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Institutional
Division

Shayne Elliott,
Chief Executive Officer, Institutional

L–R: Paul Finn (ANZ), Damian Bell (ANZ) and Seth Munday (ANZ)
ANZ team inspects the construction of the Theun Hinboun Expansion Project in Eastern Laos.

Institutional Division

Case Study

Supporting our energy needs

We recognise the importance of supporting the evolution of the growing renewables sector and of encouraging innovation in the transition to a lower carbon future.

Insight is essential in ensuring we progress in a sustainable way. In this respect, the partnership between ANZ Institutional and World Wildlife Fund Australia is another way of increasing awareness of environmental sustainability issues impacting our clients, as well as the sectors and geographies in which we operate.

Renewable energy projects currently represent approximately a third of our project finance power portfolio. Our energy Policy commits us to increasing the gas and renewables proportion of our project finance power portfolio by 15–20% by 2020.

Since 2002, we have supported the global wind sector, with a wind project finance portfolio accounting for approximately 1,451mW of energy, across 13 unique projects.

We are now also the leading Australian bank in the trading of Renewable Energy Certificates, having traded more than $2b in the sector in the last financial year.

Our involvement in the sector also extends to supporting projects involving landfill gas, hydro, solar and geothermal power stations.

BUSINESS PROFILE

Institutional provides global financial services to government, corporate and institutional clients. We are focussed on providing solutions for clients with complex financial needs, based on a deep understanding of their businesses and industries, with particular expertise in natural resources, agriculture, and infrastructure. We offer specialist products and services within Transaction Banking, Global Loans and Global Markets in Australia, New Zealand, Asia Pacific, Europe and America.

BUSINESS HIGHLIGHTS

  • Underlying profit up 7% to a record $1.9b, despite a difficult trading and economic environment.
  • Customer revenues up 7% globally, with Asia revenues up 38%. Customer revenues in the priority sectors of resources, agribusiness and infrastructure grew 19%.
  • Within priority products, FX and Commodities up 28%, Payments and Cash Management up 13% and Trade up 29%.
  • Investment continued in core banking platforms such as cash management. More than 7,000 customers migrated onto the Transactive online banking platform.
  • Global Markets has developed new product capability and customer channels, delivering growth in customer sales. Markets' sales up 13% and now account for 65% of overall Markets' revenue.
  • Expenses up 14%, reflecting focussed investment to support strategic priorities.
  • We are self-funding, with customer deposits now exceeding net loans and advances by $26b.
  • The provision charge decreased 65% reflecting improvements in credit quality, as well as the credit cycle.
  • Achieved outright lead bank status in both Australia and New Zealand in the Peter Lee Associates 2011 survey of large corporate and institutional banking clients1.
  • Ranked No 1 in Australia and New Zealand capital markets2 and moved to first overall ranking in the 2011 (1H) Thomson Reuters Asia Pacific (ex Japan) Mandated Loan Arranger League Table.

PERFORMANCE TABLES

FINANCIAL PERFORMANCE# ($M) 2011 2010 Movt %
Operating income 4,906 4,947 -1%
Operating expenses (2,001) (1,748) 14%
Profit before credit impairment
and income tax		 2,905 3,199 -9%
Provision for credit impairment (258) (741) -65%
Profit before income tax 2,647 2,458 8%
Income tax expense and
non-controlling interest		 (752) (680) 11%
Profit after tax 1,895 1,778 7%
Total assets 237,676 185,021 28%
Contribution to group earnings 34% 35%  
# Underlying profit is adjusted for non-core items that are not part of the normal ongoing operations of the Group including one-off gains and losses, non-continuing businesses, timing differences on economic hedges and acquisition related costs.
NON-FINANCIAL PERFORMANCE 2011 2010
Relationship Strength Index ranking1    
» Australia > 1 > (equal) 1
» New Zealand > 1 > 1
Total employees (FTE)* 6,448 6,180
Employee engagement 70% 66%
Total women in management3 30% 31.4%
* Underlying. 1. According to the Peter Lee Associates Large Corporate and Institutional Relationship Banking Survey 2011. 2. According to Bloomberg league tables. 3. Women in management is calculated using headcount of active employees and includes staff working for and being paid by ANZ. FTE also captures staff on special leave including leave without pay, parental leave and long-term sick leave.