue proceeds 1,689 1,707
Redemptions
(2,955) (3,250)
Proceeds from issue of perpetual preference shares - 1,138
Redemption of perpetual preference shares
- (300)
Repayment of lease liabilities (48) (50)
Dividends paid
4
(1,744) (2,776)
Net cash used in financing activities

(4,621) (4,603)
Net change in cash and cash equivalents (2,248) (1,460)
Cash and cash equivalents at beginning of year 11,634 13,094
Cash and cash equivalents at end of year

9,386 11,634
1.
Net cash provided by operating activities includes income taxes paid of NZ$994 million (2024: NZ$734 million).
2.
Movement in deposits and other borrowings include repayments of repurchase transactions entered into with the RBNZ under the Term Lending Facility of NZ$63 million (2024: NZ$72 million) and
NZ$1,500 million under the Funding for Lending Programme (2024: NZ$1,000 million).
3.
Movement in debt issuances (Note 14 Debt issuances) also includes a NZ$1,362 million increase (2024: NZ$794 million decrease) from the effect of foreign exchange rates, a NZ$91 million increase
(2024: NZ$811 million increase) from changes in fair value hedging instruments and a NZ$11 million decrease (2024: NZ$2 million increase) from other changes.
4.
In the prior year, non-cash dividends paid to the Immediate Parent Company of NZ$900 million in June 2024 and NZ$3,500 million in August 2024 were used to purchase ordinary shares in the Bank.

The notes appearing on pages 8 to 67 form an integral part of these financial statements.

ANZ Bank New Zealand Limited Consolidated financial statements
7
Statement of Changes in Equity
Share
capital Reserves
Retained
earnings
Total
shareholders'
equity
NZ$m NZ$m NZ$m NZ$m
As at 1 October 2023 12,438 (93)6,07618,421
Profit or loss for the year - - 2,208 2,208
Other comprehensive income for the year -1172 119
Total comprehensive income for the year
-1172,210 2,327
Transactions with equity holders in their capacity as equity owners:
Ordinary shares issued 4,400 - - 4,400
Ordinary shares dividends paid
- - (7,125) (7,125)
Perpetual preference shares issued (net of issue costs) 1,142 -(4)1,138
Perpetual preference shares redeemed
(300)-- (300)
Perpetual preference shares dividends paid --(51) (51)
As at 30 September 2024 17,680 24 1,106 18,810
Profit or loss for the year - - 2,714 2,714
Other comprehensive income for the year -10513 118
Total comprehensive income for the year
-1052,727 2,832
Transactions with equity holders in their capacity as equity owners:
Ordinary shares dividends paid - - (1,650) (1,650)
Perpetual preference shares dividends paid - - (94) (94)
As at 30 September 2025 17,680 129 2,089 19,898
The notes appearing on pages 8 to 67 form an integral part of these financial statements.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



8
Notes to the Consolidated
Financial Statements
1. About our financial statements
General information
These are the consolidated financial statements for ANZ Bank New Zealand Limited (the Bank) and its controlled entities (together, the Banking Group) for
the year ended 30 September 2025. The Bank is incorporated and domiciled in New Zealand. The address of the Bank's registered office and its principal
place of business is Ground Floor, ANZ Centre, 23-29 Albert Street, Auckland, New Zealand.
On 7 November 2025, the Directors resolved to authorise the issue of these financial statements.
Information in the financial statements is included only to the extent we consider it material and relevant to the understanding of the financial statements.
A disclosure is considered material and relevant if, for example:
• the amount is significant in size (quantitative factor);
• the information is significant by nature (qualitative factor);
• the user cannot understand the Banking Group’s results without the specific disclosure (qualitative factor);
• the information is critical to a user’s understanding of the impact of significant changes in the Banking Group’s business during the period – for
example, business acquisitions or disposals (qualitative factor);
• the information relates to an aspect of the Banking Group’s operations that is important to its future performance (qualitative factor); and
• the information is required under legislative or other regulatory requirements.
This section of the financial statements:
• outlines the basis upon which the Banking Group’s financial statements have been prepared; and
• discusses any new accounting standards or regulations that directly impact the financial statements.
Basis of preparation
These financial statements are general purpose (Tier 1) financial statements prepared by a ‘for profit’ entity, in accordance with the requirements of the
Financial Markets Conduct Act 2013. These financial statements comply with:
• New Zealand Generally Accepted Accounting Practice (NZ GAAP), as defined in the Financial Reporting Act 2013;
• New Zealand equivalents to International Financial Reporting Standards (NZ IFRS) and other applicable Financial Reporting Standards, as appropriate
for publicly accountable for-profit entities; and
• International Financial Reporting Standards (IFRS).
We present the financial statements of the Banking Group in New Zealand dollars, which is the Banking Group’s functional and presentation currency. We
have rounded values to the nearest million dollars (NZ$m), unless otherwise stated.
Certain comparative amounts have been restated to conform with the basis of presentation in the current year.
Basis of measurement and presentation
The financial information has been prepared on a historical cost basis - except the following assets and liabilities which we have stated at their fair value:
• derivative financial instruments and in the case of fair value hedging, a fair value adjustment made to the underlying hedged item;
• financial instruments held for trading;
• financial assets and financial liabilities designated at fair value through profit or loss (FVTPL); and
• financial assets at fair value through other comprehensive income (FVOCI).
Basis of consolidation
The consolidated financial statements of the Banking Group comprise the financial statements of the Bank and all its subsidiaries. An entity, including a
structured entity, is considered a subsidiary of the Banking Group when we determine that the Banking Group has control over the entity. Control exists
when the Banking Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power over the entity. We assess power by examining existing rights that give the Banking Group the current ability to direct the relevant
activities of the entity. We have eliminated, on consolidation, the effect of all transactions between entities in the Banking Group.
Foreign currency translation
Transactions and balances
Foreign currency transactions are translated into the relevant functional currency at the exchange rate prevailing at the date of the transaction. At the
reporting date, monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the relevant spot rate. Any
foreign currency translation gains or losses that arise are included in profit or loss in the period they arise.
We measure translation differences on non-monetary items classified as FVTPL and report them as part of the fair value gain or loss on these items. For
non-monetary items classified as investment securities measured at FVOCI, translation differences are included in other comprehensive income.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



9

1. About our financial statements (continued)
Fiduciary activities
The Banking Group provides fiduciary services to third parties including custody, nominee and trustee services. This involves the Banking Group holding
assets on behalf of third parties and making decisions regarding the purchase and sale of financial instruments. If the Banking Group is not the beneficial
owner or does not control the assets, then we do not recognise these transactions in these financial statements, except when required by accounting
standards or another legislative requirement.



In the process of applying the Banking Group’s accounting policies, management has made a number of judgements and applied estimates
and assumptions about past and future events. Further information on the key judgements and estimates that we consider material to the
financial statements are contained within each relevant note to the financial statements.
The global economy continues to face challenges reflecting the impacts of global uncertainties from continuing trade and geopolitical tensions,
and impacts from climate change, which contribute to an elevated level of estimation uncertainty involved in the preparation of these financial
statements.
The Banking Group is exposed to climate risk either directly through its operations or indirectly, for example, through lending to customers.
Climate risk may also be a driver of other risks within our risk management framework. Our most material climate risks arise from lending to
business and retail customers, which contribute to credit risk.
The Banking Group made various accounting estimates in these financial statements based on forecasts of economic conditions which reflect
expectations and assumptions at 30 September 2025 about future events considered reasonable in the circumstances. Thus, there is a
considerable degree of judgement involved in preparing these estimates. Actual economic conditions are likely to be different from those
forecast since anticipated events frequently do not occur as expected, and the effect of these differences may significantly impact accounting
estimates included in these financial statements. The significant accounting estimates impacted by these forecasts and associated
uncertainties are predominantly related to expected credit losses and recoverable amounts of non-financial assets.
The impact of these uncertainties on each of these accounting estimates is discussed in the relevant notes in these financial statements,
along with assumptions and judgements made in relation to other key estimates. Readers should consider these disclosures in light of the
uncertainties described above.

Accounting standards adopted in the period
Accounting policies have been consistently applied, unless otherwise noted.
Lease Liability in a Sale and Leaseback
Amendments to New Zealand Accounting Standards – Lease Liability in a Sale and Leaseback amends NZ IFRS 16 Leases and specifies the accounting
for variable lease payments by seller-lessees in sale and leaseback transactions. The amendment was effective from 1 October 2024 and did not have a
material impact on the Banking Group.
Accounting standards not early adopted
A number of new standards, amendments to standards and interpretations have been published but are not mandatory for the financial statements for
the year ended 30 September 2025 and have not been applied by the Banking Group in preparing these financial statements. Further details of these are
set out below.
NZ IFRS 18 Presentation and Disclosure in Financial Statements
In May 2024, the External Reporting Board (XRB) issued NZ IFRS 18 Presentation and Disclosure in Financial Statements (NZ IFRS 18) which updates and
replaces requirements for the presentation and disclosure of information in financial statements. NZ IFRS 18 introduces new defined subtotals to be
presented in the consolidated income statement, disclosure of management-defined performance measures and requirements for grouping of
information. This standard will be effective for the financial year beginning 1 October 2027. We are currently assessing the impact of adopting this
standard.
Classification and measurement amendments to NZ IFRS 9 Financial Instruments
In June 2024, the XRB issued Amendments to the Classification and Measurement of Financial Instruments which amends requirements related to settling
financial liabilities using an electronic payment system and assessing contractual cash flow characteristics of financial assets with environmental, social
and corporate governance and similar features. The amendments will be effective for the financial year beginning 1 October 2026. We are currently
assessing the impact of adopting this standard.
Nature dependent electricity contracts
In May 2025, the XRB issued Amendments to NZ IFRS 9 Financial Instruments and NZ IFRS 7 Financial Instruments: Disclosures – Contracts Referencing
Nature Dependent Electricity which enhances guidance on the application of the ‘own use’ exemption on nature dependent power purchase agreements
(PPAs) and hedge accounting requirements for PPAs that are classified as derivative financial instruments. The amendments also introduce new disclosure
requirements for certain PPAs. The amendments will be effective for the financial year beginning 1 October 2026. We are currently assessing the impact
of adopting these amendments.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



10
2. Operating income

2025 2024

NZ$m NZ$m
Net interest income


Interest income by type of financial asset


Financial assets at amortised cost

9,707 11,226
Trading securities

231 249
Investment securities

542 409
Financial assets at FVTPL

52 30
Interest income

10,532 11,914
Interest expense by type of financial liability


Financial liabilities at amortised cost

(5,709) (7,284)
Financial liabilities designated at FVTPL

(171) (228)
Interest expense

(5,880) (7,512)
Net interest income

4,652 4,402



Other operating income


Fee and commission income


Lending fees

21 19
Non-lending fees

713 715
Commissions

28 29
Funds management income

244 246
Fee and commission income

1,006 1,009
Fee and commission expense

(523) (515)
Net fee and commission income

483 494
Other income


Net foreign exchange earnings and other financial instruments income
1


408 (26)
Adjustment to gain on sale of UDC Finance Ltd

- 2
Gain on sale of premises and equipment

- 1
Other

11 9
Other income

419 (14)
Other operating income

902 480
Operating income

5,554 4,882
1.
Includes fair value movements (excluding realised and accrued interest) on derivatives not designated as accounting hedges entered into to manage interest rate and foreign exchange risk, ineffective
portions of cash flow hedges, and fair value movements in financial assets and liabilities at FVTPL.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



11


2. Operating income (continued)


Net interest income


Interest income and expense

We recognise interest income and expense in net interest income for all financial instruments, including those classified as held for trading,
assets measured at FVOCI, and assets and liabilities designated at FVTPL. We use the effective interest rate method to calculate the amortised
cost of assets held at amortised cost and to recognise interest income on financial assets measured at amortised cost and FVOCI. The effective
interest rate is the rate that discounts the stream of estimated future cash receipts or payments over the expected life of the financial instrument
or, when appropriate, a shorter period, to the net carrying amount of the financial asset or liability. For assets subject to prepayment, we
determine their expected life on the basis of historical behaviour of the particular asset portfolio taking into account contractual obligations and
prepayment experience.
We recognise fees and costs, which form an integral part of the financial instrument (for example loan origination fees and costs), using the
effective interest rate method. These are presented as part of interest income or expense depending on whether the underlying financial
instrument is a financial asset or financial liability.
Other operating income
Fee and commission income
We recognise fee and commission revenue arising from contracts with customers (a) over time when the performance obligation is satisfied
across more than one reporting period, or (b) at a point in time when the performance obligation is satisfied immediately or is satisfied within one
reporting period.
•

lending fees exclude fees treated as part of the effective yield calculation of interest income. Lending fees include certain guarantee and
commitment fees where the loan or guarantee is not likely to be drawn upon, and other fees charged for providing customers a distinct
good or service that are recognised separately from the underlying lending product.
•

non-lending fees include fees associated with deposit and credit card accounts, interchange fees and fees charged for specific customer
transactions such as international transaction fees. Where the Banking Group provides multiple goods or services to a customer under the
same contract, the Banking Group allocates the transaction price of the contract to distinct performance obligations based on the relative
stand-alone selling price of each performance obligation. Revenue is recognised as each performance obligation is satisfied.
•

commissions represent fees from third parties where we act as an agent by arranging a third party (such as an insurance provider) to
provide goods and services to a customer. In such cases, we are not primarily responsible for providing the underlying good or service to
the customer. If the Banking Group collects funds on behalf of a third party when acting as an agent, we only recognise the net commission
retained as revenue. When the commission is variable based on factors outside our control (such as a trail commission), revenue is only
recognised if it is highly probable that a significant reversal of the variable amount will not be required in future periods.
•

funds management income represents fees earned from customers for providing financial advice and asset management services.
Revenue is recognised either at the point the financial advice is provided or over the period in which the asset management services are
delivered.
Net foreign exchange earnings and other financial instruments income
We recognise the following as net foreign exchange earnings and other financial instruments income:
•

exchange rate differences arising on the settlement of monetary items and translation differences on monetary items translated at rates
different to those at which they were initially recognised;
•

fair value movements (excluding realised and accrued interest) on derivatives not designated as accounting hedges that we use to manage
interest rate and foreign exchange risk on funding instruments;
•

the ineffective portions of fair value hedges and cash flow hedges;
•

immediately upon sale or repayment of a hedged item, the unamortised fair value adjustments to items designated as fair value hedges and
amounts accumulated in equity related to designated cash flow hedges;
•

fair value movements on financial assets and financial liabilities at FVTPL or held for trading;
•

amounts released from the FVOCI reserve when a debt instrument classified as FVOCI is sold; and
•

the gain or loss on derecognition of financial assets or liabilities measured at amortised cost.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



12


3. Operating expenses

2025 2024

NZ$m NZ$m
Personnel



Salaries and related costs 1,025 1,021
Superannuation costs 30 31
Other 49 38
Personnel

1,104 1,090
Premises



Rent 20 19
Depreciation 71 74
Other 46 40
Premises

137 133
Technology



Depreciation and amortisation 32 35
Subscription licences and outsourced services 214 193
Other 29 29
Technology

275 257
Other



Advertising and public relations 43 39
Professional fees 68 76
Freight, stationery, postage and communication 50 43
Charges from ANZ Group 82 68
Other 53 54
Other

296 280
Operating expenses

1,812 1,760

Operating expenses
Operating expenses are recognised as services are provided to the Banking Group, over the period in which an asset is consumed, or once a
liability is created.
Salaries and related costs - annual leave, long service leave and other employee benefits
Wages and salaries, annual leave and other employee entitlements expected to be paid or settled within twelve months of employees
rendering service are measured at their nominal amounts using remuneration rates that the Banking Group expects to pay when the liabilities
are settled.
We accrue employee entitlements relating to long service leave using an actuarial calculation. It includes assumptions regarding staff
departures, leave utilisation and future salary increases. The result is then discounted using market yields at the reporting date. The market
yields are determined from a blended rate of government bonds with terms to maturity that closely match the estimated future cash outflows.
If we expect to pay short term cash bonuses, then a liability is recognised when the Banking Group has a present legal or constructive
obligation to pay this amount (as a result of past service provided by the employee) and the obligation can be reliably measured.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



13
4. Income tax
Income tax expense
Reconciliation of the prima facie income tax expense on pre-tax profit with the income tax expense recognised in profit or loss:

2025 2024

NZ$m NZ$m
Profit before income tax

3,767 3,078
Prima facie income tax expense at 28% 1,055 862
Tax effect of permanent differences:
Tax provisions no longer required (1) -
Non-assessable income and non-deductible expenditure - 8
Income tax over provided in previous years (1) -
Income tax expense

1,053 870
Current tax expense

1,054 933
Adjustments recognised in the current year in relation to the current tax of prior years

(13) (1)
Deferred tax expense/(income) relating to the origination and reversal of temporary differences

12 (62)
Income tax expense 1,053 870
Effective tax rate 28.0% 28.3%
Deferred tax assets and liabilities

2025 2024

NZ$m NZ$m
Deferred tax assets balances comprise temporary differences attributable to:


Amounts recognised in the Income Statement:


Collectively assessed allowances for expected credit losses

206 222
Individually assessed allowances for expected credit losses

19 19
Provision for employee entitlements

56 55
Other provisions

21 21
Software

132 130
Lease liabilities

62 67
Other

11 12
Total

507 526
Total deferred tax assets (before set-off)

507 526
Set-off of deferred tax balances pursuant to set-off provisions

(115) (108)
Net deferred tax assets

392 418





2025 2024


NZ$m NZ$m
Deferred tax liabilities balances comprise temporary differences attributable to:


Amounts recognised in the Income Statement:


Fixed assets

- 6
Right of use assets

48 54
Other

12 28
Total

60 88
Amounts recognised directly in Other comprehensive income:


Cash flow hedge reserve

55 20
Total

55 20
Total deferred tax liabilities (before set-off)

115 108
Set-off of deferred tax balances pursuant to set-off provisions

(115) (108)
Net deferred tax liabilities

- -

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



14



4. Income tax (continued)


Income tax expense
Income tax expense comprises both current and deferred taxes and is based on the accounting profit adjusted for differences in the
accounting and tax treatments of income and expenses (that is, taxable income). We recognise tax expense in profit or loss except when the
tax relates to items recognised directly in equity and other comprehensive income, in which case we recognise the tax directly in equity or
other comprehensive income respectively.
Current tax expense
Current tax expense is the tax we expect to pay on taxable income for the year, based on tax rates (and tax laws) which are enacted at the
reporting date. We recognise current tax as a liability (or asset) to the extent that it is unpaid (or refundable).
Deferred tax assets and liabilities
We account for deferred tax using the balance sheet method. Deferred tax arises because the accounting income is not always the same as
the taxable income. This creates temporary differences, which usually reverse over time. Until they reverse, we recognise a deferred tax asset,
or liability, on the balance sheet. We measure deferred taxes at the tax rates that we expect will apply to the period(s) when the asset is
realised, or the liability settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
We offset current and deferred tax assets and liabilities only to the extent that:
• they relate to income taxes imposed by the same taxation authority;
• there is a legal right and intention to settle on a net basis; and
• it is allowed under the tax law of the relevant jurisdiction.



Judgement is required in determining provisions held in respect of uncertain tax positions. The Banking Group estimates its tax liabilities based
on its understanding of the relevant law and seeks independent advice where appropriate.



5. Dividends
Ordinary share dividends
Dividends determined by the Bank’s Board are recognised with a corresponding reduction of retained earnings on the dividend payment date.

Amount
Total
dividend

Dividends

per share NZ$m
Financial Year 2024



Dividend paid in March 2024

17.7 cents 1,125
Dividend paid in June 2024

12.4 cents 900
Dividend paid in August 2024

32.6 cents 3,500
Dividend paid in September 2024

14.9 cents 1,600
Dividends paid during the year ended 30 September 2024

7,125
Financial Year 2025



Dividend paid in March 2025

6.5 cents 700
Dividend paid in September 2025

8.8 cents 950
Dividends paid during the year ended 30 September 2025

1,650
Imputation credit account

Banking Group Bank
1

2025 2024 2025 2024
NZ$m NZ$m NZ$m NZ$m
Imputation credits available as at 30 September 9,756 8,951 1,168 830
1.
Imputation credits available to the Bank are shown separately as this is relevant for holders of perpetual preference shares (refer to Note 20 Shareholders’ equity) issued by the Bank.
The imputation credit balance for the Banking Group includes the imputation credit balance in relation to the New Zealand resident imputation group, the
Bank consolidated imputation group and other companies in the Banking Group that are not in either of these imputation groups. The imputation credit
balance available to the Banking Group includes imputation credits that will arise from the payment of the amount of provision for income tax as at the
reporting date.
The imputation credit balance for the Bank reflects the imputation credit balance of the Bank consolidated imputation group. The imputation credit
balance available to the Bank includes imputation credits that will arise from the payment of the amount of provision for income tax as at the reporting
date.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



15
6. Segment reporting
Description of segments
The Banking Group is organised into three major business segments for segment reporting purposes - Personal, Business & Agri and Institutional.
Centralised back office and corporate functions support these segments. These segments are consistent with internal reporting provided to the chief
operating decision maker, being the Bank’s Chief Executive Officer (CEO).
Personal
Personal provides a full range of banking and wealth management services to consumer and private banking customers. We deliver our services via our
internet and app-based digital solutions and a network of branches, mortgage specialists, private bankers and contact centres.
Business & Agri
Business & Agri provides a full range of banking services through our digital, branch and contact centre channels, and traditional relationship banking and
sophisticated financial solutions through dedicated managers. These cover privately owned small and medium enterprises, and the agricultural business
segment.
Institutional
The Institutional division services government and government-related entities, global institutional and corporate customers via the following business
units:
• Transaction Banking provides customers with working capital and liquidity solutions including documentary trade, supply chain financing, commodity
financing as well as cash management solutions, deposits, payments and clearing.
• Corporate Finance provides customers with loan products, loan syndication, specialised loan structuring and execution, project and export finance,
debt structuring and acquisition finance, and sustainable finance solutions.
• Markets provides customers with risk management services in foreign exchange, interest rates, credit, commodities, and debt capital markets in
addition to managing the Banking Group’s interest rate exposure and high quality liquid asset portfolio.
Other
Other includes treasury and back office support functions, none of which constitutes a separately reportable segment.
Operating segments
Personal Business & Agri Institutional Other Total

2025 2024 2025 2024 2025 2024 2025 2024 2025 2024
Year ended 30 September NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m
Net interest income 2,585 2,380 959 1,013 763 753 345 256 4,652 4,402
Net fee and commission income
- Lending fees 9 8 - - 12 11 - - 21 19
- Non-lending fees 454 449 212 217 49 51 (2) (2) 713 715
- Commissions 27 28 - - 1 1 - - 28 29
- Funds management income 244 246 - - - - - - 244 246
- Fee and commission expense (355) (345) (168) (170) - - - - (523) (515)
Net fee and commission income 379 386 44 47 62 63 (2) (2) 483 494
Other income 3 - (1) - 204 242 213 (256) 419 (14)
Other operating income 382 386 43 47 266 305 211 (258) 902 480
Operating income 2,967 2,766 1,002 1,060 1,029 1,058 556 (2) 5,554 4,882
Operating expenses (1,235) (1,213) (299) (276) (255) (248) (23) (23) (1,812) (1,760)
Profit/(loss) before credit impairment
and income tax
1,732 1,553 703 784 774 810 533 (25) 3,742 3,122
Credit impairment release/(charge) (10) 17 30 (47) 5 (14) - - 25 (44)
Profit/(loss) before income tax 1,722 1,570 733 737 779 796 533 (25) 3,767 3,078
Income tax expense (482) (442) (205) (207) (218) (223) (148) 2 (1,053) (870)
Profit/(loss) after income tax 1,240 1,128 528 530 561 573 385 (23) 2,714 2,208
Financial position









Goodwill 1,042 1,042 695 695 1,269 1,269 - - 3,006 3,006
Net loans and advances 115,317 110,149 24,324 23,952 19,042 17,565 - - 158,683 151,666
Customer deposits 96,544 91,814 19,068 17,996 27,930 26,353 - - 143,542 136,163

Other segment
The Other segment profit/(loss) after income tax comprises:


2025 2024
For the year ended 30 September

NZ$m NZ$m
Personal and Business & Agri central functions

(2) 6
Group Centre

233 156
Economic hedges

154 (185)
Total

385 (23)

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



16

Financial assets
Outlined below is a description of how we classify and measure financial assets as they apply to the note disclosures that follow.
Financial assets - general

There are three measurement classifications for financial assets under NZ IFRS 9 Financial Instruments (NZ IFRS 9): amortised cost, FVTPL and
FVOCI. Financial assets are classified into these measurement classifications on the basis of two criteria:
•

the business model within which the financial asset is managed; and
•

the contractual cash flow characteristics of the financial asset (specifically whether the contractual cash flows represent solely payments of
principal and interest).
The resultant financial asset classifications are as follows:
•

Amortised cost: Financial assets with contractual cash flows that comprise solely payments of principal and interest and which are held in a
business model whose objective is to collect their cash flows;
•

FVOCI: Financial assets with contractual cash flows that comprise solely payments of principal and interest and which are held in a business
model whose objective is to collect their cash flows or to sell the assets; and
•

FVTPL: Any other financial assets not falling into the categories above are measured at FVTPL.
Fair value option for financial assets
A financial asset may be irrevocably designated on initial recognition:
•

at FVTPL when the designation eliminates or significantly reduces an accounting mismatch that would otherwise arise; or
•

at FVOCI for investments in equity securities, where that instrument is neither held for trading nor contingent consideration recognised by
an acquirer in a business combination.


7. Cash and cash equivalents
Cash and cash equivalents comprise coins, notes, money at call, reverse repurchase agreements of less than 90 days, balances held with central banks
and other banks, and other cash equivalents that are readily convertible to known amounts of cash with insignificant risk of changes in value.

2025 2024

NZ$m NZ$m
Coins, notes and cash at bank 130 149
Reverse repurchase agreements 2,026 1,762
Balances with central banks 6,949 9,451
Balances with other banks and other cash equivalents 281 272
Cash and cash equivalents 9,386 11,634

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



17


8. Trading securities

2025 2024

NZ$m NZ$m
Government securities 5,520 4,869
Corporate and financial institution securities 828 707
Trading securities

6,348 5,576

Trading securities are financial instruments we either:

•

Acquire principally for the purpose of selling in the short-term; or
•

Hold as part of a portfolio we manage for short-term profit making.
We recognise purchases and sales of trading securities on trade date:
•

Initially, we measure them at fair value; and
•

Subsequently, we measure them in the Balance Sheet at their fair value with any change in fair value recognised in profit or loss.
Assets disclosed as Trading securities are subject to the general classification and measurement policy for Financial Assets outlined on page
16.


Judgement is required when applying the valuation techniques used to determine the fair value of trading securities not valued using quoted
market prices. Refer to Note 16 Fair value of financial assets and financial liabilities for further details.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



18
9. Derivative financial instruments

Assets Liabilities Assets Liabilities

2025 2025 2024 2024
Fair value NZ$m NZ$m NZ$m NZ$m
Derivative financial instruments - held for trading
1
11,435 (10,390) 10,151 (11,172)
Derivative financial instruments - designated in hedging relationships
1
14 (18) 30 (7)
Derivative financial instruments 11,449 (10,408) 10,181 (11,179)
1.
Comparative amounts have been adjusted to be consistent with the current period’s presentation.
Features
Derivative financial instruments are contracts:
• whose value is derived from an underlying price index (or other variable) defined in the contract – sometimes the value is derived from more than one
variable;
• that require little or no initial net investment; and
• that are settled at a future date.
Movements in the price of the underlying variables, which cause the value of the contract to fluctuate, are reflected in the fair value of the derivative.
Purpose
The Banking Group’s derivative financial instruments have been categorised as follows:
Trading Derivatives held in order to:
• meet customer needs for managing their own risks.
• manage risks in the Banking Group that are not in a designated hedge accounting relationship (some elements of
balance sheet management).
• undertake market making and positioning activities to generate profits from short-term fluctuations in prices or
margins.
Designated in hedging
relationships
Derivatives designated into hedge accounting relationships in order to minimise profit or loss volatility by matching
movements in underlying positions relating to:
• hedges of the Banking Group’s exposures to interest rate risk and currency risk.
• hedges of other exposures relating to non-trading positions.
Types
The Banking Group offers or uses four different types of derivative financial instruments:
Forwards A contract documenting the rate of interest, or the currency exchange rate, to be paid or received on a notional
principal amount at a future date.
Futures An exchange traded contract in which the parties agree to buy or sell an asset in the future for a price agreed on the
transaction date, with a net settlement in cash paid on the future date without physical delivery of the asset.
Swaps A contract in which two parties exchange one series of cash flows for another.
Options A contract in which the buyer of the contract has the right - but not the obligation - to buy (known as a ‘call option’) or
to sell (known as a ‘put option’) an asset or instrument at a set price on a future date. The seller has the corresponding
obligation to fulfil the transaction to sell or buy the asset or instrument if the buyer exercises the option.
Risks managed
The Banking Group offers and uses the instruments described above to manage fluctuations in the following:
Foreign exchange
Currencies at current or determined rates of exchange.
Interest rate Fixed or variable interest rates applying to money lent, deposited or borrowed.
Commodity Soft commodities (that is, agricultural products such as wheat, coffee, cocoa, and sugar) and hard commodities (that is,
mined products such as gold, oil and gas).
Credit Risk of default by customers or third parties.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



19
9. Derivative financial instruments (continued)
The Banking Group uses central clearing counterparties and exchanges to settle derivative transactions. Different arrangements for posting of collateral
exist with these exchanges:
• some transactions are subject to clearing arrangements which result in separate recognition of collateral assets and liabilities, with the carrying values
of the associated derivative assets and liabilities held at their fair value.
• other transactions are legally settled by the payment or receipt of collateral which reduces the carrying values of the related derivative instruments by
the amount paid or received.
Derivative financial instruments – held for trading
The majority of the Banking Group’s derivative financial instruments are held for trading. The fair value of derivative financial instruments held for trading
are:

Assets Liabilities Assets Liabilities

2025 2025 2024 2024
Fair value NZ$m NZ$m NZ$m NZ$m
Interest rate contracts
Forward rate agreements 5 (4) - -
Futures contracts
2 (43) 3 (70)
Swap agreements
1
5,163 (5,032) 3,915 (3,940)
Options 2 (1) 1 (1)
Total 5,172 (5,080) 3,919 (4,011)
Foreign exchange contracts
Spot and forward contracts 1,770 (1,471) 2,356 (2,954)
Swap agreements 4,431 (3,776) 3,797 (4,127)
Options 15 (14) 33 (33)
Total 6,216 (5,261) 6,186 (7,114)
Commodity contracts and credit default swaps 47 (49) 46 (47)
Derivative financial instruments - held for trading
2
11,435 (10,390) 10,151 (11,172)
1.
Comparative amounts have been adjusted to be consistent with the current period’s presentation.
2.
Includes derivatives held for balance sheet management which are not designated into accounting hedge relationships.

Derivative financial instruments – designated in hedging relationships
Under the accounting policy choice provided by NZ IFRS 9, the Banking Group has continued to apply the hedge accounting requirements of NZ IAS 39
Financial Instruments: Recognition and Measurement (NZ IAS 39).
The Banking Group uses two types of hedge accounting relationships:
Fair value hedge Cash flow hedge
Objective of this hedging
arrangement
To hedge our exposure to changes to the fair value of a
recognised asset or liability or unrecognised firm
commitment caused by interest rate or foreign currency
movements.
To hedge our exposure to variability in cash flows of a
recognised asset or liability, a firm commitment or a highly
probable forecast transaction caused by interest rate,
foreign currency and other price movements.
Recognition of effective
hedge portion
The following are recognised in profit or loss at the same
time:
• all changes in the fair value of the underlying item
relating to the hedged risk; and
• the change in the fair value of the derivatives.
We recognise the effective portion of changes in the fair
value of derivatives designated as a cash flow hedge in
the cash flow hedge reserve.
Recognition of ineffective
hedge portion
Recognised immediately in Other operating income.
If a hedging instrument
expires, or is sold,
terminated, or exercised;
or no longer qualifies for
hedge accounting
When we recognise the hedged item in profit or loss, we
recognise the related unamortised fair value adjustment in
profit or loss. This may occur over time if the hedged item
is amortised to profit or loss as part of the effective yield
over the period to maturity.
Only when we recognise the hedged item in profit or loss
is the amount previously deferred in the cash flow hedge
reserve transferred to profit or loss.
Hedged item sold or repaid We recognise the unamortised fair value adjustment
immediately in profit or loss.
Amounts accumulated in equity are transferred
immediately to profit or loss.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



20
9. Derivative financial instruments (continued)
The fair value of derivative financial instruments designated in hedging relationships are:

2025 2024

Nominal Nominal

amount Assets Liabilities amount Assets Liabilities

NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m
Fair value hedges
Interest rate swap agreements
1
30,979 2 (11) 28,106 18 (2)
Cash flow hedges
Interest rate swap agreements
1
27,754 12 (7) 30,383 12 (5)
Derivative financial instruments - designated in
hedging relationships
58,733 14 (18) 58,489 30 (7)
1.
Comparative amounts have been adjusted to be consistent with the current period’s presentation.

The maturity profile of the nominal amounts of our hedging instruments held is:

Less than 3 3 to 12 1 to 5 After 5

Average months months years years Total
Nominal amount

rate NZ$m NZ$m NZ$m NZ$m NZ$m
As at 30 September 2025


Fair value hedges


Interest rate

2.28% - 2,001 19,500 9,478 30,979
Cash flow hedges


Interest rate

3.97% 6,128 8,044 12,849 733 27,754

As at 30 September 2024


Fair value hedges


Interest rate

2.03% 373 1,880 16,843 9,010 28,106
Cash flow hedges


Interest rate

4.62% 6,025 6,495 15,727 2,136 30,383

The impacts of ineffectiveness from our designated hedge relationships by type of hedge relationship and type of risk being hedged are:


Ineffectiveness
Amount reclassified from
the cash flow hedge
reserve to profit or loss
4



Change in value of
hedging instrument
2

Change in value of
hedged item
Hedge ineffectiveness
recognised in profit or loss
3


2025 2024 2025 2024 2025 2024 2025 2024


NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m
Fair value hedges
1



Interest rate

(1,291) (65) 1,293 68 2 3 - -
Cash flow hedges
1


.
Interest rate

126 149 (126) (150) - - (3) (1)
1.
All hedging instruments are classified as derivative financial instruments.
2.
Changes in value of hedging instruments is before any adjustments for Settle to Market clearing arrangements.
3.
Recognised in Other operating income.
4.
Recognised in Net interest income and Other operating income.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



21
9. Derivative financial instruments (continued)
The hedged items in relation to the Banking Group’s fair value hedges are:


Accumulated fair value

hedge adjustments on

Carrying amount

the hedged item

Balance Sheet Assets Liabilities Assets Liabilities

presentation Hedged risk NZ$m NZ$m NZ$m NZ$m
As at 30 September 2025


Fixed rate debt issuance Debt issuances Interest rate - (15,456) - 321
Fixed rate investment securities at FVOCI
1
Investment securities Interest rate 15,576 - 420 -
Total

15,576 (15,456) 420 321


As at 30 September 2024


Fixed rate debt issuance Debt issuances Interest rate - (15,313) - 412
Fixed rate investment securities at FVOCI
1
Investment securities Interest rate 12,443 - 39 -
Total


12,443 (15,313) 39 412
1.
The carrying amount of debt instruments at FVOCI does not include the fair value hedge adjustment. The fair value hedge adjustment is included in other comprehensive income.

The hedged items in relation to the Banking Group’s cash flow hedges are:

Continuing Discontinued


hedges hedges


2025 2024 2025 2024

Hedged risk NZ$m NZ$m NZ$m NZ$m
Floating rate loans and advances

Interest rate 269 186 17 -
Floating rate customer deposits

Interest rate (91) (114) - -

All cash flow hedges relate to hedges of interest rate risk and the movements in the cash flow hedge reserve are shown in the Statement of Changes in
Equity on page 7.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



22


9. Derivative financial instruments (continued)


Recognition

Initially and at each reporting date, we recognise all derivatives at fair value. If the fair value of a derivative is
positive, then we carry it as an asset, but if its value is negative, then we carry it as a liability.
Valuation adjustments are integral in determining the fair value of derivatives. This includes:
•

a credit valuation adjustment to reflect the counterparty risk and/or event of default; and
•

a funding valuation adjustment to account for funding costs and benefits in the derivatives portfolio.
Derecognition of
assets and liabilities

We remove derivative assets from our Balance Sheet when the contracts expire or we have transferred
substantially all the risks and rewards of ownership. We remove derivative liabilities from our Balance Sheet
when the Banking Group’s contractual obligations are discharged, cancelled or expired.
With respect to derivatives cleared through a central clearing counterparty or exchange, derivative assets or
liabilities may be derecognised in accordance with the principle above when collateral is settled, depending
on the legal arrangements in place for each instrument.
Impact on the
Income Statement
The recognition of gains or losses on derivative financial instruments depends on whether the derivative is
held for trading or is designated in a hedge accounting relationship. For derivative financial instruments held
for trading, gains or losses from changes in the fair value are recognised in profit or loss.
For an instrument designated in a hedge accounting relationship, the recognition of gains or losses depends
on the nature of the item being hedged. Refer to the table on page 19 for details of the recognition
approach applied for each type of hedge accounting relationship.
Sources of hedge accounting ineffectiveness may arise from differences in the interest rate reference rate,
margins, or rate set differences and differences in discounting between the hedged items and the hedging
instruments.
Hedge effectiveness





To qualify for hedge accounting under NZ IAS 39, a hedge relationship is expected to be highly effective. A
hedge relationship is highly effective only if the following conditions are met:
•

the hedge is expected to be highly effective in achieving offsetting changes in fair value or cash flows
attributable to the hedged risk during the period for which the hedge is designated (prospective
effectiveness); and
•

the actual results of the hedge are within the range of 80-125% (retrospective effectiveness).
The Banking Group monitors hedge effectiveness on a regular basis but at a minimum at each reporting
date.




Judgement is required when we select the valuation techniques used to determine the fair value of derivatives, particularly the selection of
valuation inputs that are not readily observable, and the application of valuation adjustments to certain derivatives. Refer to Note 16 Fair value
of financial assets and financial liabilities for further details.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



23


10. Investment securities


2025 2024


NZ$m NZ$m
Investment securities measured at FVOCI

Debt securities 16,452 13,290
Equity securities 6 5
Total

16,458 13,295




The maturity profile of investment securities is as follows:


Less than 3 3 to 12 After No

months months 1 to 5 years 5 years maturity Total
As at 30 September 2025 NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m
Government securities 176 271 11,168 4,460 - 16,075
Corporate and financial institution securities 1 - 363 13 - 377
Equity securities - - - - 6 6
Total

177 271 11,531 4,473 6 16,458

As at 30 September 2024

Government securities 126 829 7,326 4,543 - 12,824
Corporate and financial institution securities 1 50 415 - - 466
Equity securities - - - - 5 5
Total

127 879 7,741 4,543 5 13,295

Investment securities are those financial assets in security form (that is, transferable debt or equity instruments) that are not held for trading
purposes. By way of exception, bills of exchange (a form of security/transferable instrument) which are used to facilitate the Banking Group’s
customer lending activities are classified as Loans and advances (rather than Investment securities) to better reflect the substance of the
arrangement.
Equity investments not held for trading purposes may be designated at FVOCI on an instrument-by-instrument basis. If this election is made,
gains or losses are not reclassified from Other comprehensive income to profit or loss on disposal of the investment. However, gains or losses
may be reclassified within equity.
Assets disclosed as Investment securities are subject to the general classification and measurement policy for financial assets outlined on
page 16. Additionally, expected credit losses associated with Investment securities - debt securities at FVOCI are recognised and measured in
accordance with the accounting policy outlined in Note 12 Allowance for expected credit losses, and the allowance for expected c redit l oss is
recognised in the FVOCI reserve in equity with a corresponding charge to profit or loss.


Judgement is required when we select valuation techniques used to determine the fair value of assets not valued using quoted market prices,
particularly the selection of valuation inputs that are not readily observable. Refer to Note 16 Fair value of financial assets and financial liabilities
for further details.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



24


11. Net loans and advances
The following table provides details of Net loans and advances for the Banking Group:
2025 2024

NZ$m NZ$m
Overdrafts 1,149 1,091
Credit cards 1,230 1,243
Term loans - housing 115,835 110,807
Term loans - non-housing
1
40,524 38,755
Gross subtotal 158,738 151,896
Unearned income
2
(26) (21)
Capitalised brokerage and other origination costs
2
639 516
Gross loans and advances 159,351 152,391
Allowance for expected credit losses (refer to Note 12) (668) (725)
Net loans and advances 158,683 151,666
Residual contractual maturity:
Within one year 19,371 25,259
More than one year 139,312 126,407
Net loans and advances 158,683 151,666
Carried on Balance Sheet at:
Amortised cost 157,722 151,666
Fair value through profit or loss 961 -
Net loans and advances 158,683 151,666
1.
Includes reverse repurchase agreements (with 90 days or more to maturity) designated at FVTPL of NZ$961 million (2024: nil).
2.
Amortised over the expected life of the loan.
The Bank has sold residential mortgages to the NZ Branch with a net carrying value of NZ$281 million as at 30 September 2025 (2024: NZ$298 million).
These assets qualify for derecognition as the Bank does not retain a continuing involvement in the transferred assets.


Loans and advances are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are
facilities the Banking Group provides directly to customers or through third party channels.
Loans and advances are initially recognised at fair value plus transaction costs directly attributable to the issue of the loan or advance, which
are primarily brokerage and other origination costs which we amortise over the estimated life of the loan. Subsequently, we then measure
loans and advances at amortised cost using the effective interest rate method, net of any allowance for expected credit losses, or at fair value
when they are specifically designated on initial recognition as FVTPL, are classified as held for sale or when held for trading. Refer to Note 16
Fair value of financial assets and financial liabilities for further details.
The Banking Group enters into transactions in which it transfers financial assets that are recognised on its Balance Sheet. When the Banking
Group retains substantially all of the risks and rewards of the transferred assets, the transferred assets remain on the Banking Group’s Balance
Sheet, however if substantially all the risks and rewards are transferred, the Banking Group derecognises the asset. If the risks and rewards are
partially retained and control over the asset is lost, the Banking Group derecognises the asset. If control over the asset is not lost, the Banking
Group continues to recognise the asset to the extent of its continuing involvement.
We separately recognise the rights and obligations retained, or created, in the transfer of assets as appropriate.
Assets disclosed as Net loans and advances are subject to the general classification and measurement policy for financial assets outlined on
page 16. Additionally, expected credit losses associated with loans and advances at amortised cost are recognised and measured in
accordance with the accounting policy outlined in Note 12 Allowance for expected credit losses.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



25
12. Allowance for expected credit losses

2025 2024
Collectively Individually Collectively Individually

assessed assessed Total assessed assessed Total

NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m
Net loans and advances at amortised cost 604 64 668 661 64 725
Off-balance sheet commitments 130 4 134 133 3 136
Total 734 68 802 794 67 861
The following tables present the movement in the allowance for expected credit losses (ECL) for the year.

Net loans and advances - at amortised cost
Allowance for ECL is included in Net loans and advances.

Stage 3

Stage 1 Stage 2
Collectively
assessed
Individually
assessed Total

NZ$m NZ$m NZ$m NZ$m NZ$m
As at 1 October 2023 193 398 79 60 730
Transfer between stages 36 (40) (1) 5 -
New and increased provisions (net of releases) (42) 12 26 99 95
Write-backs - - - (49) (49)
Bad debts written-off (excluding recoveries) - - - (41) (41)
Discount unwind - - - (10) (10)
As at 30 September 2024 187 370 104 64 725
Transfer between stages 58 (58) (2) 2 -
New and increased provisions (net of releases) (57) 8 (6) 94 39
Write-backs - - - (53) (53)
Bad debts written-off (excluding recoveries) - - - (47) (47)
Discount unwind - - - 4 4
As at 30 September 2025 188 320 96 64 668
Off-balance sheet commitments - undrawn and contingent facilities
Allowance for ECL is included in Other provisions.

As at 1 October 2023 80 39 3 5 127
Transfer between stages 4 (4) - - -
New and increased provisions (net of releases) (10) 21 - (2) 9
As at 30 September 2024 74 56 3 3 136
Transfer between stages 5 (5) - - -
New and increased provisions (net of releases) (9) 6 - 1 (2)
As at 30 September 2025 70 57 3 4 134

The collectively assessed allowance for ECL decreased by NZ$60 million attributable to: releases of NZ$53 million primarily driven by improvements in the
forward-looking economic scenarios and portfolio credit risk profile, releases of NZ$21 million in management temporary adjustments, partially offset by
NZ$14 million increase due to enhancements in model methodology.
Credit impairment charge – Income S tatement
Credit impairment charge/(release) analysis

2025 2024

NZ$m NZ$m
New and increased provisions (net of releases)
1



- Collectively assessed (60) 2
- Individually assessed 97 102
Write-backs (53) (49)
Recoveries of amounts previously written-off (9) (11)
Total credit impairment charge/(release)

(25) 44
1.
Includes the impact of transfers between collectively assessed and individually assessed.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



26


12. Allowance for expected credit losses

(continued)

Expected credit loss model
The measurement of expected credit losses reflects an unbiased, probability weighted prediction which evaluates a range of scenarios and
takes into account the time value of money, past events, current conditions and forecasts of future economic conditions.
Expected credit losses are either measured over 12 months or the expected lifetime of the financial asset, depending on credit deterioration
since origination, according to the following three-stage approach:
•

Stage 1: At the origination of a financial asset, and where there has not been a Significant Increase in Credit Risk (SICR) since origination, an
allowance for ECL is recognised reflecting the expected credit losses resulting from default events that are possible within the next 12
months from the reporting date. For instruments with a remaining maturity of less than 12 months, expected credit losses are estimated
based on default events that are possible over the remaining time to maturity.
•

Stage 2: Where there has been a SICR since origination, an allowance for ECL is recognised reflecting expected credit losses resulting from
all possible default events over the expected life of a financial instrument. If credit risk were to improve in a subsequent period such that the
increase in credit risk since origination is no longer considered significant, the exposure returns to a Stage 1 classification with ECL
measured accordingly.
•

Stage 3: Where there is objective evidence of impairment, an allowance equivalent to lifetime ECL is recognised.
Expected credit losses are estimated on a collective basis for exposures in Stage 1 and Stage 2, and on either a collective or individual basis
when transferred to Stage 3.
Measurement of expected credit loss
ECL is calculated as the product of the following credit risk factors at a facility level, discounted to incorporate the time value of money:
•

Probability of default (PD) - the estimate of the likelihood that a borrower will default over a given period;
•

Exposure at default (EAD) - the expected balance sheet exposure at default taking into account repayments of principal and interest,
expected additional drawdowns and accrued interest; and
•

Loss given default (LGD) - the expected loss in the event of the borrower defaulting, expressed as a percentage of the facility's EAD, taking
into account direct and indirect recovery costs.
These credit risk factors are adjusted for current and forward-looking information through the use of macroeconomic variables.
Expected life
When estimating ECL for exposures in Stage 2 and 3, the Banking Group considers the expected lifetime over which it is exposed to credit
risk.
For non-retail portfolios, the Banking Group uses the maximum contractual period as the expected lifetime for non-revolving credit facilities. For
non-retail revolving credit facilities, such as corporate lines of credit, the expected life reflects the Banking Group’s contractual right to
withdraw a facility as part of a contractually agreed annual review, after taking into account the applicable notice period.
For retail portfolios, the expected lifetime is determined using a behavioural term, taking into account expected prepayment behaviour and
events that give rise to substantial modifications.
Definition of default, credit impaired and write-offs
The definition of default used in measuring ECL is aligned to the definition used for internal credit risk management purposes across all
portfolios. This definition is also in line with the regulatory definition of default. Default occurs when there are indicators that a debtor is unlikely
to fully satisfy contractual credit obligations to the Banking Group, or the exposure is 90 days past due.
Financial assets, including those that are well secured, are considered credit impaired for financial reporting purposes when they default.
When there is no realistic probability of recovery, loans are written off against the related impairment allowance on completion of the Banking
Group’s internal processes and when all reasonably expected recoveries have been collected. In subsequent periods, any recoveries of
amounts previously written-off are recorded as a release to the credit impairment charge in the Income Statement.
Modified financial assets
If the contractual terms of a financial asset are modified or an existing financial asset is replaced with a new one for either credit or commercial
reasons, an assessment is made to determine if the changes to the terms of the existing financial asset are considered substantial. This
assessment considers both changes in cash flows arising from the modified terms as well as changes in the overall instrument risk profile; for
example, changes in the principal (credit limit), term, or type of underlying collateral. Where a modification is considered non-substantial, the
existing financial asset is not derecognised and its date of origination continues to be used to determine SICR. Where a modification is
considered substantial, the existing financial asset is derecognised and a new financial asset is recognised at its fair value on the modification
date, which also becomes the date of origination used to determine SICR for this new asset.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



27


12. Allowance for expected credit losses

(continued)

Significant increase in credit risk
Stage 2 assets are those that have experienced a SICR since origination. In determining what constitutes a SICR, the Banking Group considers
both qualitative and quantitative information:
i. Internal credit rating grade
For the majority of portfolios, the primary indicator of a SICR is a significant deterioration in the internal credit rating grade of a facility since
origination and is measured by the application of thresholds.
For non-retail portfolios, a SICR is determined by comparing the Customer Credit Rating (CCR) applicable to a facility at reporting date to
the CCR at origination of that facility. A CCR is assigned to each borrower which reflects the PD of the borrower and incorporates both
borrower and non-borrower specific information, including forward-looking information. CCRs are subject to review at least annually or
more frequently when an event occurs which could affect the credit risk of the customer.
For retail portfolios, a SICR is determined, depending on the type of facility, by either comparing the scenario weighted lifetime PD at the
reporting date to that at origination, or by reference to customer behavioural score thresholds. The scenario weighted lifetime probability of
default may increase significantly if:
•

there has been a deterioration in the economic outlook, or an increase in economic uncertainty; or
•

there has been a deterioration in the customer’s overall credit position, or ability to manage their credit obligations.
ii. Backstop criteria
The Banking Group uses 30 days past due arrears as a backstop criterion for both non-retail and retail portfolios. For retail portfolios only,
facilities are required to demonstrate three to six months of good payment behaviour prior to being allocated back to Stage 1.
Forward-looking information
Forward-looking information is incorporated into both our assessment of whether a financial asset has experienced a SICR since origination
and in our estimate of ECL. In applying forward-looking information for estimating ECL, the Banking Group considers four probability-weighted
forecast economic scenarios as follows:
i. Base case scenario
The base case scenario is the Banking Group’s view of future macroeconomic conditions. It reflects the same basis of assumptions used
by management for strategic planning and budgeting, and also informs the Banking Group’s Internal Capital Adequacy Assessment
Process which is the process the Banking Group applies in strategic and capital planning over a 3-year time horizon;
ii. Upside scenario
The upside scenario is fixed by reference to average economic cycle conditions (not economic conditions prevailing at balance date) and
is based on a combination of more optimistic economic events and uncertainty over long term horizons; and
iii. Downside and iv. Severe downside scenarios
The downside and severe scenarios assume an economic downturn, both domestically and globally. Forecast macroeconomic variables
for such scenarios are developed internally, reflecting plausible scenarios unfolding over a 5-year period given current economic
conditions. These assumptions have been revised in 2025, reflecting a sharp rise in inflation, declining asset prices, and increases to
unemployment. The impacts to underlying macroeconomic variables are deeper in the case of the severe scenario.
The four scenarios are described in terms of macroeconomic variables used in the PD, LGD and EAD models (collectively the ECL models)
depending on the lending portfolio and country of the borrower. Examples of the macroeconomic variables include unemployment rates,
Gross Domestic Product (GDP) growth rates, residential property price indices, commercial property price indices and consumer price indices.
Probability weighting of each scenario is determined by management considering the risks and uncertainties surrounding the base case
economic scenario, as well as specific portfolio considerations where required.
Where applicable, temporary adjustments may be made to account for situations where known or expected risks have not been adequately
addressed in the modelling process.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



28


12. Allowance for expected credit losses

(continued)

Collectively assessed allowance for expected credit losses
In estimating collectively assessed ECL, the Banking Group makes judgements and assumptions in relation to:
•

the selection of an estimation technique or modelling methodology; and
•

the selection of inputs for those models, and the interdependencies between those inputs.
The following table summarises the key judgements and assumptions in relation to the model inputs and the interdependencies between
those inputs, and highlights significant changes during the current period.
The judgements and associated assumptions have been made within the context of the uncertainty as to how various factors might impact
the global economy and reflect historical experience and other factors that are considered to be relevant, including expectations of future
events that are believed to be reasonable under the circumstances. The Banking Group’s ECL estimates are inherently uncertain and, as a
result, actual results may differ from these estimates.
Judgement/Assumption Description Considerations for the year ended 30 September 2025
Determining when a SICR
has occurred or reversed

In the measurement of ECL, judgement is involved
in determining whether there has been a SICR
since initial recognition of a loan, which would
result in it moving from Stage 1 to Stage 2. This is
a key area of judgement since transition from
Stage 1 to Stage 2 increases the ECL from an
allowance based on the PD in the next 12
months, to an allowance for lifetime ECL.
Subsequent decreases in credit risk resulting in
transition from Stage 2 to Stage 1 may similarly
result in significant changes in the ECL allowance.
The setting of precise SICR trigger points requires
judgement which may have a material impact
upon the size of the ECL allowance. The Banking
Group monitors the effectiveness of SICR criteria
on an ongoing basis.
The determination of SICR was consistent with prior
period.

Measuring both 12-
month and lifetime
expected credit losses
The PD, LGD and EAD factors used in determining
ECL are point-in-time measures reflecting the
relevant forward-looking information determined
by management. Judgement is involved in
determining which forward-looking information is
relevant for particular lending portfolios and for
determining each portfolio’s point-in-time
sensitivity.
In addition, judgement is required where
behavioural characteristics are applied in
estimating the lifetime of a facility which is used in
measuring ECL.
The PD, LGD and EAD models are subject to the Banking
Group’s model risk policy that stipulates periodic model
monitoring and re-validation, and defines approval
procedures and authorities according to model materiality.
There were no material changes to the policy.
Base case economic
forecast
The Banking Group derives a forward-looking
‘base case’ economic scenario which reflects our
view of future macroeconomic conditions.
There have been no changes to the types of forward-
looking variables (key economic drivers) used as model
inputs.
The base case assumptions have been updated to reflect
a stabilisation in inflation. Near-term growth forecasts have
been reduced, reflecting the impacts of global uncertainty.
Weaker GDP growth momentum pushes the return to
average out to 2027. Further interest rate cuts are
expected to contribute to a recovery in consumer
spending. The level of unemployment is elevated but
projected to fall.
The expected outcomes of key economic drivers for the
base case scenario at 30 September 2025 are described
in the section on page 29 under the heading ‘Base case
economic forecast assumptions’.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



29


12. Allowance for expected credit losses

(continued)
Judgement/Assumption Description Considerations for the year ended 30 September 2025
Probability weighting of
each economic scenario
(base case, upside,
downside and severe
downside scenarios)

Probability weighting of each economic scenario
is determined by management considering the
risks and uncertainties surrounding the base case
economic scenario at each measurement date.
The assigned probability weightings are subject
to a high degree of inherent uncertainty and
therefore the actual outcomes may be
significantly different to those projected.
Probability weightings remain unchanged from the prior
period, reflecting our assessment of the continuing
downside risks in local and global economies, and
uncertainties related to foreign policies.

The probability weightings for current and prior periods are
as detailed in the section on page 30 under the heading
‘Probability weightings’.
Management temporary
adjustments
Management temporary adjustments to the ECL
allowance are used in circumstances where it is
judged that our existing inputs, assumptions and
model techniques do not capture all the risk
factors relevant to our lending portfolios.
Emerging local or global macroeconomic,
microeconomic or political events, and natural
disasters that are not incorporated into our
current parameters, risk ratings, or forward-
looking information are examples of such
circumstances.
Management have continued to apply adjustments to
accommodate risks associated with higher inflation and
interest rates experienced over the last few years.
Management overlays have been made for risks particular
to mortgages and commercial lending. The total amount
of adjustments has decreased from the prior period as
anticipated risks are now represented in the portfolio
credit profiles.
Management temporary adjustments total NZ$52 million
(2024: NZ$73 million).
Management has considered and concluded no
temporary adjustment is required at 30 September 2025
to the ECL in relation to climate or weather related events
during the period.
Base case economic forecast assumptions
Continuing uncertainties described above increase the risk of the economic forecast resulting in an understatement or overstatement of the
ECL balance.
The economic drivers of the base case economic forecasts, reflective of the Banking Group’s view of future macroeconomic conditions used
at 30 September 2025 are set out below. For the years following the near-term forecasts below, the ECL models apply simplified assumptions
for the economic conditions to calculate lifetime loss.
Forecast calendar year
2025 2026 2027
New Zealand
GDP (annual % change) 0.9 2.4 2.7
Unemployment rate (annual average as a %) 5.2 4.8 4.3
Residential property prices (annual % change) 2.5 5.0 4.5
Consumer price index (annual average % change) 2.7 1.9 2.0

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



30


12. Allowance for expected credit losses

(continued)

Probability weightings
Probability weightings for each scenario are determined by management considering the risks and uncertainties surrounding the base case
economic scenario including the uncertainties described above.
The assigned probability weightings are subject to a high degree of inherent uncertainty and therefore the actual outcomes may be
significantly different to those projected. The Banking Group considers these weightings to provide estimates of the possible loss outcomes,
taking into account short and long term inter-relationships within the Banking Group’s credit portfolios. The weightings applied are set out
below:
2025 2024
Base 50.00% 50.00%
Upside 3.75% 3.75%
Downside 33.75% 33.75%
Severe downside 12.50% 12.50%
ECL - Sensitivity analysis
Given current economic uncertainties and the judgement applied to factors used in determining the expected default of borrowers in future
periods, expected credit losses reported by the Banking Group should be considered as a best estimate within a range of possible estimates.
The table below illustrates the sensitivity of collectively assessed ECL to key factors used in determining it as at 30 September 2025:

Total
NZ$m
Impact on total
1

NZ$m
Collectively assessed ECL as at 30 September 2025 (refer to page 25) 734 -
If 1% of Stage 1 facilities were included in Stage 2 739 +5
If 1% of Stage 2 facilities were included in Stage 1 733 -1



100% upside scenario 280 -454
100% base scenario 360 -374
100% downside scenario 819 +85
100% severe downside scenario 1,720 +986
1.
There is a n inverse and proportionate impact on profit or loss.
Individually assessed allowance for expected credit losses
In estimating individually assessed ECL, the Banking Group makes judgements and assumptions in relation to expected repayments, the
realisable value of collateral, business prospects for the customer, competing claims and the likely cost and duration of the work-out process.
Judgements and assumptions in respect of these matters have been updated to reflect amongst other things, the uncertainties described
above and in Note 1 About our financial statements.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



31





Financial liabilities
Outlined below is a description of how we classify and measure financial liabilities relevant to the note disclosures that follow.
Financial liabilities
Financial liabilities are measured at amortised cost, or FVTPL when they are held for trading. Additionally, financial liabilities can be designated at
FVTPL where:
• the designation eliminates or significantly reduces an accounting mismatch which would otherwise arise;
• a group of financial liabilities are managed and their performance are evaluated on a fair value basis, in accordance with a documented risk
management strategy; or
• the financial liability contains one or more embedded derivatives unless:
a) the embedded derivative does not significantly modify the cash flows that otherwise would be required by the contract; or
b) the embedded derivative is closely related to the host financial liability.
Where financial liabilities are designated as measured at fair value, gains or losses relating to changes in the entity’s own credit risk are
included in Other comprehensive income, except where doing so would create or enlarge an accounting mismatch in profit or loss.


13. Deposits and other borrowings

2025 2024



NZ$m NZ$m
Term deposits

60,808 59,308
On demand and short term deposits

65,405 60,983
Deposits not bearing interest

17,329 15,872
Total customer deposits

143,542 136,163
Certificates of deposit

882 1,174
Commercial paper

4,165 1,419
Securities sold under repurchase agreements

4,520 3,750
Deposits from Immediate Parent Company and NZ Branch

173 139
Deposits and other borrowings

153,282 142,645
Residual contractual maturity:


Within one year

147,892 136,741
More than one year

5,390 5,904
Deposits and other borrowings

153,282 142,645
Carried on balance sheet at:


Amortised cost

145,762 140,204
Fair value through profit or loss (designated on initial recognition)

7,520 2,441
Deposits and other borrowings

153,282 142,645


For deposits and other borrowings that:
• are not designated at FVTPL on initial recognition, we measure them at amortised cost and recognise their interest expense using the
effective interest rate method; and
• are managed on a fair value basis, reduce or eliminate an accounting mismatch or contain an embedded derivative, we designate them as
measured at FVTPL.
Refer to Note 16 Fair value of financial assets and financial liabilities for further details.
For deposits and other borrowings designated at fair value we recognise the amount of fair value gain or loss attributable to changes in the
Banking Group’s own credit risk in Other comprehensive income in retained earnings. Any remaining amount of fair value gain or loss we
recognise directly in profit or loss. Once we have recognised an amount in other comprehensive income, we do not later reclassify it to profit or
loss.
Securities sold under repurchase agreements represent a liability to repurchase the financial assets that remain on our balance sheet since the
risks and rewards of ownership remain with the Banking Group. Over the life of the repurchase agreement, we recognise the difference
between the sale price and the repurchase price and charge it to interest expense in profit or loss.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



32
14. Debt issuances
The Banking Group uses a variety of funding programmes to issue unsubordinated debt (including senior debt and covered bonds) and subordinated
debt. The difference between unsubordinated debt and subordinated debt is that, in a winding up of the issuer, holders of unsubordinated debt rank in
priority to holders of subordinated debt. Subordinated debt will be repaid only after the repayment of claims of depositors and other creditors (including
holders of unsubordinated debt) of that issuer.

2025 2024

NZ$m NZ$m
Senior debt 12,020 12,349
Covered bonds 2,510 2,156
Total unsubordinated debt

14,530 14,505
Subordinated debt
- Additional tier 1 capital 938 938
- Tier 2 capital 2,331 2,180
Total subordinated debt

3,269 3,118
Total debt issued

17,799 17,623
Residual contractual maturity:



Within one year 4,245 3,213
More than one year 13,554 14,410
Total debt issued

17,799 17,623

Total debt issued by currency
The table below shows the Banking Group’s issued debt by currency of issue, which broadly represents the debt holders’ base location.


2025 2024

NZ$m NZ$m
AUD Australian dollars

- 43
EUR Euro

6,902 5,892
NZD New Zealand dollars

2,773 2,035
CHF Swiss Francs

- 743
USD United States dollars

8,124 8,910
Total debt issued 17,799 17,623

The Bank has guaranteed the payment of interest and principal of covered bonds issued by its subsidiary ANZ New Zealand (Int’l) Limited. This obligation
is guaranteed by ANZNZ Covered Bond Trust Limited (the Covered Bond Guarantor), solely in its capacity as trustee of ANZNZ Covered Bond Trust (the
Covered Bond Trust). The Covered Bond Trust is a member of the Banking Group. The Covered Bond Guarantor is not a member of the Banking Group
and has no credit ratings applicable to its long term senior unsecured obligations. The covered bonds have been assigned a long term rating of Aaa and
AAA by Moody’s Investors Service and Fitch Ratings respectively. Refer to page 63 for the carrying amount of assets transferred to the ANZ Covered
Bond Trust pledged as security for covered bonds.
Subordinated debt
All subordinated debt is issued by the Bank and qualifies as regulatory capital for the Banking Group. Each subordinated debt instrument is classified as
either additional tier 1 (AT1) capital, in the case of the ANZ NZ Internal Capital Notes, or tier 2 capital for RBNZ’s capital adequacy purposes depending on
the terms and conditions of the instruments.
ANZ NZ Internal Capital Notes (ANZ NZ ICN)
ANZ NZ ICN are convertible non-cumulative perpetual subordinated debt securities. Holders of ANZ NZ ICN do not have any right to vote in general
meetings of the Bank. ANZ NZ ICN are classified as debt given there are circumstances beyond the Bank’s control where the principal is converted into a
variable number of ordinary shares of the Bank. Interest payments on ANZ NZ ICN are discretionary, non-cumulative and subject to conditions.
In the event of liquidation, holders of ANZ NZ ICN are entitled to claim an amount equal to the issue price of the ANZ NZ ICN. Holders of ANZ NZ ICN rank
behind the claims of all depositors and other creditors of the Bank (other than creditors that rank equally with the ANZ NZ ICN), equally with the rights of
holders of perpetual preference shares, and other equal ranking securities and obligations, and in priority to the rights of holders of ordinary shares.
The Bank issued NZ$938 million of ANZ NZ ICN to NZ Branch in 2016. The key terms of the ANZ NZ ICN are as follows:
The interest amount is based on a floating rate equal to the aggregate of the New Zealand 6 month bank bill rate plus 6.29% per annum.
ANZ NZ ICN provide the Bank with a redemption option on specified dates and a redemption or conversion to equity option in certain other
circumstances. Redemption is subject to RBNZ’s prior written approval. The ANZ NZ ICN will immediately convert into ordinary shares of the Bank if:
• the Banking Group’s common equity tier 1 capital ratio is equal to or less than 5.125% - known as a Common Equity Capital Trigger Event; or
• RBNZ directs the Bank to convert to equity or write-off the ANZ NZ ICN, or a statutory manager is appointed to the Bank and decides that the Bank
must convert to equity or write-off the ANZ NZ ICN.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



33


14. Debt issuances (continued)
In 2019, RBNZ decided to revise the capital adequacy requirements that apply to New Zealand locally incorporated registered banks. Under the revised
requirements, the ANZ NZ ICN are subject to a progressive reduction in their regulatory capital recognition and will not be recognised from 1 July 2028.
However, the ANZ NZ ICN are expected to fully contribute to the Bank’s capital adequacy requirements until at least their next optional call date in June
2026.
The Bank has determined that a regulatory event has occurred in respect of the ANZ NZ ICN. The occurrence of a regulatory event means that the Bank
may choose to redeem the ANZ NZ ICN at its discretion, subject to certain conditions including prior written approval from RBNZ. As at 7 November 2025,
no decision has been made on whether the Bank will redeem the ANZ NZ ICN.
Tier 2 capital
Tier 2 capital notes are fully paid unsecured subordinated notes. Interest payments are subject to the Bank being solvent at the time of, and immediately
following, the payment. Unpaid interest accumulates, and will be paid at the earlier of when the Bank is solvent again or at maturity. The Bank may repay
the notes early (the next optional call dates are specified below), or in certain other circumstances (such as a tax or regulatory event). Early repayment is
subject to certain conditions, including prior written approval from RBNZ.
The table below shows the tier 2 capital subordinated notes on issue at 30 September 2025 and 30 September 2024:

Next optional call date - Interest Interest Credit 2025 2024
Currency Face value Issue date Maturity subject to RBNZ's approval rate reset date rating
2
NZ$m NZ$m
NZD 600m Sep 2021 Sep 2031 Sep 2026 2.999% Sep 2026 A 598 597
USD 500m Aug 2022 Aug 2032 Aug 2027 5.548% Aug 2027 A 849 771
USD 500m Jul 2024 Jul 2034 Jul 2029 5.898% Jul 2029 A 884 812
Total tier 2 capital
1


2,331 2,180
1.
Carrying amounts are net of issuance costs and, where applicable, include fair value hedge accounting adjustments.
2.
Credit rating assigned by S&P Global Ratings as at 30 September 2025.


Debt issuances are initially recognised at fair value and are subsequently measured at amortised cost, except where designated at FVTPL.
Interest expense on debt issuances is recognised using the effective interest rate method. Where the Banking Group enters into a fair value hedge
accounting relationship, the fair value attributable to the hedged risk is reflected in adjustments to the carrying value of the debt.

Subordinated debt with capital-based conversion features (i.e. Common Equity Capital Trigger Events or Non-Viability Trigger Events) are
considered to contain embedded derivatives that we account for separately at FVTPL. The embedded derivatives arise because the number
of shares issued on conversion following any of those trigger events is subject to the maximum conversion number, however they have no
significant value as of the reporting date given the remote nature of those trigger events
.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



34
15. Financial risk management
Risk management framework and model
Introduction
The use of financial instruments is fundamental to the Banking Group’s business of providing banking and other financial services to our customers. The
associated financial risks (primarily credit, market, and liquidity risks) are a significant portion of the Banking Group’s material risks.
This note details the Banking Group’s financial risk management policies, processes and quantitative disclosures in relation to the material financial risks:
Material financial risks Key sections applicable to this risk
Credit risk
The risk of financial loss resulting from:
• a counterparty failing to fulfil its obligations; or
• a decrease in credit quality of a counterparty resulting in a financial loss.
Credit risk incorporates the risks associated with us lending to customers who
could be impacted by climate change, changes to laws, regulations, or other
policies adopted by governments or regulatory authorities. Climate change
impacts include both physical risks (climate- or weather-related events) and
transition risks resulting from the adjustment to a low emissions economy.
Transition risks include resultant changes to laws, regulations and policies
noted above.

• Credit risk overview, management and control responsibilities
• Maximum exposure to credit risk
• Credit quality
• Concentrations of credit risk
• Collateral management
Market risk
The risk to the Banking Group’s earnings arising from:
• changes in interest rates, foreign exchange rates, credit spreads, volatility
and correlations; or
• fluctuations in bond, commodity or equity prices.

• Market risk overview, management and control responsibilities
• Measurement of market risk
• Traded and non-traded market risk
• Foreign currency risk – structural exposure

Liquidity and funding risk
The risk that the Banking Group is unable to meet its payment obligations as
they fall due, including:
• repaying depositors or maturing wholesale debt; or
• the Banking Group having insufficient capacity to fund increases in assets.

• Liquidity risk overview, management and control responsibilities
• Key areas of measurement for liquidity risk
• Liquidity portfolio management
• Funding position
• Residual contractual maturity analysis of the Banking Group’s
liabilities
Overview
An overview of our risk management framework
This overview is provided to aid the users of the financial statements in understanding the context of the financial disclosures required under NZ IFRS 7
Financial Instruments: Disclosures.
The Board is responsible for establishing and overseeing the Banking Group’s Risk Management Framework (RMF). The Board has delegated authority to
the Bank’s Board Risk Committee (BRC) to develop and monitor compliance with the Banking Group’s risk management policies. The BRC reports regularly
to the Board on its activities.
The Board approves the strategic objectives of the Banking Group including:
• the Risk Appetite Statement (RAS), which sets out the Board’s expectations regarding the degree of risk that the Banking Group is prepared to accept
in pursuit of its strategic objectives and business plan; and
• the Risk Management Strategy (RMS), which describes the Banking Group’s strategy for managing risks and the key elements of the RMF that give
effect to this strategy. This includes a description of each material risk, and an overview of how the RMF addresses each risk, with reference to the
relevant policies, standards and procedures. It also includes information on how the Banking Group identifies, measures, evaluates, monitors, reports
and controls or mitigates material risks.
The Banking Group, through its training and management standards and procedures, aims to maintain a disciplined and robust control environment in
which all employees understand their roles and obligations. At the Banking Group, risk is everyone’s responsibility.
The Banking Group has an independent risk management function, headed by the Chief Risk Officer who:
• is responsible for overseeing the risk profile and the risk management framework;
• can effectively challenge activities and decisions that materially affect the Banking Group’s risk profile; and
• has an independent reporting line to the BRC to enable the appropriate escalation of issues of concern.
Internal Audit Function
Internal Audit is a function independent of management whose role is to provide the Board and management with an effective and independent appraisal
of the internal controls established by management. Operating under a Board approved Charter, the reporting line for the outcomes of work conducted by
Internal Audit is direct to the Chair of the Audit Committee, with a direct communication line to the Chief Executive Officer and the external auditor. The
Internal Audit Plan is developed using a risk based approach and is reviewed quarterly. The Audit Committee approves the plan.
All audit activities are conducted in accordance with international internal auditing standards, and the results of the activities are reported to the Audit
Committee and management. These results influence the performance assessment of business heads. Furthermore, Internal Audit monitors the
remediation of audit issues and reports the current status of any outstanding audits.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



35
15. Financial risk management (continued)
Credit risk
Credit risk overview, management and control responsibilities
Granting credit facilities to customers is one of the Banking Group’s major sources of income. As this activity is also a principal risk, the Banking Group
dedicates considerable resources to its management. The Banking Group assumes credit risk in a wide range of lending and other activities in diverse
markets and in many jurisdictions. Credit risks arise from traditional lending to customers as well as from interbank, treasury, trade finance and capital
markets activities.
Our credit risk management framework ensures we apply a consistent approach across the Banking Group when we measure, monitor and manage the
credit risk appetite set by the Board. The Board is assisted and advised by the BRC in discharging its duty to oversee credit risk. The BRC:
•

approves the credit risk appetite and credit strategies; and
•

approves policies and control frameworks for the management of the Banking Group’s credit risk.
The BRC delegates responsibility for day-to-day management of credit risk and compliance with credit risk policies to the Bank’s Credit Risk Management
Committee (CRMC).
We quantify credit risk through an internal credit rating system (Master Scale) to ensure consistency across exposure types and to provide a consistent
framework for reporting and analysis. The system uses models and other tools to measure the following for customer exposures:
Probability of Default (PD) Expressed by a Customer Credit Rating (CCR), reflecting the Banking Group’s assessment of a customer’s
ability to service and repay debt.
Exposure at Default (EAD) The expected balance sheet exposure at default taking into account repayments of principal and interest,
expected additional drawdowns and accrued interest at the time of default.
Loss Given Default (LGD) Expressed by a Security Indicator (SI) ranging from A to G. The SI is calculated by reference to the
percentage of loan covered by security which the Banking Group can realise if a customer defaults. The A-
G scale is supplemented by a range of other SIs which cover such factors as cash cover and sovereign
backing. For retail and some small business lending, we group exposures into large homogeneous pools,
and the LGD is assigned at the pool level.
Our specialist credit risk teams develop and validate the Banking Group’s PD and LGD rating models. The outputs from these models drive our day-to-day
credit risk management decisions including origination, pricing, approval levels, regulatory capital adequacy, internal capital allocation, and credit
provisioning.
All customers with whom the Banking Group has a credit relationship are assigned a CCR at origination via either of the following assessment approaches:
Large and more complex lending Retail and some small business lending
Rating models provide a consistent and structured assessment, with
judgement required around the use of out-of-model factors. We
handle credit approval on a dual approval basis, jointly with the
business writer and an independent credit officer.
Automated assessment of credit applications using a combination of
scoring (application and behavioural), policy rules and external credit
reporting information. If the application does not meet the automated
assessment criteria, then it is subject to manual assessment.
We use the Banking Group’s internal CCR to manage the credit quality of financial assets. To enable wider comparisons, the Banking Group’s CCRs are
mapped to external rating agency scales as follows:
Credit quality
description

Internal CCR

The Banking Group customer requirements
Moody’s
Ratings
S&P Global
Ratings
Strong CCR 0+ to 4- Demonstrated superior stability in their operating and financial
performance over the long-term, and whose earnings capacity is not
significantly vulnerable to foreseeable events.
Aaa – Baa3 AAA – BBB-
Satisfactory CCR 5+ to 6- Demonstrated sound operational and financial stability over the
medium to long-term even though some may be susceptible to
cyclical trends or variability in earnings.
Ba1 – B1 BB+ – B+
Weak CCR 7+ to 8= Demonstrated some operational and financial instability, with
variability and uncertainty in profitability and liquidity projected to
continue over the short and possibly medium term.
B2 – Caa B - CCC
Defaulted CCR 8- to 10 When doubt arises as to the collectability of a credit facility, the
financial instrument (or ‘the facility’) is classified as defaulted.
n/a n/a

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



36
15. Financial risk management (continued)
Credit risk (continued)
Maximum exposure to credit risk
For financial assets recognised on the balance sheet, the maximum exposure to credit risk is the carrying amount. In certain circumstances there may be
differences between the carrying amounts reported on the balance sheet and the amounts reported in the tables below. Principally, these differences
arise in respect of financial assets that are subject to risks other than credit risk, such as equity instruments which are primarily subject to market risk, or
bank notes and coins.
For undrawn facilities, this maximum exposure to credit risk is the full amount of the committed facilities. For contingent exposures, the maximum exposure
to credit risk is the maximum amount the Banking Group would have to pay if the instrument is called upon.
The table below shows our maximum exposure to credit risk of on-balance sheet and off-balance sheet positions before taking account of any collateral
held or other credit enhancements.
Maximum exposure

Reported Excluded
1
to credit risk

2025 2024 2025 2024 2025 2024

NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m
On-balance sheet positions
Net loans and advances 158,683 151,666 - - 158,683 151,666

Other financial assets:
Cash and cash equivalents 9,386 11,634 130 130 9,256 11,504
Settlement balances receivable
1,620 574 - - 1,620 574
Collateral paid
1,114 1,041 - - 1,114 1,041
Trading securities
6,348 5,576 - - 6,348 5,576
Derivative financial instruments
11,449 10,181 - - 11,449 10,181
Investment securities
16,458 13,295 - - 16,458 13,295
Other financial assets
2
860 1,113 - - 860 1,113
Total other financial assets
47,235 43,414 130 130 47,105 43,284
Subtotal 205,918 195,080 130 130 205,788 194,950
Off-balance sheet positions
Undrawn and contingent facilities
3
30,116 28,511 - - 30,116 28,511
Total
236,034 223,591 130 130 235,904 223,461
1.
Coins, notes and cash at bank within cash and cash equivalents were excluded as they do not have credit risk exposure.
2.
Other financial assets mainly comprise accrued interest and acceptances.
3.
Undrawn and contingent facilities include guarantees, letters of credit and performance related contingencies, net of collectively assessed and individually assessed allowance for expected credit losses.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



37
15. Financial risk management (continued)
Credit risk (continued)
Credit quality
An analysis of the Banking Group’s credit risk exposure is presented in the following tables based on the Banking Group’s internal credit quality rating by
stage without taking account of the effects of any collateral or other credit enhancements.
Net loans and advances Stage 3

Stage 1 Stage 2
Collectively
assessed
Individually
assessed Total
As at 30 September 2025 NZ$m NZ$m NZ$m NZ$m NZ$m
Strong 79,659 1,315 - - 80,974
Satisfactory 61,298 5,568 - - 66,866
Weak 5,283 3,045 - - 8,328
Defaulted - - 1,240 369 1,609
Gross loans and advances at amortised cost 146,240 9,928 1,240 369 157,777
Allowance for ECL (188) (320) (96) (64) (668)
Net loans and advances at amortised cost 146,052 9,608 1,144 305 157,109
Coverage ratio 0.13% 3.22% 7.74% 17.34% 0.42%
Loans and advances at FVTPL 961
Unearned income (26)
Capitalised brokerage and other origination costs 639
Net carrying amount 158,683

As at 30 September 2024

Strong 73,623 1,549 - - 75,172
Satisfactory 59,827 6,901 - - 66,728
Weak 4,903 3,470 - - 8,373
Defaulted - - 1,253 370 1,623
Gross loans and advances at amortised cost 138,353 11,920 1,253 370 151,896
Allowance for ECL (187) (370) (104) (64) (725)
Net loans and advances at amortised cost 138,166 11,550 1,149 306 151,171
Coverage ratio 0.14% 3.10% 8.30% 17.30% 0.48%
Unearned income (21)
Capitalised brokerage and other origination costs 516
Net carrying amount
151,666

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



38
15. Financial risk management (continued)
Credit risk (continued)
Off-balance sheet commitments - undrawn and contingent facilities
Stage 3

Stage 1 Stage 2
Collectively
assessed
Individually
assessed Total
As at 30 September 2025 NZ$m NZ$m NZ$m NZ$m NZ$m
Strong 24,065 254 - - 24,319
Satisfactory 4,169 1,097 - - 5,266
Weak 223 403 - - 626
Defaulted - - 16 23 39
Gross undrawn and contingent facilities 28,457 1,754 16 23 30,250
Allowance for ECL included in Other provisions (refer to Note 19) (70) (57) (3) (4) (134)
Net undrawn and contingent facilities 28,387 1,697 13 19 30,116
Coverage ratio 0.25% 3.25% 18.75% 17.39% 0.44%

As at 30 September 2024

Strong 23,508 196 - - 23,704
Satisfactory 3,530 1,087 - - 4,617
Weak 30 260 - - 290
Defaulted - - 26 10 36
Gross undrawn and contingent facilities 27,068 1,543 26 10 28,647
Allowance for ECL included in Other provisions (refer to Note 19) (74) (56) (3) (3) (136)
Net undrawn and contingent facilities 26,994 1,487 23 7 28,511
Coverage ratio 0.27% 3.63% 11.54% 30.00% 0.47%


Other financial assets


2025 2024

NZ$m NZ$m
Strong

47,019 43,245
Satisfactory

76 32
Weak

10 7
Defaulted

- -
Total carrying amount

47,105 43,284

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



39
15. Financial risk management (continued)
Credit risk (continued)
Concentrations of credit risk
Credit risk becomes concentrated when a number of customers are engaged in similar activities, have similar economic characteristics, or have similar
activities within the same geographic region – therefore, they may be similarly affected by changes in economic or other conditions. The Banking Group
monitors its credit portfolio to manage risk concentration and rebalance the portfolio. The Banking Group also applies single customer counterparty limits
to protect against unacceptably large exposures to one single customer.
Analysis of financial assets by industry sector is based on Australian and New Zealand Standard Industrial Classification (ANZSIC) codes. The significant
categories shown are the level one New Zealand Standard Industry Output Categories (NZSIOC), except that Agriculture is shown separately.
Composition of financial instruments that give rise to credit risk by industry group are presented below:

Loans and
advances
Other
financial
assets
Off-balance
sheet credit
related commitments Total

2025 2024 2025 2024 2025 2024 2025 2024

NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m
New Zealand residents
Agriculture 15,517 15,489 70 82 1,055 745 16,642 16,316
Forestry and fishing, agriculture services 557 557 5 4 102 94 664 655
Mining 83 158 1 2 80 226 164 386
Manufacturing 2,347 2,444 184 94 2,182 1,952 4,713 4,490
Electricity, gas, water and waste services 1,263 589 298 290 2,018 1,383 3,579 2,262
Construction 1,093 961 5 6 970 969 2,068 1,936
Wholesale trade 1,433 1,439 70 39 1,476 1,578 2,979 3,056
Retail trade and accommodation 2,638 2,902 13 28 770 621 3,421 3,551
Transport, postal and warehousing 1,060 1,042 40 89 853 706 1,953 1,837
Finance and insurance services 2,309 864 12,356 13,004 1,272 1,465 15,937 15,333
Rental, hiring & real estate services 38,125 37,098 1,916 1,960 1,772 1,996 41,813 41,054
Professional, scientific, technical,
administrative and support services
1,046 1,054 21 8 616 440 1,683 1,502
Public administration and safety 181 209 15,196 10,938 721 845 16,098 11,992
Health care and social assistance 886 915 11 9 338 294 1,235 1,218
Households 86,779 82,871 356 427 14,400 13,760 101,535 97,058
All other New Zealand residents
1
1,172 1,153 71 109 1,338 1,384 2,581 2,646
Subtotal 156,489 149,745 30,613 27,089 29,963 28,458 217,065 205,292
Overseas

Finance and insurance services 61 66 16,259 16,170 287 189 16,607 16,425
Households 1,550 1,508 6 8 - - 1,556 1,516
All other non-New Zealand residents 638 577 227 17 - - 865 594
Subtotal 2,249 2,151 16,492 16,195 287 189 19,028 18,535
Gross subtotal 158,738 151,896 47,105 43,284 30,250 28,647 236,093 223,827
Allowance for ECL (668) (725) - - (134) (136) (802) (861)
Subtotal 158,070 151,171 47,105 43,284 30,116 28,511 235,291 222,966
Unearned income (26) (21) - - - - (26) (21)
Capitalised brokerage and other origination
costs
639 516 - - - - 639 516
Maximum exposure to credit risk 158,683 151,666 47,105 43,284 30,116 28,511 235,904 223,461
1.
Other includes exposures to information media and telecommunications; education and training; arts and recreation services; and other services.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



40
15. Financial risk management (continued)
Credit risk (continued)
Collateral management
We use collateral for on and off-balance sheet exposures to mitigate credit risk if a counterparty cannot meet its repayment obligations. Where there is
sufficient collateral, an expected credit loss is not recognised. This is largely the case for certain lending products, such as margin loans and reverse
repurchase agreements that are secured by the securities purchased using the lending. For some products, the collateral provided by customers is
fundamental to the product’s structuring, so it is not strictly the secondary source of repayment - for example, lending secured by trade receivables is
typically repaid by the collection of those receivables. During the period there was no change in our collateral policies.
The nature of collateral or security held for the relevant classes of financial assets is as follows:
Net loans and advances
Loans – housing and personal Housing loans are secured by mortgage(s) over property and additional security may take the form of
guarantees and deposits.
Personal lending (including credit cards and overdrafts) is predominantly unsecured. If we take security,
then it is restricted to eligible vehicles, motor homes and other assets.
Loans – business Business loans may be secured, partially secured or unsecured. Typically, we take security by way of a
mortgage over property and/or a charge over the business or other assets.
If appropriate, we may take other security to mitigate the credit risk, such as guarantees, standby letters
of credit or derivative protection.
Other financial assets

Trading securities, investment
securities, derivatives and other
financial assets
For trading securities, we do not seek collateral directly from the issuer or counterparty. However, the
collateral may be implicit in the terms of the instrument (for example, with an asset-backed security). The
terms of debt securities may include collateralisation.
For derivatives we will have large individual exposures to single name counterparties such as central
clearing houses, financial institutions, and other institutional clients. Open derivative positions with these
counterparties are aggregated and cash collateral (or other forms of eligible collateral) is exchanged daily
through the respective Credit Support Annex (CSA) agreements. The collateral is provided by the
counterparty when their position is out of the money (or provided to the counterparty by the Banking
Group when our position is out of the money). Credit risk will remain where the full amount of the
derivative exposure is not covered by any collateral.
Off-balance sheet positions

Undrawn and contingent facilities Collateral for off-balance sheet positions is mainly held against undrawn facilities, and they are typically
performance bonds or guarantees. Undrawn facilities that are secured include housing loans secured by
mortgages over residential property and business lending secured by commercial real estate and/or
charges over business assets.
The table below shows the estimated value of collateral we hold and the net unsecured portion of credit exposures:

Maximum exposure
to credit risk
Total value
of collateral
1

Unsecured portion
of credit exposure


2025 2024 2025 2024 2025 2024

NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m
Net loans and advances 158,683 151,666 149,636 144,547 9,047 7,119
Other financial assets 47,105 43,284 5,985 3,605 41,120 39,679
Off-balance sheet positions
30,116 28,511 17,260 15,700 12,856 12,811
Total
235,904 223,461 172,881 163,852 63,023 59,609
1.
In estimating the value of collateral for housing loans, customers are assumed to be meeting their insurance obligations for the properties over which the mortgages are secured.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



41
15. Financial risk management (continued)
Market risk
Market risk overview, management and control responsibilities
Market risk stems from the Banking Group’s trading and balance sheet management activities and the impact of changes and correlations between
interest rates, foreign exchange rates, credit spreads, commodities, equities and the volatility within these asset classes.
The BRC delegates responsibility for day-to-day management of both market risk and compliance with market risk policies to the Bank’s Asset & Liability
Management Committee (ALCO).
Within overall strategies and policies established by the BRC, business units and risk management have joint responsibility for the control of market risk at
the Banking Group level. The Market & Treasury Risk team (a specialist risk management unit independent of the business) allocates market risk limits at
various levels and monitors and reports on them daily. This detailed framework allocates individual limits to manage and control exposures using risk
factors and profit and loss limits.
Management, measurement and reporting of market risk is undertaken in two broad categories:
Traded market risk Non-traded market risk
Risk of loss from changes in the value of financial instruments due to
movements in price factors for both physical and derivative trading
positions. Principal risk categories monitored are:
•

Currency risk – potential loss arising from changes in foreign
exchange rates or their implied volatilities.
•

Interest rate risk – potential loss from changes in market interest
rates or their implied volatilities.
•

Credit spread risk – potential loss arising from a movement in
margin or spread relative to a benchmark.
•

Commodity risk – potential loss arising from changes in
commodity prices or their implied volatilities.
•

Equity risk – potential loss arising from changes in equity prices.
Risk of loss associated with the management of non-traded interest rate risk,
liquidity risk and foreign exchange exposures. This includes interest rate risk in
the banking book. This risk of loss arises from adverse changes in the overall
and relative level of interest rates for different tenors, differences in the actual
versus expected net interest margin, and the potential valuation risk associated
with embedded options in financial instruments and bank products.
Measurement of market risk
We primarily manage and control market risk using Value at Risk (VaR), sensitivity analysis and stress testing.
VaR measures the Banking Group’s possible daily loss based on historical market movements.
The Banking Group’s VaR approach for both traded and non-traded risk is historical simulation. We use historical changes in market rates, prices and
volatilities over:
•

the previous 500 business days, to calculate standard VaR; and
•

a 1-year stressed period, to calculate stressed VaR.
We calculate traded and non-traded VaR using a one-day holding period. For stressed VaR we use a ten-day period. Back testing is used to ensure our
VaR models remain accurate.
The Banking Group measures VaR at a 99% confidence interval which means there is a 99% chance that a loss will not exceed the VaR for the relevant
holding period.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



42
15. Financial risk management (continued)
Market risk (continued)
Traded and non-traded market risk
Traded market risk
The table below shows the traded market risk VaR on a diversified basis by risk categories:

2025 2024

High for Low for Average High for Low for Average

As at year year for year As at
2
year year for year

NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m
Traded value at risk 99% confidence
Foreign exchange 0.6 1.7 0.2 0.5 0.8 1.4 0.3 0.8
Interest rate
0.9 2.7 0.6 1.2 0.8 3.8 0.8 1.5
Credit
0.5 0.9 0.1 0.4 0.5 1.1 0.1 0.7
Diversification benefit
1
(0.5) n/a n/a (0.8) (0.5) n/a n/a (1.0)
Total VaR 1.5 4.1 0.6 1.3 1.3 4.8 1.2 2.0
1.
The diversification benefit reflects risks that offset across categories. The high and low VaR figures reported for each factor did not necessarily occur on the same day as the high and low VaR reported
for the Banking Group as a whole. Consequently, a diversification benefit for high and low would not be meaningful and is therefore omitted from the table.
2.
Comparative amounts have been adjusted to be consistent with the current period’s presentation.

Non-traded market risk
Balance sheet risk management
The principal objectives of balance sheet risk management are to maintain acceptable levels of interest rate and liquidity risk to mitigate the negative
impact of movements in interest rates on the earnings and market value of the Banking Group’s banking book, while ensuring the Banking Group
maintains sufficient liquidity to meet its obligations as they fall due.
Interest rate risk management
Non-traded interest rate risk relates to the potential adverse impact of changes in market interest rates on the Banking Group’s future net interest income.
This risk arises from two principal sources, namely mismatches between the repricing dates of interest bearing assets and liabilities; and the investment of
capital and other non-interest bearing liabilities and assets. Interest rate risk is reported using VaR and scenario analysis (based on the impact of a 1% rate
shock). Th
e table below shows VaR figures for non-traded interest rate risk for the Banking Group.

2025 2024

As at
High for
year
Low for
year
Average
for year As at
High for
year
Low for
year
Average
for year

NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m
Non-traded value at risk 99% confidence

Total VaR 26.8 30.1 21.9 26.0 29.4 37.5 26.3 28.8

We undertake scenario analysis to stress test the impact of extreme events on the Banking Group’s market risk exposures. We model a 1% overnight
parallel positive shift in the yield curve to determine the potential impact on our net interest income over the next 12 months. This is a standard risk
measure which assumes the parallel shift is reflected in all wholesale and customer rates.
The table below shows the outcome of this risk measure for the current and previous financial years, expressed as a percentage of reported net interest
income.

2025 2024
Impact of 1% rate shock on the next 12 months' net interest income
As at period end 0.3% -0.4%
Maximum exposure 0.6% 1.1%
Minimum exposure -0.4% -0.6%
Average exposure (in absolute terms) 0.0% 0.4%

Foreign currency risk – structural exposures
Where it is considered appropriate, the Banking Group takes out economic hedges against larger foreign exchange denominated expenditure streams
(primarily Australian Dollar, US Dollar and US Dollar correlated). The primary objective of hedging these streams is to protect against a significant decrease
in shareholder value due to negative impacts of foreign exchange rate movements.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



43
15. Financial risk management (continued)
Liquidity and funding risk
Liquidity risk overview, management and control responsibilities
Liquidity risk is the risk that the Banking Group:
• is unable to meet its payment obligations (including repaying depositors or maturing wholesale debt) when they fall due; or
• does not have the appropriate amount, tenor and composition of funding and liquidity to fund increases in its assets.
Management of liquidity and funding is overseen by ALCO following delegation from the BRC. Within an overall framework established by the BRC,
Treasury and Market & Treasury Risk have responsibility for the control of funding and liquidity risk. Banking Group liquidity and funding risks are governed
by principles approved by the BRC that include:
• maintaining the ability to meet all payment obligations in the immediate term;
• maintaining the ability to meet ‘survival horizons’ under Banking Group specific and general market liquidity stress scenarios to meet cash flow
obligations over the short to medium term;
• maintaining strength in the balance sheet structure to ensure long term resilience in the liquidity and funding risk profile;
• adequately diversifying funding arrangements by counterparty, geography and tenor;
• maintaining a portfolio of high-quality liquid assets to act as a source of liquidity in times of stress and support normal day-to-day payment activities;
and
• establishing a stress funding plan that would cover a range of market funding scenarios.
Key areas of measurement for liquidity and funding risk
Supervision and regulation
RBNZ requires the Bank to have a comprehensively documented Board approved liquidity framework that specifies governance and oversight
responsibilities and principal methods that will be used to measure, monitor and control liquidity risk. This also includes a formal contingency plan for
dealing with a liquidity crisis. The Banking Group is required to meet one week and one month liquidity mismatch ratios and a one year core funding ratio
each day.
Scenario modelling
A key component of the Banking Group’s liquidity management framework is scenario modelling of a range of regulatory and internal liquidity metrics.
Potential severe liquidity crisis scenarios that model the behaviour of cash flows where there is a problem (real or perceived) may include, but are not
limited to, operational issues, doubts about the solvency of the Banking Group, or adverse credit rating changes. Under these scenarios the Banking
Group may have significant difficulty rolling over or replacing funding. The Banking Group’s liquidity policy requires sufficient high quality liquid assets to be
held to meet its liquidity needs for the following one month under the modelled scenarios.
As at 30 September 2025, the Banking Group was operating above the required minimums for the modelled scenarios.
Structural balance sheet metrics
The Banking Group’s liquidity management framework also encompasses structural balance sheet metrics such as the RBNZ’s core funding ratio. The
core funding ratio is designed to limit the amount of wholesale funding required to be rolled over within a one year timeframe and so interacts with the
modelled liquidity scenarios to maintain the Banking Group‘s liquidity position.
Wholesale funding
The Banking Group’s wholesale funding strategy is designed to deliver a sustainable portfolio of wholesale funds that balances cost efficiency with
targeting diversification by markets, investors, currencies, maturities and funding structures. Short-term and long-term wholesale funding is managed and
executed by Treasury.
The Banking Group also uses maturity concentration limits under the wholesale funding and liquidity management framework. Maturity concentration limits
ensure that the Banking Group is not required to issue large volumes of new wholesale funding within a short time period to replace maturing wholesale
funding. Funding instruments used to meet the wholesale borrowing requirement must be on a pre-established list of approved products.
Funding capacity and debt issuance planning
The Banking Group adopts a conservative approach to determine its funding capacity. Annually, a funding plan is approved by the Bank’s Board. The plan
is supplemented by regular updates and is linked to the Banking Group’s three-year strategic planning cycle.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



44
15. Financial risk management (continued)
Liquidity and funding risk (continued)
Liquidity portfolio management
The Banking Group holds a diversified portfolio of cash and high quality liquid securities primarily to support liquidity risk management. The size of the
Banking Group’s liquidity portfolio is determined with consideration of the amount required to meet the requirements of its internal and regulatory liquidity
scenario metrics.

2025 2024

NZ$m NZ$m
Central and local government bonds 14,487 9,684
Government treasury bills 111 207
Certificates of deposit 537 359
Other bonds 7,543 8,205
Securities eligible to be accepted as collateral in repurchase transactions 22,678 18,455
Cash and balances with central banks 7,270 9,723
Total liquidity portfolio 29,948 28,178

Assets held in the Banking Group’s liquidity portfolio are all denominated in New Zealand dollars and include balances held with RBNZ and securities issued
by the New Zealand Government, supranational agencies, highly rated banks, state owned enterprises, local authorities (including through a funding
authority) and highly rated corporates.
The Bank also held unencumbered internal residential mortgage backed securities (RMBS) which would be accepted as collateral by RBNZ in repurchase
transactions. These holdings would entitle the Bank to enter into repurchase transactions with RBNZ with a value of NZ$11,441 million at 30 September
2025 (2024: NZ$10,480 million).
RBNZ Term Lending Facility (TLF) and Funding for Lending Programme (FLP)
• Between May 2020 and July 2021, RBNZ made funds available under the TLF to promote lending to businesses. The TLF is a five-year secured
funding facility for New Zealand banks at a fixed rate of 0.25%.
• Between December 2020 and December 2022, RBNZ made funds available under the FLP to lower the cost of borrowing for New Zealand
businesses and households. The FLP is a three-year secured funding facility for New Zealand banks at a floating rate of the New Zealand Official Cash
Rate (OCR).
As at 30 September 2025, the Bank had NZ$165 million drawn under the TLF (2024: NZ$228 million) and NZ$1,000 million drawn under the FLP (2024:
NZ$2,500 million). These amounts are included in securities sold under repurchase agreements in Note 13 Deposits and other borrowings.
Liquidity crisis contingency planning
The Banking Group maintains a liquidity crisis contingency plan to define an approach for analysing and responding to a liquidity-threatening event. The
framework includes:
• the establishment of crisis severity/stress levels;
• clearly assigned crisis roles and responsibilities;
• early warning signals indicative of an approaching crisis, and mechanisms to monitor and report these signals;
• action plans, and courses of action for altering asset and liability behaviour;
• procedures for crisis management reporting, and covering cash-flow shortfalls; and
• the approach to internal and external communications.
Funding position
The Banking Group actively uses balance sheet disciplines to prudently manage the funding mix. The Banking Group employs funding metrics to ensure
that an appropriate proportion of its assets are funded from stable sources, including customer liabilities, longer-dated wholesale debt (with remaining
term exceeding one year) and equity.


2025 2024

NZ$m NZ$m
Funding composition


Customer deposits

143,542 136,163
Wholesale funding


Debt issuances

17,799 17,623
Certificates of deposit

882 1,174
Commercial paper

4,165 1,419
Other borrowings

4,693 3,889
Total wholesale funding

27,539 24,105
Total deposits and wholesale funding

171,081 160,268

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



45
15. Financial risk management (continued)
Liquidity and funding risk (continued)
Analysis of funding liabilities by industry is based on ANZSIC codes. The significant categories shown are the level one NZSIOC.


2025 2024

NZ$m NZ$m
Customer deposits by industry - New Zealand residents



Agriculture, forestry and fishing

4,595 3,949
Mining

222 313
Manufacturing

2,967 3,091
Construction

3,195 2,911
Wholesale trade

2,389 2,326
Retail trade and accommodation

2,312 2,195
Transport, postal and warehousing

1,616 1,530
Financial and insurance services

15,591 13,773
Rental, hiring and real estate services

3,697 3,441
Professional, scientific, technical, administrative and support services

6,803 6,750
Public administration and safety

1,428 1,855
Health care and social assistance

1,685 1,587
Arts, recreation and other services

2,507 2,466
Households

80,832 77,164
All other New Zealand residents
1


2,662 2,577
Subtotal

132,501 125,928
Customer deposits by industry - overseas



Households

10,260 9,488
All other non-New Zealand residents

781 747
Subtotal

11,041 10,235
Total customer deposits

143,542 136,163
Wholesale funding (financial and insurance services industry)



New Zealand

7,543 6,547
Overseas

19,996 17,558
Total wholesale funding

27,539 24,105
Total deposits and wholesale funding

171,081 160,268




Concentrations of funding by geography



New Zealand

140,044 132,475
Australia

1,790 1,575
United States

12,983 11,156
Europe

8,158 7,747
Other countries

8,106 7,315
Total deposits and wholesale funding

171,081 160,268
1.
Other includes electricity, gas, water and waste services; information media and telecommunications; and education and training.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



46
15. Financial risk management (continued)
Liquidity and funding risk (continued)
Residual contractual maturity analysis of the Banking Group’s financial liabilities
The tables below provide residual contractual maturity analysis of financial liabilities at 30 September 2025 and 30 September 2024 within relevant
maturity groupings. All outstanding debt issuances are profiled on the earliest date on which the Banking Group may pay. The amounts represent principal
and interest cash flows – so they may differ from equivalent amounts reported on the Balance Sheet.
It should be noted that this is not how the Banking Group manages its liquidity risk. The management of this risk is detailed on page 43.

On demand
Less than
3 months
3 to 12
months
1 to 5
years
After
5 years Total

As at 30 September 2025 NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m
Settlement balances payable 3,403 1,232 - - - 4,635
Collateral received - 1,725 - - - 1,725
Deposits and other borrowings 82,737 34,918 31,628 5,957 - 155,240
Derivative financial liabilities (trading) - 10,333 - - - 10,333
Debt issuances
1
- 15 4,779 14,764 - 19,558
Lease liabilities - 14 41 137 42 234
Other financial liabilities - 26 10 87 180 303
Derivative financial instruments
(balance sheet management)

- gross inflows - (548) 3,100 7,287 819 10,658
- gross outflows - 854 (3,220) (7,456) (870) (10,692)

As at 30 September 2024

Settlement balances payable 3,772 1,620 - - - 5,392
Collateral received - 525 - - - 525
Deposits and other borrowings 76,860 25,392 36,705 6,458 2 145,417
Derivative financial liabilities (trading) - 11,109 - - - 11,109
Debt issuances
1
- 400 3,284 14,692 1,191 19,567
Lease liabilities - 14 41 156 46 257
Other financial liabilities - 454 32 152 296 934
Derivative financial instruments
(balance sheet management)
2


- gross inflows - (540) 7,194 4,307 1,203 12,164
- gross outflows - 809 (7,365) (4,345) (1,096) (11,997)
1.
Any callable wholesale debt instruments have been included at their next call date. Refer to Note 14 Debt issuances for subordinated debt call dates.
2.
Comparative amounts have been adjusted to be consistent with the current period’s presentation.
At 30 September 2025, NZ$30,250 million (2024: NZ$28,647 million) of its credit related commitments and contingent liabilities mature in less than 1
year, based on the earliest date on which the Banking Group may be required to pay.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



47
16. Fair value of financial assets and financial liabilities
Classification of financial assets and financial liabilities
The Banking Group recognises and measures financial instruments at either fair value or amortised cost, with a significant number of financial instruments
on the Balance Sheet at fair value.
Fair value is the best estimate of the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market
participants at the measurement date.
The following tables set out the classification of financial assets and liabilities according to their measurement bases together with their carrying amounts
as recognised on the Balance Sheet.

2025 2024

At amortised
cost
At fair
value Total
At amortised
cost
At fair
value Total

Note

NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m
Financial assets



Cash and cash equivalents
1
7

7,760 1,626 9,386 10,590 1,044 11,634
Settlement balances receivable

1,620 - 1,620 574 - 574
Collateral paid

1,114 - 1,114 1,041 - 1,041
Trading securities 8

- 6,348 6,348 - 5,576 5,576
Derivative financial instruments 9

- 11,449 11,449 - 10,181 10,181
Investment securities 10

- 16,458 16,458 - 13,295 13,295
Net loans and advances 11

157,722 961 158,683 151,666 - 151,666
Other financial assets

860 - 860 1,113 - 1,113
Total


169,076 36,842 205,918 164,984 30,096 195,080
Financial liabilities



Settlement balances payable

4,614 - 4,614 5,367 - 5,367
Collateral received

1,725 - 1,725 525 - 525
Deposits and other borrowings 13

145,762 7,520 153,282 140,204 2,441 142,645
Derivative financial instruments 9

- 10,408 10,408 - 11,179 11,179
Debt issuances 14

17,799 - 17,799 17,623 - 17,623
Other financial liabilities

1,033 195 1,228 1,692 372 2,064
Total


170,933 18,123 189,056 165,411 13,992 179,403
1.
Comparative amounts have been adjusted to reflect the classification of certain reverse repurchase agreements included in cash and cash equivalents.
Financial assets and financial liabilities measured at fair value
The fair valuation of financial assets and financial liabilities is generally determined at the individual instrument level.
If the Banking Group holds offsetting risk positions, then the portfolio exception in NZ IFRS 13 Fair Value Measurement (NZ IFRS 13) is used to measure the
fair value of such groups of financial assets and financial liabilities. The Banking Group measures the portfolio based on the price that would be received to
sell a net long position (an asset) for a particular risk exposure, or to transfer a net short position (a liability) for a particular risk exposure.

Fair value designation
The Banking Group designates certain Net loans and advances and Deposits and other borrowings as FVTPL where they are managed on a fair value
basis to align the measurement with how the financial instruments are managed.

Fair value approach and valuation techniques
We use valuation techniques to estimate the fair value of assets and liabilities for recognition, measurement and disclosure purposes where no quoted
price in an active market exists for that asset or liability. This includes the following:
Asset or liability Fair value approach
Financial instruments classified as:
- Derivative financial assets and financial liabilities
(including trading and non-trading)
- Repurchase agreements <90 days
- Net loans and advances
- Deposits and other borrowings
- Debt issuances
Discounted cash flow (DCF) techniques are used whereby contractual future cash flows of the
instrument are discounted using wholesale market interest rates, or market borrowing rates for
debt or loans with similar maturities or yield curves appropriate for the remaining term to
maturity.
Other financial instruments held for trading:
- Securities sold short
Valuation techniques are used that incorporate observable market inputs for financial
instruments with similar credit risk, maturity and yield characteristics.
Financial instruments classified as:
- Trading securities
- Investment securities
Valuation techniques use comparable multiples (such as price-to-book ratios) or DCF
techniques incorporating, to the extent possible, observable inputs from instruments with
similar characteristics.
There were no significant changes to valuation approaches during the current or prior periods.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



48
16. Fair value of financial assets and financial liabilities (continued)
Fair value hierarchy
The Banking Group categorises financial assets and financial liabilities carried at fair value into a fair value hierarchy as required by NZ IFRS 13 based on
the observability of inputs used to measure the fair value:
• Level 1 – valuations based on quoted prices (unadjusted) in active markets for identical assets or liabilities;
• Level 2 – valuations using inputs other than quoted prices included within Level 1 that are observable for a similar asset or liability, either directly or
indirectly; and
• Level 3 – valuations where significant unobservable inputs are used to measure the fair value of the asset or liability.
The following table presents assets and liabilities carried at fair value in accordance with the fair value hierarchy:


Fair value measurements

Quoted price in active
markets (Level 1)
Using observable inputs
(Level 2)
Using unobservable
inputs (Level 3) Total

2025 2024 2025 2024 2025 2024 2025 2024

NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m
Financial assets
Cash and cash equivalents
1
- - 1,626 1,044 - - 1,626 1,044
Trading securities
2
5,169 4,653 1,179 923 - - 6,348 5,576
Derivative financial instruments
2 3 11,445 10,177 2 1 11,449 10,181
Investment securities
2
14,370 12,184 2,082 1,106 6 5 16,458 13,295
Net loans and advances
- - 961 - - - 961 -
Total
19,541 16,840 17,293 13,250 8 6 36,842 30,096
Financial liabilities
Deposits and other borrowings - - 7,520 2,441 - - 7,520 2,441
Derivative financial instruments
43 70 10,365 11,108 - 1 10,408 11,179
Other financial liabilities
195 358 - 14 - - 195 372
Total
238 428 17,885 13,563 - 1 18,123 13,992
1.
Comparative amounts have been adjusted to reflect the classification of certain reverse repurchase agreements included in cash and cash equivalents.
2.
During 2025, NZ$434 million of assets were transferred from Level 1 to Level 2 (2024: no assets were transferred from Level 1 to Level 2) and NZ$127 million of assets were transferred from Level 2 to
Level 1 for the Banking Group (2024: NZ$2,390 million transferred from Level 2 to Level 1) due to a change in the observability of market price and/or valuation inputs. There were no other material
transfers between Level 1, Level 2 and Level 3 during the year. Transfers into and out of levels are measured at the beginning of the reporting period in which the transfer occurred.

Financial assets and financial liabilities not measured at fair value
The financial assets and financial liabilities listed below are measured at amortised cost on the Banking Group’s balance sheet. While this is the value at
which we expect the assets will be realised and the liabilities settled, the Banking Group provides an estimate of the fair value of the financial assets and
financial liabilities at balance date in the table below.
Fair values of financial asset and financial liabilities carried at amortised cost not included in the table below approximate their carrying values. These
financial assets and financial liabilities are either short term in nature or are floating rate instruments that are re-priced to market interest rates on or near
the end of the reporting period.


Categorised into fair value hierarchy
At amortised cost
Quoted price
in active markets
(Level 1)
Using
observable inputs
(Level 2)
Using
unobservable inputs
(Level 3) Total fair value

2025 2024 2025 2024 2025 2024 2025 2024 2025 2024

NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m
Financial assets
Net loans and advances 157,722 151,666 - - 82 69 158,282 151,973 158,364 152,042
Total
157,722 151,666 - - 82 69 158,282 151,973 158,364 152,042
Financial liabilities
Deposits and other
borrowings
145,762 140,204 - - 145,971 140,382 - - 145,971 140,382
Debt issuances
1
17,799 17,623 1,897 1,094 16,162 16,717 - - 18,059 17,811
Total
163,561 157,827 1,897 1,094 162,133 157,099 - - 164,030 158,193
1.
Comparative amounts have been adjusted to be consistent with the current period’s presentation.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



49

16. Fair value of financial assets and financial liabilities (continued)
The following table sets out the Banking Group’s basis of estimating the fair values of financial assets and liabilities carried at amortised cost where the
carrying value is not typically a reasonable approximation of fair value.
Financial asset and liability Fair value approach
Net loans and advances to banks Discounted cash flows using prevailing market rates for loans with similar credit quality.
Net loans and advances to customers Present value of future cash flows, discounted using a curve that incorporates changes in wholesale
market rates, the Banking Group’s cost of wholesale funding and the customer margin, as
appropriate.
Deposit liability without a specified maturity or at
call
The amount payable on demand at the reporting date. We do not adjust the fair value for any value
we expect the Banking Group to derive from retaining the deposit for a future period.
Interest bearing fixed maturity deposits and
other borrowings and acceptances with quoted
market rates
Market borrowing rates of interest for debt with a similar maturity are used to discount contractual
cash flows to derive the fair value.
Debt issuances Calculated based on quoted market prices or observable inputs as applicable. If quoted market
prices are not available, we use a discounted cash flow model using a yield curve appropriate for the
remaining term to maturity of the debt instrument. The fair value reflects adjustments to credit
spreads applicable to the Banking Group for that instrument.



A significant portion of financial instruments are carried on the Balance Sheet at fair value. The Banking Group therefore regularly evaluates the
key valuation assumptions used in the determination of the fair valuation of financial instruments incorporated within the financial statements,
as this can involve a high degree of judgement and estimation in determining the carrying values at the balance sheet date.
In determining the fair valuation of financial instruments, the Banking Group has considered the impact of related economic and market
conditions on fair value measurement assumptions and the appropriateness of valuation inputs in these estimates, notably valuation
adjustments, as well as the impact of these matters on the classification of financial instruments in the fair value hierarchy.
Most of the valuation models the Banking Group uses employ only observable market data as inputs. For certain financial instruments, we may
use data that is not readily observable in current markets. If we use unobservable market data, then we need to exercise more judgement to
determine fair value depending on the significance of the unobservable input to the overall valuation. Generally, we derive unobservable inputs
from other relevant market data and compare them to observed transaction prices where available. When establishing the fair value of a
financial instrument using a valuation technique, the Banking Group also considers any required valuation adjustments in determining the fair
value. We may apply adjustments (such as credit valuation adjustments and funding valuation adjustments – refer to Note 9 Derivative financial
instruments) to reflect the Banking Group’s assessment of factors that market participants would consider in determining fair value of a
particular financial instrument.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



50
17. Offsetting
We offset financial assets and financial liabilities in the balance sheet (in accordance with NZ IAS 32 Financial Instruments: Presentation) when there is:
• a current legally enforceable right to set off the recognised amounts in all circumstances; and
• an intention to settle the asset and liability on a net basis, or to realise the asset and settle the liability simultaneously.
The following table identifies financial assets and financial liabilities which have not been offset but are subject to enforceable master netting agreements
(or similar arrangements) and the related amounts not offset in the Balance Sheet. We have not taken into account the effect of over collateralisation.

Amount subject to master netting agreement or similar

Total amounts
recognised
in the
Balance Sheet
Amounts not
subject to
master netting
agreement or
similar Total
Financial
instruments
5

Financial
collateral
(received)/
pledged
5
Net amount
As at 30 September 2025 NZ$m NZ$m NZ$m NZ$m NZ$m NZ$m
Derivative financial assets
1
11,449 (1,526) 9,923 (8,144) (717) 1,062
Reverse repurchase agreements
2

- at amortised cost 1,361 - 1,361 - (1,361) -
- at FVTPL 1,626 - 1,626 - (1,626) -
Total financial assets 14,436 (1,526) 12,910 (8,144) (3,704) 1,062
Derivative financial liabilities
1
(10,408) 1,076 (9,332) 8,144 434 (754)
Repurchase agreements
3

- at amortised cost (1,165) - (1,165) - 1,165 -
- at FVTPL (3,355) - (3,355) - 3,355 -
Total financial liabilities (14,928) 1,076 (13,852) 8,144 4,954 (754)


As at 30 September 2024

Derivative financial assets
1
10,181 (1,600) 8,581 (8,260) (72) 249
Reverse repurchase agreements
2,4

- at amortised cost 718 - 718 - (718) -
- at FVTPL 1,044 - 1,044 - (1,044) -
Total financial assets 11,943 (1,600) 10,343 (8,260) (1,834) 249
Derivative financial liabilities
1
(11,179) 1,858 (9,321) 8,260 331 (730)
Repurchase agreements
3,4

- at amortised cost (2,728) - (2,728) - 2,728 -
- at FVTPL (1,022) - (1,022) - 1,022 -
Total financial liabilities (14,929) 1,858 (13,071) 8,260 4,081 (730)
1.
Derivative assets and liabilities recognised in the Balance Sheet reflect the impact of certain central clearing collateral arrangements, whereby collateral that qualifies as legal settlement has reduced the
carrying value of those associated derivative balances.
2.
Reverse repurchase agreements:
• with less than 90 days to maturity are presented in the Balance Sheet within Cash and cash equivalents; or
• with 90 days or more to maturity are presented in the Balance Sheet within Net loans and advances.
3.
Repurchase agreements are presented on the Balance Sheet within Deposits and other borrowings.
4.
Comparative amounts have been adjusted to be consistent with the current period’s presentation.
5.
The amount of financial instruments and financial collateral disclosed is limited to the net balance sheet exposure of the relevant financial assets or liabilities, and any over-collateralisation is excluded
from the tables.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



51
18. Goodwill and other intangible assets

2025 2024

NZ$m NZ$m
Goodwill

3,006 3,006
Software

27 19
Management rights

67 69
Goodwill and other intangible assets

3,100 3,094

Goodwill and other intangible assets allocated to cash-generating units (CGUs)
Goodwill arose on the acquisition of the NBNZ Holdings Limited group on 1 December 2003, and the carrying amount reflects amortisation recognised
before the application of NZ IFRS from 1 October 2004 and subsequent business disposals. Funds management rights, assessed as having indefinite
useful lives, arose on the acquisition of the ING Holdings (NZ) Limited (now ANZ New Zealand Investments Holdings Limited) group on 30 November 2009.
Goodwill and funds management rights are allocated to CGUs as follows:

Goodwill Management rights

2025 2024 2025 2024
Cash generating unit

NZ$m NZ$m NZ$m NZ$m
Personal 980 980 - -
Funds Management

62 62 67 69
Personal segment

1,042 1,042 67 69
Business & Agri

695 695 - -
Institutional

1,269 1,269 - -
Total

3,006 3,006 67 69

Goodwill was assessed for indicators of impairment as at 30 September 2025, taking into account the results of the February 2025 impairment test and
associated sensitivity and scenario analysis performed and the forecast impact of recent economic events. There were no indicators of impairment
therefore, in accordance with NZ IAS 36 Impairment of Assets, no further impairment test was required.
The following information is for the annual goodwill impairment test, and reflects the CGUs and goodwill allocations as at 28 February 2025.
Annual goodwill impairment test
The annual impairment test is performed as at the end of February each year. Goodwill is considered to be impaired if the carrying amount of the relevant
CGU exceeds its recoverable amount. The recoverable amount of a CGU is the higher of its fair value less costs of disposal (FVLCOD) and its value-in-use
(VIU). We use a VIU approach to estimate the recoverable amount of the CGU to which each goodwill component is allocated. Based on this assessment
no impairment was identified for any CGU, and therefore a FVLCOD calculation was not required.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



52
18. Goodwill and other intangible assets (continued)
Value-in-use
These calculations use cash flow projections based on a number of financial budgets within each CGU covering an initial forecast period. These
projections also incorporate economic assumptions including GDP, inflation, unemployment, residential and commercial property prices, and the
implementation of RBNZ’s increased capital requirements. Cash flows beyond the forecast period are extrapolated using the terminal growth rate. These
cash flow projections are discounted using a discount rate derived using a capital asset pricing model.
Future changes in the assumptions upon which the calculation is based may materially impact this assessment, resulting in the potential impairment of
part or all of the goodwill balances.
Values applied in 28 February 2025 impairment test
Forecast period and projections To 30 September 2028 – a forecast period was used to cover the implementation of RBNZ’s increased
capital requirements over the transition period ending on 1 July 2028.
Revenue growth over forecast
period
Comprises impacts of net interest margin and volume growth, arising from planned responses to known
regulatory and economic forecasts. Average annual forecast revenue growth rates are shown below.
Credit impairment over forecast
period
Varies by CGU, based on ECL modelling for 2025 and 2026, before returning to long run experience levels for
2027 to 2028. Long run experience levels are based on the Banking Group’s bad debts written off, net of
recoveries, since 2004 of 0.13% of gross loans and advances. Credit impairment for each CGU as a
percentage of forecast gross loans and advances for 2027 to 2028 is shown below.
Terminal growth rate 2.0% - based on 2026 forecast inflation from RBNZ’s February 2025 Monetary Policy Statement.
Discount rate
Post tax: 11.1% (February 2024: 11.7%).
The main variables in the calculation of the discount rate used are the risk free rate, beta and the market risk
premium. The risk-free rate was the average traded 10-year New Zealand government bond yield as at 28
February 2025 of 4.6%. The market risk premium was estimated using observed historic rates of return for
the New Zealand stock exchange and 10-year government bonds. Beta was consistent with observable
measures applied in the regional banking sector.
The values of the average revenue growth, credit impairment as a percentage of forecast gross loans and advances, and pre-tax discount rates
assumptions by CGU are shown in the table below. The implied pre-tax discount rates are significantly higher than the post-tax discount rate above
because regulatory capital retention over the forecast period is not tax effected.

Revenue growth Credit impairment Pre-tax discount rate
Cash generating unit

28 Feb 25 29 Feb 24 28 Feb 25 29 Feb 24 28 Feb 25 29 Feb 24
Personal

3.6% 4.6% 0.02% 0.04% 29.0% 25.3%
Funds Management

1.4% 4.4% n/a n/a 26.5% 23.5%
Business & Agri

2.4% 2.8% 0.12% 0.11% 29.8% 25.4%
Institutional

1.6% 1.8% 0.05% 0.12% 29.4% 25.5%
We performed stress tests for key sensitivities in each CGU. For Institutional, a 140 basis point decrease in the average annual growth over the forecast
period to 0.2% would be required to reduce the CGU's recoverable amount to nil. A change, considered to be reasonably possible by management, in key
assumptions would not cause the carrying amounts of any CGU to exceed its recoverable amount.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



53

18. Goodwill and other intangible assets (continued)



The table below details how we recognise and measure different intangible assets:


Goodwill Software Other Intangibles
Definition




Excess amount the Banking
Group has paid in acquiring a
business over the fair value of
the identifiable assets and
liabilities acquired.
Purchased software owned by the Banking
Group is capitalised.
Internal and external costs incurred in
building software and computer systems
costing greater than NZ$20 million are
capitalised as assets. Those less than
NZ$20 million are expensed in the year in
which the costs are incurred.
Costs incurred in planning or evaluating
software proposals or in maintaining
systems after implementation are
not capitalised.
Management fee rights arising
from acquisition of funds
management business.
Carrying value


Cost less any accumulated
impairment losses.
Allocated to the CGU to which
the acquisition relates.
Initially, measured at cost or if acquired in a
business combination at the acquisition
date, fair value.
Subsequently, carried at cost less
accumulated amortisation and impairment
losses.
Initially, measured at fair value at
acquisition.
Subsequently, carried at cost less
accumulated impairment losses.
Useful life


Indefinite.
Goodwill is reviewed for
impairment at least annually or
when there is an indication of
impairment.
Except for major core infrastructure,
amortised over periods between
2-5 years; however major core infrastructure
may be amortised over 7 years subject to
approval by the Audit Committee.
Purchased software is amortised over 2
years unless it is considered integral to other
assets with a longer useful life.
Management fee rights with an
indefinite life are reviewed for
impairment at least annually or
when there is an indication of
impairment.
Amortisation
method
Not applicable. Straight-line method. Not applicable.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



54


18. Goodwill and other intangible assets (continued)

Management judgement is used to assess the recoverable value of goodwill and other intangible assets, and the useful economic life of an
asset, or whether an asset has an indefinite life. We reassess the recoverability of the carrying value at each reporting date.
Goodwill
A number of key judgements are required in the determination of whether or not a goodwill balance is impaired including:
• the level at which goodwill is allocated – consistent with prior periods the CGUs to which goodwill is allocated are the Banking Group’s
revenue generating segments that benefit from relevant historical business combinations generating goodwill.
• determination of the carrying amount of each CGU which includes an allocation, on a reasonable and consistent basis, of corporate assets
and liabilities that are not directly attributable to the CGUs to which goodwill is allocated.
• assessment of the recoverable amount of each CGU used to determine whether the carrying amount of goodwill is supported and is based
on judgements including the selection of the model and key assumptions used to calculate the recoverable amount.
Software and other intangible assets
At each reporting date, software and other intangible assets are assessed for indicators of impairment and, where such indicators are
identified, an impairment test is performed. In the event that an asset’s carrying amount is determined to be greater than its recoverable
amount, the carrying amount of the asset is written down immediately. Those assets not yet ready for use are tested for impairment annually.
In addition, the expected useful lives of intangible assets are assessed at each reporting date. The assessment requires management
judgement, and in relation to our software assets, a number of factors can influence the expected useful lives. These factors include changes
to business strategy, significant divestments and the pace of technological change.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



55



19. Other provisions


2025 2024



NZ$m NZ$m
ECL allowance on undrawn and contingent facilities
1


134 136
Customer remediation

39 24
Restructuring costs

15 8
Leasehold make good

21 22
Other

16 22
Total other provisions

225 212
1.
Refer to Note 12 Allowance for expected credit losses for movement analysis.


Customer Restructuring Leasehold


remediation costs make good Other




NZ$m NZ$m NZ$m NZ$m
Balance at 1 October 2024

24 8 22 22
New and increased provisions made during the year

27 15 1 5
Provisions used during the year

(12) (8) (1) (7)
Unused amounts reversed during the year

- - (1) (4)
Balance at 30 September 2025

39 15 21 16
Customer remediation
Customer remediation includes provisions for expected refunds to customers and other counterparties, and related customer, counterparty and regulatory
claims, penalties and litigation costs and outcomes.
Restructuring costs
Provisions for restructuring costs arise from activities related to material changes in the scope of business undertaken by the Banking Group or the
manner in which that business is undertaken and include employee termination benefits. Costs relating to on-going activities are not provided for and are
expensed as incurred.
Leasehold make good
Provisions associated with leased premises where, at the end of a lease, the Banking Group is required to remove any fixtures and fittings installed in the
leased property. This obligation arises immediately upon installation. Estimated make good costs are added to the right of use asset (within premises and
equipment) upon installation and amortised over the lease term.
Other
Other provisions comprise various other provisions including losses arising from other legal action, operational issues, and warranties and indemnities
provided in connection with various disposals of businesses and assets.

The Banking Group recognises provisions when there is a present obligation arising from a past event, an outflow of economic resources is
probable, and the amount of the provision can be measured reliably.
The amount recognised is the best estimate of the consideration required to settle the present obligation at the reporting date, taking into
account the risks and uncertainties surrounding the timing and amount of the obligation. Where a provision is measured using the estimated
cash flows required to settle the present obligation, its carrying amount is the present value of those cash flows
.



The Banking Group holds provisions for various obligations including customer remediation, restructuring costs, leasehold make good and
litigation related claims. These provisions involve judgements regarding the timing and outcome of future events, including estimates of
expenditure required to satisfy such obligations. Where relevant, expert legal advice has been obtained and, in light of such advice, provisions
and/or disclosures as deemed appropriate have been made.
In relation to customer remediation, determining the amount of the provisions, which represent management’s best estimate of the cost of
settling the identified matters, requires the exercise of significant judgement. It will often be necessary to form a view on a number of different
assumptions, including the number of impacted customers, the average refund per customer, and the implications of regulatory exposures and
customer claims having regard to their specific facts and circumstances. There is a heightened level of estimation uncertainty where the
customer remediation provision relates to a legal proceeding or matter. The appropriateness of the underlying assumptions is reviewed on a
regular basis against actual experience and other relevant evidence including expert legal advice, and adjustments are made to the provisions
where appropriate.

ANZ Bank New Zealand Limited Notes to the consolidated financial statements



56
20. Shareholders' equity
Shareholders’ equity

2025 2024

NZ$m NZ$m
Share capital


17,680 17,680
Reserves



FVOCI reserve


(11) (28)
Cash flow hedge reserve


140 52
Total reserves


129 24
Retained earnings


2,089 1,106
Total shareholders' equity


19,898 18,810

Share capital
The table below details the movement in shares and share capital for the period.
2025 2024
Number of shares NZ$m Number of shares NZ$m
Ordinary shares
Balance at start of year 10,745,755,498 15,988 6,345,755,498 11,588
Ordinary shares issued during the year - - 4,400,000,000 4,400
Total ordinary shares at end of year 10,745,755,498 15,988 10,745,755,498 15,988
Perpetual preference shares
Balance at start of year 1,691,720,000 1,692 850,000,000 850
Perpetual preference shares issued during the year - - 1,141,720,000 1,142
Perpetual preference shares redeemed during the year - - (300,000,000) (300)
Total perpetual preference shares at end of year 1,691,720,000 1,692 1,691,720,000 1,692
Total share capital 12,437,475,498 17,680 12,437,475,498 17,680
Perpetual preference shares
Perpetual preference shares (PPS) do not carry any voting rights. They are classified as equity instruments as there is no contractual obligation for the
Bank to either deliver cash or another financial instrument or to exchange financial instruments on a potentially unfavourable basis.
In the event of liquidation, holders of PPS are entitled to an amount equal to the issue price of the PPS. Holders of PPS rank behind the claims of all
depositors and other creditors of the Bank (other than creditors that rank equally with the PPS), equally with the rights of other holders of PPS, ANZ NZ ICN
and other equal ranking securities and obligations, and in priority to the rights of holders of ordinary shares.
Holders of PPS are entitled to receive dividends that are discretionary, non-cumulative and subject to conditions. If a PPS dividend is not paid, there are
certain restrictions on the ability of the Bank to pay a dividend on its ordinary shares. Holders of the PPS have no other rights to participate in the profits or
property of the Bank.
Holders of PPS have no right to require that the PPS be redeemed.
The Bank has three classes of PPS: PPS issued in 2022 and 2024 that are quoted on the NZX Debt Market (Quoted PPS), and PPS issued to the
Immediate Parent Company in 2024 (2024 PPS).
PPS qualify as AT1 capital for RBNZ’s capital adequacy purposes.
The key terms of the PPS are as follows:


2022 Quoted PPS 2024 Quoted PPS 2024 PPS
Issue date 18 July 2022 19 March 2024 18 September 2024
Issue amount NZ$550 million NZ$275 million NZ$867 million
First optional redemption date 18 July 2028 19 March 2030 18 October 2030
Final maturity date Perpetual Perpetual Perpetual
Dividend amount
6.95% per annum until 18 July 2028
(after which it changes to a floating
rate equal to the New Zealand 3-
month bank bill rate plus 3.25%),
multiplied by one minus the New
Zealand company tax rate (where the
PPS dividend is fully imputed).

7.60% per annum until 19 March
2030 (after which it changes to a
floating rate equal to the New Zealand
3- month bank bill rate plus 3.25%),
multiplied by one minus the New
Zealand company tax rate (where the
PPS dividend is fully imputed).
Floating rate equal to the New
Zealand 3-month bank bill rate plus
3.03%.
As at 30 September 2025, the Quoted PPS carried a BBB+ credit rating from S&P Global Ratings.
The Bank may, at its option, redeem a class of PPS on an optional redemption date (being each scheduled quarterly dividend payment date from and
including the first optional redemption date), or at any time following the occurrence of a tax event or regulatory event, subject to prior written approval of
RBNZ and certain other conditions being met.