The ratings assigned to Australia and New Zealand Banking Group Ltd. (ANZ) are supported by its sound profitability, strong position in core markets of Australia and New Zealand, and its diversified business base. The bank's risk profile and asset quality have benefited from a refocus of activities on the domestic retail market in the past three years, although asset quality remains weaker relative to domestic peers and average when compared internationally. ANZ's strategic focus on lower-risk businesses and the Australian and New Zealand market also has resulted in more robust and less-volatile earnings. The bank's capital ratios, while above average in the domestic market, are being managed down to meet shareholder performance objectives. ANZ's financial flexibility, however, is supported by
