The ratings on Australia and New Zealand Banking Group Ltd. (ANZ) reflect its strong and well-entrenched market position in its core geographic markets of Australia and New Zealand, its relatively moderate risk profile, which is characterized by a focus on lower risk consumer assets, and its solid and strengthening core earnings profile. Although ANZ's funding profile remains sound, the bank, like its peers, has been challenged to mobilize low-cost customer deposits in line with the recent strong credit growth, which is expected to have an ongoing negative impact on its net interest margins and overall funding mix. ANZ's capital position weakened at the end of calendar 2003 following its acquisition of National Bank of New Zealand Ltd. (NBNZ), although capital
