Press Release

DBRS Morningstar Confirms ANZ’s Long-Term Issuer Rating at AA, Stable Trend

Banking Organizations
November 24, 2022

DBRS Ratings Limited (DBRS Morningstar) confirmed the ratings of Australia and New Zealand Banking Group Limited (ANZ or the Group), including the Long-Term Issuer Rating at AA and the Short-Term Issuer Rating at R-1 (high). The trend on all ratings is Stable. The Intrinsic Assessment (IA) of the Group is AA (low) and the Support Assessment is SA2, which reflects the generally supportive regulatory framework and DBRS Morningstar’s expectation of timely systemic support, given ANZ’s importance to the financial system in Australia. This results in a one notch uplift to the Issuer Rating from the IA. See a full list of ratings at the end of this press release.


The confirmation of the ratings reflects ANZ’s strong diversified franchises in its home markets of Australia and New Zealand, its solid earnings generation, robust asset quality supported by a low level of impaired loans and good progress in addressing past operational risks deficiencies. However, the ratings continue to reflect that that the Group, similar to its domestic peers, makes extensive usage of wholesale funding which accounted for 29% of total funding at end-FY22. The confirmation of the ratings also takes into account that the acquisition of Suncorp Bank, although a significant transaction in terms of execution risk, should help strengthen the Group’s retail franchise position in Australia and is manageable from a capital perspective after the capital raised completed in FY22.


An upgrade of the ratings would require further strengthening of its position in its core markets along with stronger earnings generation and lower wholesale funding reliance.

A downgrade of the ratings could occur if there is a prolonged material deterioration in profitability and asset quality. Furthermore, a downgrade of the long-term ratings would occur if, in DBRS Morningstar’s opinion, the likelihood of timely systemic support were reduced.


Franchise Combined Building Block (BB) Assessment: Very Strong/Strong
ANZ is one of the leading Australian banking groups, with total assets of AUD 1,085.6 billion at end-September 2022 (FY22). The Group has a strong franchise in home loans, with a market share of 13.0% in Australia and 30.5% in New Zealand and is one the most diversified Australian banks by business lines. In June 2022, ANZ announced the agreement to purchase 100% of the shares in SBGH Limited, the holding company of Suncorp Bank, the 6th largest bank in Australia. DBRS Morningstar views this is a meaningful acquisition as it will increase ANZ’s gross loans by 17% and customer deposits by 22%. The transaction is expected to be completed in the second half of FY23 pending regulatory approval. DBRS Morningstar considers that Suncorp should reinforce the Group’s domestic market positions in retail banking and provide some cost synergies. To support the acquisition, ANZ raised AUD 3.5 billion of equity (+ 84 bps on CET1) which would largely offset the negative impact of the acquisition upon completion (- 110 bps on CET1), which is expected for the second half of FY23.

Earnings Combined Building Block (BB) Assessment: Strong/Good
DBRS Morningstar considers ANZ has demonstrated sound earnings generation supported by its strong market positions in its core markets of Australia and New Zealand. On a statutory basis, the Group reported net attributable profit of AUD 7,138 million in FY22, up 16% YoY. The improved FY22 results were driven by revenue growth in the Australian commercial division and the New Zealand business, loan impairment releases and some-one off gains on completion of the ANZ Worldline partnership of AUD 307 million. In FY22, ANZ reported a return on equity (ROE), on cash profit and continuing operations basis, of 10.4%, up 47 basis points from FY21. In FY22, ANZ reported loan loss releases of AUD 232 million compared to releases of AUD 567 million in FY21. The loan loss releases in FY22 were driven by lower credit risk and a release of pandemic related management overlays but were partly offset by an increase in provisions to account for the challenging global economic outlook. Strong revenue growth in FY22 supported ANZ’s solid cost-income ratio of 49% in FY22, despite high investment costs and headwinds from wage and inflation pressures.

Risk Combined Building Block (BB) Assessment: Very Strong/Strong
We consider ANZ to have a generally conservative credit risk profile and sound asset quality. ANZ’s asset quality remains sound with low levels of impaired loans. ANZ’s Stage 3 loans were down 18% YoY to AUD 4,371 million at end-FY22, largely reflecting the repayment of some single name exposures in Australian Commercial and Institutional. The Stage 3 loans accounted for only 0.65% of total gross loans at end-FY22, down from 0.84% the year before. ANZ’s commercial real estate (CRE) portfolio totalled AUD 50.8 billion in FY22 and represented 7.6% of total gross lending activities and has remained relatively stable over the years.

Funding and Liquidity Combined Building Block (BB) Assessment: Strong/Good
ANZ' s funding profile is underpinned by its sound customer deposit base in its home markets of Australia and New Zealand as well as good access to the markets for funding. DBRS Morningstar considers ANZ’s funding profile has improved in recent years, supported by strong growth in customer deposits and the Group’s net loan-to deposit ratio (incl. certificates of deposits) remained broadly stable YoY at 103% at end-FY22 from 114% at end-FY18, as per DBRS Morningstar calculations. However, the Group has a significant proportion of wholesale funding representing around 29% of total non-equity funding at end-FY22, which is higher compared to some domestic peers and for most international peers. ANZ’s liquidity position is sound as reflected in the Group's Liquidity Coverage Ratio (LCR) ratio of 129% at end-FY22 and a Net Stable Funding Ratio (NSFR) ratio of 119% at end-September 2022.

Capitalisation Combined Building Block (BB) Assessment: Strong
DBRS Morningstar considers ANZ’s capital position to be strong, supported by consistent strong capital generation and good access to capital markets. At end-FY22, ANZ’s APRA CET1 ratio was 12.29%, broadly stable from FY21 and despite the capital raise completed to support the Suncorp acquisition, largely reflecting higher risk weighted assets from interest rate risk in the banking book and lending growth. ANZ’s CET1 ratio is well above APRA’s “unquestionably strong benchmark” of 10.5% and the upcoming minimum regulatory requirement of 10.25%. On an “internationally comparable” basis, ANZ’s CET1 ratio was a strong 19.2% at end-FY22.

Further details on the Scorecard Indicators and Building Block Assessments can be found at


Governance (G) Factors
The subfactor ‘corporate governance’ is relevant to the rating of ANZ but does not affect the overall rating or trend assigned to the bank. This is reflected in the Risk grid building block. DBRS Morningstar considers that ANZ continues to make progress in addressing the governance and accountability shortcomings flagged by APRA and the Royal Commission in 2018 and 2019. However, we note that ANZ still needs to complete the action plan set out by APRA and note that the capital-add on of AUD 500 million imposed by APRA in 2018 remains in place.

There were no Environmental or Social factors that had a significant or relevant effect on the credit analysis.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at (May 17, 2022)


All figures are in AUD unless otherwise noted.

The principal methodology is the Global Methodology for Rating Banks and Banking Organisations (June 23, 2022). In addition DBRS Morningstar uses the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings, (May 17, 2022) in its consideration of ESG factors.

The sources of information used for this rating include Morningstar Inc. and Company Documents, ANZ 2022 Annual Report, ANZ Full Year 30 September 2022 Consolidated Financial Report Dividend Announcement and Appendix 4E, ANZ 2022 Results Presentation & Investor Discussion Pack, ANZ 2022 ESG Supplement, ANZ 2022 Corporate Governance Statement. DBRS Morningstar considers the information available to it for the purposes of providing this rating to be of satisfactory quality.

With respect to FCA and ESMA regulations in the United Kingdom and European Union, respectively, this is an unsolicited credit rating. This credit rating was not initiated at the request of the issuer.

With Rated Entity or Related Third-Party Participation: YES
With Access to Internal Documents: NO
With Access to Management: NO

DBRS Morningstar does not audit the information it receives in connection with the rating process, and it does not and cannot independently verify that information in every instance.

The conditions that lead to the assignment of a Negative or Positive trend are generally resolved within a 12-month period. DBRS Morningstar's outlooks and ratings are under regular surveillance.

For further information on DBRS Morningstar historical default rates published by the European Securities and Markets Authority (ESMA) in a central repository, see: DBRS Morningstar understands further information on DBRS Morningstar historical default rates may be published by the Financial Conduct Authority (FCA) on its webpage:

The sensitivity analysis of the relevant key rating assumptions can be found at:

This rating is endorsed by DBRS Ratings GmbH for use in the European Union.

Lead Analyst: Maria Rivas, Senior Vice President, Global FIG
Rating Committee Chair: Elisabeth Rudman, Managing Director, Head of Global FIG
Initial Rating Date: 25/01/2005
Last Rating Date: 29/11/2021

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