Responsible Lending in Resources and Energy Generation
ANZ is one of the leading banks supporting the Australian natural resources sector – a significant contributor to economic growth.
While our economy and communities continue to benefit from the success of the sector, particularly mining, we are mindful of the potential impacts some businesses can have on local communities and the environment. We have put in place clear governance structures, policies and staff training to help balance and guide our decisions.
For example, we recognise the importance of transitioning to a lower-carbon future, but that this will take significant capital investment and time.
Secure and reliable energy supplies remain critical to the strength of our economy where 80% of Australians rely on electricity generated from coal-fired power stations to run their households and businesses.
Our approach is to support our clients committed to managing their impacts responsibly while helping them plan for their future, including a likely price on carbon emissions.
We are a leading renewable energy financier, providing support to generate 1,145MW of wind power, as well as landfill gas, waste coal seam methane, hydro and geothermal power stations.
These renewable energy projects represent around a third of our project finance power portfolio and the proportion of lower-carbon energy projects continues to grow significantly, as demand increases.
We have also applied the Equator Principles, a set of voluntary social and environmental standards, to all Project Finance decisions since 2008.
Business Profile
Institutional provides global financial services to government, corporate and institutional clients. We are focused on providing solutions for clients with complex financial needs, based on a deep understanding of our clients’ businesses and industries, in particular natural resources, agriculture, infrastructure and property.
We deliver transaction banking, specialised and relationship lending and markets solutions in Australia, New Zealand, Asia Pacific, Europe and America.
Business Highlights
- Underlying profit up 23%.
- Record revenue growth despite currency headwinds. Strong customer revenue up 9% reflecting growth in client numbers and the strength of client relationships.
- Specialised and Relationship Lending revenue up 15%, driven by improved margins; Transaction Banking revenue up 9%, from strong deposit growth, particularly in Asia, and improved margins. Global Markets, revenue while down on the unusually strong performance in 2009, recorded circa 22% compound annualised growth on 2008.
- Provision charge decreased 48% reflecting an improvement in the economic environment and disciplined risk management.
- Asia Pacific, Europe and America revenue increased 7%.
- ANZ is number one in Australia and New Zealand capital markets1. ANZ raised more debt capital in Asia for Australian and New Zealand corporate borrowers than any other bank. ANZ moved to number 5 in bond issuance in Asia Pacific (ex-Japan)1. ANZ moved to third overall ranking in the 1H 2010 Thomson Reuters Asia-Pacific (ex-Japan) Loan Arranger League Table.
- Australia ANZ ranked first, or equal first, on 14 of 26 qualitative relationship categories in the Peter Lee Associates survey of corporate and institutional clients. Ranked No.1 in ‘overall penetration’ (domestic plus offshore), reflecting strength and quality of client relationships. In New Zealand, ANZ is ranked first on overall satisfaction, relationship strength and penetration and performed very strongly, ranking first across a further 17 measures.
- Increased financing of renewables to around 30% of our Project Finance energy portfolio.
- Further integrated clear policies, assessment tools and escalation procedures to actively manage social and environmental risks and opportunities in our lending decisions.
1. According to Bloomberg League Tables
Performance Tables
| Financial performance# ($m) | 2010 | 2009 | Movt% |
|---|---|---|---|
| Operating income | 4,865 | 4,965 | -2% |
| Operating expenses | (1,706) | (1,555) | 10% |
| Profit before credit impairment and income tax | 3,159 | 3,419 | -7% |
| Provision for credit impairment | (740) | (1,410) | 48% |
| Profit before income tax | 2,419 | 2,000 | 21% |
| Income tax expenses and non-controlling interests | (665) | (570) | 17% |
| Profit after tax | 1,754 | 1,430 | 23% |
| Total assets | 183,501 | 185,082 | -1% |
| % Contribution to group earnings | 35% | 38% | -3% |
| Non-Financial performance | 2010 | 2009 | Movt |
|---|---|---|---|
| Relationship Strength Index1 ranking | |||
| – Australia | (equal) 1 | 2 | ↑ |
| – New Zealand | 1 | 3 | |
| Total Employees (FTE) | 6,044 | 4,963 | ↑ |
| Employee Engagement (%) | 66 | 64 | ↑ |
| Total Women in Management2 (%) | 31.4 | N/A3 | N/A |