Australian Housing Dynamics and Affordability

MARGIN ENVIRONMENT LOW RATE ENVIRONMENT SWITCHING FROM INTEREST ONLY TO PRINCIPAL & INTEREST Sep-19 $b Sensitivity to a 25bps drop in AUD, NZD and USD interest rates Deposits & earnings on capital 23 24 20 ~3 bps 8 10 16 6 11 $b 7 ~110 13 16 6 14 FY17 FY18 FY19 FY20 FY21 FY22 FY23+ Early conversions Contractual conversions Contractual (still to convert) BILLS/OIS SPREAD 1H19 average 48 bps ~53 % 2H19 average 27 bps 10 bps mvmt. in BBSW/OIS 1 bp NIM 75 60 45 30 15 X 0 Low rate deposits <25bps Capital (excluding intangibles) and other non interest bearing liabilities Oct- 17 Jan- Apr- 18 18 Jul- 18 Oct- 18 Jan- 19 Apr- 19 Jan- Sep- 19 19 Spot 3mth Bills/OIS Spread Rolling 90 days ANZ 49

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