Australia and New Zealand Banking Group Ltd.

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

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

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