ANZ : UK Disclosure and Transparency Rules Submission

7 May 2024

DISCLOSURE AND TRANSPARENCY RULES - HALF-YEARLY FINANCIAL REPORT SUBMISSION

Australia and New Zealand Banking Group Limited (ABN 11 005 357 522) ("ANZBGL") together with its subsidiaries (the "Group") - Half-Yearly Financial Report submission under the Disclosure and Transparency Rules ("DTR") of the United Kingdom Financial Conduct Authority

The following attached documents constitute ANZBGL's 2024 Half-Yearly Financial Report for the purposes of the disclosure requirements of DTR 4.2:

• The Condensed Consolidated Financial Statements and Notes to Condensed Consolidated Financial Statements for the half year ended 31 March 2024, Directors' Report (including matters included by reference) and Directors' Declaration (as set out on pages 3 to 46 of ANZBGL's Half Year 31 March 2024 Consolidated Financial Report);
• A description of the principal risks and uncertainties for the remaining six months of the financial year provided in accordance with DTR 4.2.7 R (2); and
• A responsibility statement of the Directors of ANZBGL provided in accordance with DTR 4.2.10 R (3)(b).

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ANZBGL's Half Year 31 March 2024 Consolidated Financial Report

This document was separately lodged by ANZBGL with the applicable stock exchanges, including the London Stock Exchange and the Australian Securities Exchange on 7 May 2024.

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Principal risks and uncertainties faced by Australia and New Zealand Banking Group Limited ABN 11 005 357 522 ("ANZBGL") and its subsidiaries ((ANZBGL together with its subsidiaries, the "Group") (DTR 4.2.7 R (2)) ("Principal Risk and Uncertainties")

Introduction

The Group's activities are subject to risks and uncertainties that can materially and adversely impact its business, business model, operations, results of operations, reputation, prospects, liquidity, capital resources, financial performance and financial condition (together, the "Group's Position"). These risks and uncertainties may be financial or non-financial and may result from external factors over which the Group may have little or no control. The risks and uncertainties described below are not the only ones that the Group may face. Additional risks and uncertainties that the Group is unaware of, or that the Group currently does not consider material, may also become important factors that affect it. If any of the specified or unspecified risks and uncertainties actually occur (individually or collectively), the Group's Position may be materially and adversely affected, with the result that the trading price or value of the Group's equity or debt securities could decline and investors could lose all or part of their investment.

Risks related to the Group's business activities and industry

1. Changes in political and economic conditions, particularly in Australia, New Zealand, the Asia Pacific region, the United Kingdom ("UK"), Europe and the United States (the "Relevant Jurisdictions"), may adversely affect the Group's

Position

The Group's financial performance is influenced by the political, economic and financial conditions in the countries and regions in which the Group, its customers and its counterparties carry on business. The Group can give no assurances as to the likely future conditions in the economies of the Relevant Jurisdictions where the Group has its main operations or other jurisdictions in which the Group operates or obtains funding.

The political, economic and financial conditions in the Relevant Jurisdictions may be impacted by a range of factors including, but not limited to, domestic and international economic events, the stability of the banking system and any related implications for funding and capital markets, other changes in financial markets, global supply chain developments, political developments, pandemics and natural disasters.

Instability in political conditions may result in uncertainty, declines in market liquidity and increases in volatility in global financial markets and may adversely impact economic activity in the Relevant Jurisdictions, which could in turn adversely affect the Group's Position. Recent examples include the conflict in Ukraine, the Israel-Hamas war and recent conflict between Israel, Iran and Iran's proxies and the associated implementation of economic security-related legislation, the possibility of that war expanding into wider regional conflict in the Middle East, sanctions and trade restrictions in various markets, and heightened tensions between the United States and China, including with respect to the status of Taiwan.

Although the Group does not operate in and does not currently have any material direct exposure to Israel, Gaza, Iran, Russia or Ukraine, any prolonged market volatility or economic uncertainty could adversely affect the Group's Position. Tensions between the United States and China also have the potential to adversely impact the markets in which the Group operates and the Group's Position. These geopolitical issues have led to the implementation of economic security-related legislation and trade restrictions in many markets, including enhanced inbound and outbound investment screening mechanisms, anti-coercion instruments, sanctions, export controls and security-related industrial policy.

Inflationary pressure remains relatively high in many economies, including in the

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Relevant Jurisdictions. Excessively strong demand for goods and services, geopolitical tensions, and global economic challenges, such as supply chain issues, weather conditions in agricultural regions, high energy prices, high food prices and tight labour markets, have contributed to high inflation, which has increased the cost of living and reduced disposable income for consumers. Persistently high inflation may exacerbate market volatility, further slow economic growth and increase unemployment, each of which may cause further declines in business and investor confidence and increase the risk of customer defaults, which could adversely affect the Group's Position.

China is one of Australia's and New Zealand's major trading partners and a significant driver of commodity demand and prices in many of the markets in which the Group and its customers operate. Any heightening of geopolitical tensions and the occurrence of events that adversely affect China's economic growth and Australia's and New Zealand's economic relationship with China, including the implementation of additional tariffs and other protectionist or economic security-related trade policies, including sanctions, could adversely affect Australian or New Zealand economic activity and, as a result, could adversely affect the Group's Position. Furthermore, if there were a broad-based and sustained economic slowdown in China, the health of the Chinese financial system may be adversely impacted, which could have negative effects on the global financial system and economy. This could result in an economic downturn, counterparties defaulting on their obligations, countries introducing capital controls, and could adversely affect the Group's Position. Refer to risk factor 5 "Changes in the real estate markets in Australia, New Zealand or other markets where the Group does business may adversely affect the Group's Position".

The stability of banking systems has come under scrutiny in recent times as a result of the failure of certain banking institutions in the United States and Europe. The risk of contagion from the failure of a bank or other financial institution could materially impact the Group's ability to replace maturing liabilities and access funding in a timely and cost- effective manner, which could adversely affect the Group's Position. Additionally, collapses of certain financial institutions in the United States, Europe or elsewhere could result in changes to capital and other regulatory requirements applicable to the Group, which may affect the Group's Position. Refer to risk factor 13 "Liquidity and funding risk events may adversely affect the Group's Position".

There has been a rise in investor caution across global commercial real estate markets as investors are reallocating to other investment classes or waiting for greater certainty regarding inflation and interest rates, particularly as a result of weakening sentiment in the United States and Europe. A global liquidity constraint could compound the effects of weakening fundamentals on valuations and refinance risk in commercial real estate markets. Negative developments in commercial real estate markets could lead to increased credit losses from business insolvencies, increased financial stress and defaults from higher leveraged borrowers, which could adversely affect the Group's Position. Refer to risk factor 5 "Changes in the real estate markets in Australia, New Zealand or other markets where the Group does business may adversely affect the Group's Position".

If economic conditions deteriorate in the Relevant Jurisdictions, asset values in housing, commercial or rural property markets could decline, unemployment could rise and corporate and personal incomes could decline. Deterioration in global markets, including equity, property, currency and other asset markets, may impact the Group's customers and the security the Group holds against loans and other credit exposures. This may impact the Group's ability to recover loans and other credit exposures. Should any of these occur, the Group's Position could be adversely affected. Refer to risk factor 10 "Credit risk may adversely affect the Group's Position".

2. Competition in the markets in which the Group operates may adversely affect the Group's Position

The markets in which the Group operates are highly competitive. Competition is expected to continue to increase. Competitors include foreign/offshore financial service providers who expand in Australia or New Zealand, new non-bank entrants and smaller providers. Examples of factors that may affect competition and negatively impact the

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Group's Position include:

• entities that the Group competes with, including those outside of Australia and New Zealand, could be subject to lower levels of regulation and regulatory activity. This could allow them to offer more competitive products and services, because those lower levels of regulation may give them a lower cost base and/or the ability to attract employees that the Group would otherwise seek to employ;
• digital technologies and business models are changing customer behaviour and the competitive environment. Competitors are increasingly utilising new technologies including artificial intelligence ("AI") and disrupting existing business models in the financial services sector;
• companies from outside of the financial services sector are directly competing with the Group by offering products and services traditionally provided by banks. This includes new entrants obtaining banking licenses and partnering with existing competitors;
• consumers and businesses may choose to transact using, or to invest or store value in, new forms of currency (such as cryptocurrencies, which are largely unregulated, or central bank digital currencies) in relation to which the Group may choose not, or may not be able, to provide financial services, competitively. A new form of currency could change how financial intermediation and markets operate and, with that, may adversely impact the competitive and commercial position of the Group; and
• the Australian and New Zealand Governments may consider implementing policies that further increase competition in the banking market. For example, the Australian Competition and Consumer Commission's ("ACCC") inquiry into the market for the supply of retail deposit products, which released its final report in December 2023, made recommendations concerning retail deposits. The Australian Parliament's inquiry into economic dynamism, competition and business formation, which released its final report in March 2024, made recommendations, such as treasury examining mechanisms to increase consumer engagement with mortgages and deposit products, designed to boost competition including in the banking sector specifically. In August 2023, the Australian Government commenced a review of its competition laws and institutions which is expected to last at least two years. In June 2023, the New Zealand Government released an exposure draft of a Customer and Product Data Bill, which contemplates the introduction of a consumer data right that would seek to improve consumers' ability to compare and switch products. The New Zealand Commerce Commission is conducting a market study into competition for personal banking services and has recently released its draft report, which includes sixteen draft recommendations to improve competition for the long-term benefit of consumers. For example, with work already underway on the Customer and Product Data Bill, the Commerce Commission has recommended that the New Zealand Government should set clear deadlines and work with the industry to ensure open banking (which allows banks to share a customer's financial data with third parties only if the customer instructs them to do so) is fully operational by mid- 2026. The Commerce Commission is expected to publish its final report by August
  2024. Whilst these recommendations, inquiries, bills and reviews may result in the implementation of regulations designed to increase competition in the banking market, the impact of these recommendations, inquiries, bills and reviews on the Group remains unclear.

The impact on the Group of an increase in competitive market conditions or a technological change that puts the Group's business platforms at a competitive disadvantage, especially in the Group's main markets and products, could lead to a material reduction in the Group's market share, customers and margins and adversely affect the Group's Position. Increased competition for deposits may increase the Group's cost of funding. If the Group is not able to successfully compete for deposits, the Group may be forced to rely on less stable and/or more expensive forms of funding, or to reduce lending. This may adversely affect the Group's Position. Geopolitical and economic disruptions could have a significant impact on competition and profitability in the financial services sector due to funding cost and credit provision increases, changes in interest rates, insufficient liquidity, implementation of business continuity plans, changes to business strategies and regulatory safe harbours. A low-growth environment may lead to heightened competitive intensity and margin compression, particularly

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amongst traditional competitors with strong business models.

3. Acquisitions and divestments may adversely affect the Group's Position

The Group regularly examines a range of corporate opportunities, including acquisitions and divestments, to determine whether those opportunities will enhance the Group's strategic position and financial performance. Integration (or separation) of an acquired (or divested) business can be complex and costly. It sometimes includes combining (or separating) accounting and data processing systems, technology platforms and management controls, as well as managing relationships and contracts with employees, customers, regulators, counterparties, suppliers and other business partners. The loss of key relationships and personnel from an acquisition or divestment could have an adverse effect on the Group's Position.

There is no assurance that any acquisition (or divestment) will have the anticipated positive results around synergies, cost or cost savings, time to integrate (or separate) and overall performance, as the underlying assumptions for the acquisition (or divestment) may not prove to be accurate or achievable. Any acquisition (or divestment) may also impact the Group's credit ratings, cost of funds and access to further funding, which could in turn adversely affect the Group's funding and liquidity positions.

Integration (or separation) efforts could create inconsistencies in standards, controls, procedures and policies, as well as diverting management attention and resources. There is a risk of counterparties making claims in respect of completed or uncompleted transactions against the Group that could adversely affect the Group's Position. All or any of these factors could adversely affect the Group's ability to conduct its business successfully and impact the Group's operations or results. There is no assurance that employees, customers, counterparties, suppliers and other business partners of newly acquired (or retained) businesses will remain post-acquisition (or post-divestment). Further, there is a risk that completion of an agreed transaction may not occur whether in the form originally agreed between the parties or at all, including due to failure of the Group or the counterparty to satisfy completion conditions or because other completion conditions such as regulatory, shareholder or other approvals are not satisfied. Should any of these integration or separation risks occur, this could adversely affect the Group's

Position.

Transactions that the Group has announced but not completed include an agreement with Suncorp Group Limited ("SGL") to purchase 100% of the shares in SBGH Limited, the immediate non-operating holding company of Suncorp Bank. The ACCC declined to grant authorization for this acquisition in August 2023. This decision was reviewed by the Australian Competition Tribunal. On 20 February 2024, the Australian Competition Tribunal delivered its decision to authorise the acquisition. As at the date of this document, no applications for judicial review of the Tribunal's decision have been filed and the ACCC has indicated that it will not seek a judicial review of the Tribunal's decision. Subject to no third party seeking judicial review by the Full Federal Court and the remaining acquisition conditions being satisfied in due course, including Federal Treasurer approval and certain amendments to the State Financial Institutions and Metway Merger Act 1996 (QLD), the acquisition will proceed.

ANZBGL will also have a termination right under the Suncorp Bank Sale Agreement if APRA issues a written communication to ANZBGL under or in connection with APS 222 (Associations with Related Entities) to the effect that ANZBGL must not proceed with completion of the acquisition.

Completion of the acquisition is expected to occur in calendar third quarter of 2024. If the remaining acquisition conditions are not satisfied, a third party seeks judicial review of the

Australian Competition Tribunal's decision or APRA issues such a communication, the acquisition may not proceed.

The terms and conditions of the Federal Treasurer's approval that is granted or relevant amendments to the Queensland legislation may impose conditions, limitations, obligations or costs, or place restrictions on the conduct of the Group or its business

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following the acquisition or require changes to the terms of the transaction. There can be no assurance that any such conditions, obligations or restrictions (if imposed) will not have the effect of delaying or preventing completion of the transaction, imposing additional material costs on or materially limiting the revenues of the Group following the acquisition or otherwise reducing the anticipated benefits of the acquisition to the Group, any of which might have an adverse effect on the Group.

ANZBGL undertook a due diligence process in relation to the proposed acquisition of Suncorp Bank which relied in part on a review of financial, technology, legal and other information provided in respect of Suncorp Bank or was otherwise provided at meetings with Suncorp Bank management. Despite making reasonable efforts as part of the due diligence investigations, ANZBGL has not been able to verify the accuracy, reliability or completeness of all the information provided to it. If any information provided or relied upon by ANZBGL in its due diligence proves to be incorrect, incomplete or misleading, there is a risk that the actual financial position and performance of Suncorp Bank may be different to the expectations. There is also no assurance that the due diligence conducted was conclusive, and that all material issues and risks in respect of the proposed acquisition have been identified and avoided or mitigated, therefore, there is a risk that issues or risks may arise that may adversely impact the Group. SGL has provided ANZBGL with certain indemnities relating to certain pre-completion matters as well as certain representations and warranties in favour of ANZBGL. There is a risk that these protections may be insufficient to cover liabilities relating to these matters, which may have an adverse impact on the Group's financial performance and position. As is usual, the warranties and indemnities are also subject to certain financial claims thresholds and other limitations.

If for any reason any announced acquisition or divestment, including the acquisition of Suncorp Bank, is not completed, the Group's ongoing business may be adversely impacted and the Group may be subject to a number of risks. These risks include:

1. • financial markets may react negatively, resulting in negative impacts on the
     Group's securities and other adverse impacts;
   • the Group may experience negative reactions from its customers, vendors, and employees;
   • the Group will have incurred expenses and will be required to pay certain costs relating to the acquisition, whether or not the acquisition is completed, such as legal, accounting, investment banking, and other professional and administrative fees; and
   • matters relating to the acquisition may require substantial commitments of time and resources by the Group's management, which could otherwise have been devoted to other opportunities that may have benefited the Group.
2. The Restructure of the Group that established a non-operating holding company may adversely affect the Group's Position
   In 2023, the Group implemented a restructure ("Restructure") that resulted in ANZ Group Holdings Limited ("ANZGHL") becoming the new listed parent company of the Group in place of ANZBGL. ANZGHL is a non-operating holding company ("NOHC") and is authorised as such for the purposes of the Australian Banking Act. The Australian Prudential Regulation Authority's ("APRA") prudential framework for NOHCs is expected to become effective from 2025, following a period of industry consultation, which is currently ongoing. There is a risk that APRA's final regulatory framework for NOHCs of
   Authorised Deposit-Taking Institutions ("ADI") and the regulation of ANZGHL over time will differ from the existing regulatory framework and increase the regulatory risk of the Group. This may have negative consequences for the Group and require further changes to be made to its structure. The post Restructure operating model may fail to function as expected and/or may fail to realise the anticipated benefits, and further changes may therefore be required to the Group structure. To the extent this occurs, this may adversely affect the Group's Position.
3. Changes in the real estate markets in Australia, New Zealand or other markets where the Group does business may adversely affect the Group's Position
   Residential and commercial property lending, together with real estate development and investment property finance, are important businesses of the Group. Major sub-

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segments within the Group's lending portfolio include:

• residential housing loans (owner occupier and investment); and
• commercial real estate loans (investment and development).

Whilst residential property prices have generally remained resilient to date, the scale and pace of interest rate rises have resulted in commercial property prices declining in Australia and New Zealand since 2021 and in some segments the full extent of such property price declines may not have yet been evidenced in softening market demand and valuations, despite a more stable interest rate outlook. The extent of property price changes will ultimately depend on any future interest rate rises or persistently high interest rates and their impact on the economy.

APRA included credit-based macroprudential policy measures within its Prudential Standard APS 220 Credit Risk Management ("APS 220") with effect from 1 January 2023. These may be used by APRA to address systemic risks if needed. Future changes to these measures by APRA could restrict the Group's flexibility and impact the profitability of one or more businesses. Refer to risk factor 16 "Regulatory changes or a failure to comply with laws, regulations or policies may adversely affect the Group's Position".

Higher interest rates and rising costs of living have put pressure on household balance sheets, and this has and is likely to continue to impact demand for residential and commercial property. These pressures are resulting in an increase in residential property related delinquencies in New Zealand, which, having been at low levels since COVID-19, have become more elevated over the year to March 2024. In Australia, an increase in delinquencies has also been evidenced in the last six months since late 2023.

Increases in interest rates may affect debt serviceability, increase loan defaults experienced by the Group's borrowers, place pressure on loan covenants and reduce demand for commercial and residential property and the Group's associated lending products in both Australia and New Zealand. To address current high inflation levels, interest rates may be maintained at higher levels for a longer period. Any future interest rate rises or persistently high interest rates could also lead to increased credit losses from business insolvencies, increased mortgage stress and defaults, a potential adverse impact on markets, and a potential downturn in the Australian and New Zealand economies. This may in turn impact the ability of tenants to pay rent and in turn decrease the quality of real estate earnings of the Group's borrowers.

Recent interest rate increases, asset price inflation and yield compression, may cause declines in interest coverage ratios and asset values. Valuations are presently lagging market sentiment. The Group has been observing declining values for existing security and expects further declines in some segments in the next 12 months. Dated valuations benefit from a buffer created following asset price inflation until the middle of 2022. This may result in increased refinance risk and require equity contributions from borrowers towards debt reduction and/or a restructure of facilities. Secondary grade assets may be more susceptible to a decline in prices. This may be the case if investors have overlooked "fundamentals" in a highly competitive and liquid market (debt and equity). Refinance risk could be increased if there are liquidity constraints in the banking sector. The Group has observed some signs of change in sentiment in non-bank debt markets as investors re- balance portfolios and change expectations in the face of greater uncertainty and volatility. This has resulted in an increased cost of financing rather than reduction in liquidity and the non-bank debt market remains an available source of refinancing. Non-bank financiers have supported the pre-development land and property development sector in recent years, so the number of new project starts may decline given higher cost of funding or if non-bank financiers begin to withdraw support from weaker sponsors.

Construction risk issues, including supply chain constraints and a rapid rise in material costs, compounded by labour shortages and increased labour costs, may impact contractor profitability, cash flow and liquidity and financial stability, which in turn may impact delivery risk associated with commercial and larger residential development projects (including the development of land and apartments) and the feasibility of such

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developments and underlying land values in the short to medium term.

The COVID-19 pandemic triggered an ongoing change in the demand and supply dynamics in the office sector as certain flexible working arrangements have continued, which may impact tenancy demand, reduce rental growth, increase incentives provided by owners to renters, soften investor demand, yield expectations and value, particularly for secondary grade assets with weaker environmental, social and governance ("ESG") (specifically energy efficiency) credentials, given tenants are being more discerning in a less competitive market.

While valuation degradation is not uniform across all commercial real estate sectors, some institutional and private investor clients may see their real estate investment portfolios diminish in value as a result of changes in the real estate market. This could potentially lead to a weakening in their risk profile and a reduction in their willingness and/or ability to repay related loan facilities owed to the Group.

Whilst the Australian and New Zealand commercial real estate markets have remained relatively robust despite high inflation and a rapid rise in interest rates, weaker real estate markets in Europe, America and China could have a contagion effect on demand for Australian and New Zealand assets from foreign equity and debt capital markets.

Each of the factors outlined above may adversely affect the Group's Position.

1. Sovereign risk events may destabilise global financial markets and may adversely affect the Group's Position
   Sovereign risk is the risk that governments will default on their debt obligations and be unable to refinance their debts as and when they fall due, thereby destabilising parts of their economies. Sovereign risk may adversely impact the Group directly, through adversely impacting the value of the Group's assets, or indirectly, through destabilising global financial markets, thereby adversely impacting the Group's Position. Sovereign risk exists in many economies, including the Relevant Jurisdictions. If a sovereign defaults, it could impact other markets and countries, the consequences of which may be similar to or worse than those experienced during the global financial crisis and subsequent sovereign debt crises.
2. Market risk events may adversely affect the Group's Position
   Market risk is the risk of loss arising from adverse changes in interest rates, currency exchange rates, credit spreads, or from fluctuations in bond, commodity or equity prices. For purposes of financial risk management, the Group differentiates between traded and non-traded market risks. Traded market risks principally arise from the Group's trading operations in interest rates, foreign exchange, commodities and securities. The non- traded market risk is predominantly interest rate risk in the banking book. Other non- traded market risks include transactional and structural foreign exchange risk arising from capital investments in offshore operations and non-traded equity risk. Losses arising from the occurrence of such market risk events may adversely affect the Group's Position.
3. Changes in exchange rates may adversely affect the Group's Position
   The Group conducts business in several different currencies. Accordingly, its businesses may be affected by movements in currency exchange rates. The Group's annual and interim reports are prepared and stated in Australian dollars. Any change in the value of the Australian dollar against other currencies in which the Group earns revenues (particularly the New Zealand dollar and the U.S. dollar) or holds capital, may adversely affect the Group's reported earnings and capital ratios. The Group currently hedges to partially mitigate the impact of currency changes. There is no assurance that the Group's hedges will be sufficient or effective, and any change in the value of the Australian dollar against other currencies in which the Group earns its revenue, or holds capital, may have an adverse impact on the Group's Position.
4. Pandemics and other public health crises may adversely affect the Group's Position

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The effects of a pandemic or other public health crisis may impact the Group's Position and the domestic and global economy, as was the case with the COVID-19 pandemic. Further, variants with respect to diseases may develop that impact the Group's customers and businesses and could lead to government action, which could adversely impact the Group's Position. Additionally, supply chain disruption and mobility constraints resulting from pandemics or public health crises could result in a decline in the Group's profit margins and could impact customers' cash flows, capital, liquidity and financing needs. Political and economic conditions following such events may cause reduced demand for the Group's products and services, an increase in loan and other credit defaults, bad debts, and impairments and an increase in the cost of the Group's operations. If any of these occur, the Group's Position could be adversely affected.

Risks related to the Group's financial situation

10. Credit risk may adversely affect the Group's Position

As a financial institution, the Group is exposed to the risks resulting from or associated with extending credit, including incurring credit-related losses that can occur as a result of a counterparty being unable or unwilling to honour its contractual obligations. Credit losses can and have resulted in financial services organisations realising significant losses and, in some cases, failing.

The risk of credit-related losses continues to be impacted by conditions relating to increased interest rates, high inflation, global supply chain disruptions and heightened political tensions, particularly those referred to in risk factor 1 "Changes in political and economic conditions, particularly in Australia, New Zealand, the Asia Pacific region, the

United Kingdom ("UK"), Europe and the United States (the "Relevant Jurisdictions"), may adversely affect the Group's Position". The risk of credit-relatedlosses has increased due to the factors described above and may further increase as a result of less favourable conditions, whether generally or in a specific industry sector or geographic region, which could cause customers or counterparties to fail to meet their obligations. These conditions include, but are not limited to, weakened confidence in the stability of the banking system generally or particular financial institutions that may impact the Group, its customers or counterparties, a sustained high level of unemployment, continued increase in interest rates and inflationary conditions, and a reduction in the value of assets the Group holds as collateral or the market value of the counterparty instruments and obligations it holds.

Some of the Group's customers and counterparties with exposures to these sectors may be particularly vulnerable:

• industries exposed to the unwinding of government stimulus packages and increasing interest rates;
• industries reliant on consumer discretionary spending;
• industries that are exposed to fuel supply shortages and rising costs including aviation, road transport, shipping and agriculture, particularly given the Ukraine and Middle East conflicts and their impact on oil and gas prices, production and supply;
• participants in energy or commodity markets that are exposed to rising margin requirements under derivatives that arise due to price volatility;
• mining operations that are exposed to a sustained fall in commodity prices due to supply or demand fluctuation;
• industries at risk of sanctions, geopolitical tensions or trade disputes (these include technology, agriculture, communications and financial institutions);
• industries exposed to declining global growth and disruption to global supply chains. These include but are not limited to the retail, wholesale, automotive, manufacturing

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