ANZ has delivered another good performance[1]  in 2012 through a consistent focus on delivering our super regional strategy by strengthening our domestic businesses in Australia, New Zealand and the Pacific while driving significant growth in Asia.

Revenue grew 5% with market share gains across key segments and geographies. We continued to invest in our strategy and future growth with costs up by 4%, but at the same time we increased our focus on productivity which saw cost growth trend lower during the year.

Our focus on costs resulted in significant change across ANZ which impacted many of our staff and so I am pleased to report that employee engagement remained steady at 70%. Our aim remains to reach global best-in-class standards through a bank-wide commitment to customer service and to ensuring ANZ is a great place to work.

Divisional Performance

In the Australia Division we produced a solid result with profit up 4% benefiting from market share gains, tighter management of margins and a strong productivity focus. Retail lending grew 7% while average deposits grew at 12%. Commercial also performed well, with average growth in customer numbers and continued leverage of our regional capabilities.

Profit grew 3% in the International and Institutional Banking Division. The division continues to grow and diversify its earnings by geography, product and customer with 43% of revenue and 54% of deposits now derived from outside Australia and New Zealand. This includes significant growth in many of our priority segments based on the connectivity of our international network, although this was offset by softer demand for loans and significant margin contraction in Australia.

New Zealand delivered a good performance with profit up 12%. Business simplification showed benefits with improved financial results based on productivity improvements and market share growth in key segments. We also announced we would move to one brand in New Zealand – the ANZ brand, and in late October 2012 we reached a significant milestone when we moved to a single technology platform.

Profit from the newly-formed Global Wealth and Private Banking Division was flat, in line with market conditions, however we saw improving performance trends during the year, particularly in insurance and investment earnings, and through productivity gains.

Credit quality was stable with ANZ’s provision charge of $1.25 billion broadly in line with 2011 and the Group’s provision coverage remains strong.

Our Strategy and the Environment for Banking

While ANZ delivered a good performance in 2012, just as important has been our strategic progress.

Five years ago, we articulated an ambition to create value for our shareholders, our customers and the wider community by becoming a super regional bank – a bank of global quality with regional focus. This included an aspiration to source 20% of our revenues from outside Australia and New Zealand.

I am pleased to report, despite having endured the global financial crisis, our network in Asia Pacific, Europe and America contributed 21% of Group revenue in 2012.

To deliver this outcome, the scale of transformation over the past five years has been significant, involving a systematic and coordinated program of action in every area of the bank. In this Shareholder Review we have provided a progress report on our strategy showing how we have strengthened ANZ in our key domestic markets in Australia and New Zealand while building a much bigger business in the growth markets of Asia Pacific.

While we have made significant progress, the journey is not over. We have set new aspirations which will see further growth, particularly in Asia, while also adapting the bank to the post‑financial-crisis world.

We believe the lower growth business environment that we have seen following the financial crisis will be with us for the foreseeable future. We have been actively responding to these fast-changing and challenging conditions in different markets by driving both growth and productivity.

Our 2012 results highlight that after five years, ANZ’s super regional strategy has growing momentum. ANZ has moved from being a largely domestic bank to an integrated and growing, regionally focused international bank that is increasingly delivering differentiated value and performance.