Convertible preference shares

A. CPS1 are fully paid preference shares issued by ANZ pursuant to a prospectus dated 4 September 2008 (CPS1 Prospectus), which will mandatorily convert into Ordinary Shares on 16 June 2014 (subject to certain conditions being satisfied). However ANZ may elect for a third party to purchase the CPS1 rather than delivering the Ordinary Shares issued on Conversion to the investor. CPS1 provides investors with Dividends that are preferred, non-cumulative, based on a floating rate and are expected to be fully or substantially franked. Dividends are scheduled to be paid quarterly in arrears on the Dividend Payment Dates, subject to the Payment Tests. You should read the CPS1 Prospectus (PDF 736kB) for a full description of CPS1.

A. CPS1 Holders will receive Ordinary Shares on Conversion of the CPS1 on the earliest Mandatory Conversion Date unless the Mandatory Conversion Conditions are not satisfied or Resale occurs. Upon Conversion, CPS1 Holders will receive approximately $102.56 worth of Ordinary Shares per CPS1 based on the VWAP of Ordinary Shares during the 20 Business Days before the Mandatory Conversion Date.

For more information on the Mandatory Conversion you should read the CPS1 Prospectus (PDF 736kB).

A. The Mandatory Conversion Date will be 16 June 2014 provided that all of the Mandatory Conversion Conditions are satisfied. If any of the Mandatory Conversion Conditions are not satisfied with respect to 16 June 2014, then the Mandatory Conversion Date will be deferred until the next Dividend Payment Date on which all of the Mandatory Conversion Conditions are satisfied.

For more information on Mandatory Conversion Date you should read the CPS1 Prospectus (PDF 736kB).

A. Before a possible Mandatory Conversion Date, ANZ may choose to arrange that all CPS1 on issue be acquired from CPS1 Holders by a third party (Nominated Purchaser) on the possible Mandatory Conversion Date. This process is called Resale. Resale can occur whether or not the Mandatory Conversion Conditions are satisfied.

If Resale is chosen by ANZ, CPS1 Holders will be notified and on the possible Mandatory Conversion Date they will receive $100 from the Nominated Purchaser for each CPS1 rather than a variable number of Ordinary Shares issued by ANZ.

For more information on Resale you should read the CPS1 Prospectus (PDF 736kB).

A. The Mandatory Conversion Conditions are:

• First Mandatory Conversion Condition: the VWAP of Ordinary Shares on the 25th Business Day before but not including a possible Mandatory Conversion Date is greater than 56% of the Issue Date VWAP.
• Second Mandatory Conversion Condition: the VWAP of Ordinary Shares during the period of 20 Business Days before (but not including) a possible Mandatory Conversion Date is greater than 51.28% of the Issue Date VWAP.
• Third Mandatory Conversion Condition: Ordinary Shares remain listed and admitted to trading on ASX, and trading of Ordinary Shares has not been suspended for at least five consecutive Business Days prior to a possible Mandatory Conversion Date and the suspension is continuing on the possible Mandatory Conversion Date.

For more information on the Mandatory Conversion Conditions you should read the CPS1 Prospectus (PDF 736kB).

A. The Margin for the Dividend Rate, determined by the Bookbuild, is 2.50% per annum. The Dividend Rate for each Dividend Period will be set on the first Business Day of each Dividend Period and will be calculated using the following formula:

Dividend Rate = (Bank Bill Rate + Margin) x (1 - Tax rate)

The Bank Bill Rate used in calculating each Dividend will be the Bank Bill Rate on the first Business Day of the Dividend Period. You should read the CPS1 Prospectus (PDF 736kB) for more details on how the Dividend Rate will be set.

A.Dividends scheduled to be paid on each Dividend Payment Date will be calculated using the following formula:

Dividend Rate = (Bank Bill Rate + Margin) x (1 - Tax rate)
Issue Price means $100 per CPS1; and
N means the number of days in the Dividend Period.

ANZ proposes to announce on ASX the Dividend Rate for each Dividend Period.

A. The Issue Date VWAP was calculated as $17.35. Accordingly, the Maximum Conversion Number is set at 11.5274 ANZ ordinary shares per CPS1. For details about the calculation of these numbers and how they affect CPS1, see the CPS1 Prospectus (PDF 736kB).

A. You may find out how many CPS1 you hold by calling the ANZ Information Line on 1800 113 399 (within Australia), 0800 174 007 (within New Zealand) or +61 3 9415 4010 (international) or by asking your Syndicate Broker.

A. CPS1 are classified as Non-Innovative Residual Tier 1 Capital under APRA’s capital adequacy guidelines. Banks can currently issue both Innovative and Non-Innovative hybrid capital instruments totaling up to 25 percent of net Residual Tier 1 capital. Of this, Innovative hybrid securities are limited to 15 percent, therefore banks need to issue a minimum of 10 percent of their hybrid capacity in the form of Non-Innovative securities if they want to maximise the hybrid component of the capital mix.

For more information see the Prospectus or APRA's website at www.apra.gov.au

A. CPS2 are fully paid preference shares issued by ANZ pursuant to a prospectus dated 18 November 2009 (CPS2 Prospectus), which will mandatorily convert into Ordinary Shares on 15 December 2016 (subject to certain conditions being satisfied). However ANZ may elect for a third party to purchase the CPS2 rather than delivering the Ordinary Shares issued on Conversion to the investor.

CPS2 provides investors with Dividends that are preferred, non-cumulative, based on a floating rate and are expected to be fully or substantially franked. Dividends are scheduled to be paid quarterly in arrears on the Dividend Payment Dates, subject to the Payment Tests. You should read the CPS2 Prospectus (PDF 1.71MB) for a full description of CPS2.

A. CPS2 Holders will receive Ordinary Shares on Conversion of the CPS2 on the earliest Mandatory Conversion Date unless the Mandatory Conversion Conditions are not satisfied or Resale occurs. Upon Conversion, CPS2 Holders will receive approximately $101.01 worth of Ordinary Shares per CPS2 based on the VWAP of Ordinary Shares during the 20 Business Days before the Mandatory Conversion Date.

For more information on the Mandatory Conversion you should read the CPS2 Prospectus (PDF 1.71MB).

A. The Mandatory Conversion Date will be 15 December 2016 provided that all of the Mandatory Conversion Conditions are satisfied. If any of the Mandatory Conversion Conditions are not satisfied with respect to 15 December 2016, then the Mandatory Conversion Date will be deferred until the next Dividend Payment Date on which all of the Mandatory Conversion Conditions are satisfied.

For more information on Mandatory Conversion Date you should read the CPS2 Prospectus (PDF 1.71MB).

A. Before a possible Mandatory Conversion Date, ANZ may choose to arrange that all CPS2 on issue be acquired from CPS2 Holders by a third party (Nominated Purchaser) on the possible Mandatory Conversion Date. This process is called Resale. Resale can occur whether or not the Mandatory Conversion Conditions are satisfied.

If Resale is chosen by ANZ, CPS2 Holders will be notified and on the possible Mandatory Conversion Date they will receive $100 from the Nominated Purchaser for each CPS2 rather than a variable number of Ordinary Shares issued by ANZ.

For more information on Resale you should read the CPS2 Prospectus (PDF 1.71MB).

A. The Mandatory Conversion Conditions are:

• First Mandatory Conversion Condition: the VWAP of Ordinary Shares on the 25th Business Day before but not including a possible Mandatory Conversion Date is greater than 56% of the Issue Date VWAP.
• Second Mandatory Conversion Condition: the VWAP of Ordinary Shares during the period of 20 Business Days before (but not including) a possible Mandatory Conversion Date is greater than 50.51% of the Issue Date VWAP.
• Third Mandatory Conversion Condition: Ordinary Shares remain listed and admitted to trading on ASX, and trading of Ordinary Shares has not been suspended for at least five consecutive Business Days prior to a possible Mandatory Conversion Date and the suspension is continuing on the possible Mandatory Conversion Date.

For more information on the Mandatory Conversion Conditions you should read the CPS2 Prospectus (PDF 1.71MB).

A. The Margin for the Dividend Rate, determined by the Bookbuild, is 3.10% per annum. The Dividend Rate for each Dividend Period will be set on the first Business Day of each Dividend Period and will be calculated using the following formula:

Dividend Rate = (Bank Bill Rate + Margin) x (1 - Tax rate)

The Bank Bill Rate used in calculating each Dividend will be the Bank Bill Rate on the first Business Day of the Dividend Period. You should read the CPS2 Prospectus (PDF 1.71MB) for more details on how the Dividend Rate will be set.

A.Dividends scheduled to be paid on each Dividend Payment Date will be calculated using the following formula:

Dividend Rate = (Bank Bill Rate + Margin) x (1 - Tax rate)
Issue Price means $100 per CPS2; and
N means the number of days in the Dividend Period.

ANZ proposes to announce on ASX the Dividend Rate for each Dividend Period.

A. The Issue Date VWAP was calculated as $21.8002. Accordingly, the Maximum Conversion Number is set at 9.1742 ANZ ordinary shares per CPS2. For details about the calculation of these numbers and how they affect CPS2, see the CPS2 Prospectus (PDF 1.71MB).

A. You may find out how many CPS2 you hold by calling the ANZ Information Line on 1800 113 399 (within Australia), 0800 174 007 (within New Zealand) or +61 3 9415 4010 (international) or by asking your Syndicate Broker.

A. CPS2 are classified as Non-Innovative Residual Tier 1 Capital under APRA’s capital adequacy guidelines. Banks can currently issue both Innovative and Non-Innovative hybrid capital instruments totaling up to 25 percent of net Residual Tier 1 capital. Of this, Innovative hybrid securities are limited to 15 percent, therefore banks need to issue a minimum of 10 percent of their hybrid capacity in the form of Non-Innovative securities if they want to maximise the hybrid component of the capital mix.

For more information see the Prospectus or APRA's website at www.apra.gov.au

A.CPS3 are fully paid preference shares issued by ANZ pursuant to a prospectus dated 31 August 2011 (CPS3 Prospectus), which will mandatorily convert into Ordinary Shares on 1 September 2019 (subject to certain conditions being satisfied) or if ANZ’s Common Equity Capital Ratio is equal to or less than 5.125% (or APRA determines that to be the case).

CPS3 provide investors with Dividends that are preferred, non-cumulative, based on a floating rate and are expected to be fully or substantially franked. Dividends are scheduled to be paid semi-annually in arrears on the Dividend Payment Dates, subject to the Payment Tests. You should read the CPS3 Prospectus (PDF 1.71MB) for a full description of CPS3.

A.CPS3 Holders will receive Ordinary Shares on Conversion of the CPS3 on the earliest Mandatory Conversion Date unless the Mandatory Conversion Conditions are not satisfied. Upon Conversion, CPS3 Holders will receive approximately $101.01 worth of Ordinary Shares per CPS3 based on the VWAP of Ordinary Shares during the 20 Business Days before the Mandatory Conversion Date.

For more information on the Mandatory Conversion you should read the CPS3 Prospectus (PDF 1.71MB).

A.The Mandatory Conversion Date will be 1 September 2019 provided that all of the Mandatory Conversion Conditions are satisfied. If any of the Mandatory Conversion Conditions are not satisfied with respect to 1 September 2019, then the Mandatory Conversion Date will be deferred until the next semi-annual Dividend Payment Date on which all of the Mandatory Conversion Conditions are satisfied.

For more information on Mandatory Conversion Date you should read the CPS3 Prospectus (PDF 1.71MB).

A.The Mandatory Conversion Conditions are:

• First Mandatory Conversion Condition: the VWAP of Ordinary Shares on the 25th Business Day before (but not including) a possible Mandatory Conversion Date is greater than 56% of the Issue Date VWAP.
• Second Mandatory Conversion Condition: the VWAP of Ordinary Shares during the period of 20 Business Days before (but not including) a possible Mandatory Conversion Date is greater than 50.51% of the Issue Date VWAP.
• Third Mandatory Conversion Condition: Ordinary Shares remain listed and admitted to trading on ASX, and trading of Ordinary Shares has not been suspended for at least five consecutive Business Days prior to a possible Mandatory Conversion Date and the suspension is continuing on the possible Mandatory Conversion Date.

For more information on the Mandatory Conversion Conditions you should read the CPS3 Prospectus (PDF 1.71MB).

A.CPS3 will convert into Ordinary Shares on the Common Equity Capital Conversion Date immediately following the occurrence of a Common Equity Capital Trigger Event. A Common Equity Capital Trigger Event occurs if ANZ’s Common Equity Capital Ratio (which is broadly equivalent to its Core Tier 1 Capital Ratio under APRA’s existing prudential standards) is equal to or less than 5.125% (or APRA determines that to be the case).

Upon Conversion, CPS3 Holders will receive a number of Ordinary Shares per CPS3 based on the VWAP of Ordinary Shares during the 5 Business Days before the Common Equity Capital Conversion Date, but not more than the Maximum Conversion Number. As a result, in these circumstances CPS3 Holders may receive only the Maximum Conversion Number of Ordinary Shares per CPS3 which may be worth significantly less than $101.01 and CPS3 holders may suffer loss as a consequence.

Such conversion is not subject to the Mandatory Conversion Conditions being satisfied.

A.Subject to receiving APRA’s prior written approval and certain conditions being satisfied, ANZ may choose to Exchange all or some CPS3 on 1 September 2017 and each subsequent semi-annual Dividend Payment Date.

Exchange for each CPS3 means either redeeming for $100 or converting into Ordinary Shares. Upon Conversion, CPS3 Holders will receive a variable number of Ordinary Shares with a value of approximately $101.01 per CPS3 based on the VWAP of Ordinary Shares during the 20 Business Days before the Exchange Date.

For more information on Optional Exchange you should read the CPS3 Prospectus (1.71 MB).

A.The Margin for the Dividend Rate, determined by the Bookbuild, is 3.10% per annum. The Dividend Rate for each Dividend Period will be set on the first Business Day of each semi-annual Dividend Period and will be calculated using the following formula:

Dividend Rate = (Bank Bill Rate + Margin) x (1 - Tax rate)

The Bank Bill Rate used in calculating each Dividend will be the Bank Bill Rate on the first Business Day of the semi-annual Dividend Period. You should read the CPS3 Prospectus (PDF 1.71MB) for more details on how the Dividend Rate will be set.

You should refer to ANZ’s ASX Announcement on 28 September 2011 in relation to the closing of the CPS3 Offer for details of the Dividend Rate for the first Dividend Period ending on 1 March 2012.

A. Dividends scheduled to be paid on each Dividend Payment Date (1 March and 1 September in each year) will be calculated using the following formula:

where:

Dividend Rate = (Bank Bill Rate + Margin) x (1 - Tax rate)
Issue Price means $100 per CPS3; and
N means the number of days in the Dividend Period.
ANZ proposes to announce on ASX the Dividend Rate for each Dividend Period.

A.The Issue Date VWAP was calculated as $19.53. Accordingly, the Maximum Conversion Number is set at 10.2407 ANZ ordinary shares per CPS3. For details about the calculation of these numbers and how they affect CPS3, see the CPS3 Prospectus (1.71 MB).

A.You may find out how many CPS3 you hold by calling the ANZ Information Line on 1800 113 399 (within Australia), 0800 174 007 (within New Zealand) or +61 3 9415 4010 (international) or by asking your broker or other professional adviser.

A.Under APRA’s current capital adequacy standards, Non-innovative Residual Tier 1 capital comprises perpetual non-cumulative preference shares that satisfy certain criteria as defined by APRA. Pursuant to the proposed Basel III capital framework applicable to banks globally, such preference shares will be classified as Additional Tier 1 Capital and will be required to contain additional terms (which are yet to be finalised). Australian banks can currently issue hybrid capital instruments totaling up to 25 percent of their net Residual Tier 1 capital. Therefore banks need to issue Non-innovative hybrid capital securities if they want to maximise the hybrid component of the capital mix.

APRA has put in place Interim Arrangements for the issuance of Residual Tier 1 Capital while the Basel III capital framework is being finalised. Pursuant to those Interim Arrangements, APRA has confirmed that CPS3 will constitute Residual Tier 1 Capital under the current capital adequacy standards and will be eligible for transitional treatment as Additional Tier 1 Capital under the Basel III framework as adopted by APRA.

For more information refer to the CPS3 Prospectus (1.71 MB) or APRA's website at www.apra.gov.au