Australia and New Zealand Banking Group Ltd.

In our view ANZ's dependence on domestic and offshore wholesale funding remains a weakness; notwithstanding improvements over the past 10 years across the Australian banking system. The ratings on ANZ also benefit from our expectation that the Australian government is highly likely to provide timely financial support to ANZ, if needed. The outlook on ANZ is stable. We forecast ANZ's credit losses in the next two years to return to their pre-COVID levels. Consequently, we expect earnings to remain sound despite low interest rates. We see very limited upside to our issuer credit ratings on ANZ in the next two years. Alternative scenario: We see a one-in-three possibility that Australian banks will face reduced industry risks in the next two

...We expect Australia and New Zealand Banking Group Ltd.'s (ANZ) strong market position and focus on low-risk retail and commercial banking activities in its two core geographies will continue to support its earnings profile. The economies of both countries are recovering strongly after the economic impact of the COVID-19 pandemic. ANZ's strong capitalization will remain a strength to its credit profile. We forecast ANZ's credit losses to revert to pre-COVID-19 levels in the next one to two years. In our view ANZ's dependence on domestic and offshore wholesale funding remains a weakness; notwithstanding improvements over the past 10 years across the Australian banking system. The ratings on ANZ also benefit from our expectation that the Australian government is highly likely to provide timely financial support to ANZ, if needed....

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