Analyst Presentation Frank Cicutto Managing Director and CEO, National Australia Bank 10 April 2000

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Analyst PresentationFrank CicuttoManaging
Director and CEO, National Australia Bank10
April 2000

• Towards a GlobalIntegrated Financial
  ServicesBusiness

2
The Nationals Core Strategies

• 1 Drive performance and growth in businesses
  thatrely on relationship management
• 2 Accelerate the growth of selected global
  businesses
• 3 Stake out positions in areas key to the
  evolution of financial services
• 4 Manage our other businesses for value
• 5 Build diversified income streams

3
The Transaction

• National acquires MLC and Lend Lease financial
  services businesses
• Retail and wholesale funds management
• Funds administration
• Superannuation, Investments Life Insurance
• Retail distribution
• Consideration 4.56 billion cash
• Funded from internal resources and available debt
  facilities
• No equity to be issued
• Internal rate of return in excess of 13
• Exceeds cost of capital

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Impact on Financial Performance
Pro Forma Pre Post Comments Cash
EPS 2.01 2.07 2.9 accretive ROAE
(Cash) 18.6 19.1 Positive

• Cash eps accretive in year one
• Independently reviewed synergies 138 million
  pre-tax by year 3
• Integration costs 92 million over 2 years

Pro-forma MLC June 1999, National September
1999 All figures post preference dividends
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Capital Impact


Pro Forma Pre Post Comments Tier
1 7.8 6.7 Comfortable (Target range 6.0 to
6.5) Total Capital 10.2 9.0 Comfortable
Based on expected closing position June 2000
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Diversifies Income Sources

• Pre Post
• Wealth management operating profit /Total
  operating profit
• Australia 6.6 18.1
• Group 4.2 10.5

Based on expected closing position June 2000
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Wealth Management Acquisitions
PER

• MLC1 20.7 x
• Average comparable Australiantransactions2 20.2
  x
• Average comparable UK life transactions3 22.8 x
• BT Funds Management 27.0 x
• Gartmore Funds Management (UK) 37.0 x

1 - Based on analyst consensus June 2000
earnings(average JB Were, Merrill Lynch, Warburg
Dillon Read Macquarie) 2 - Colonial, Tyndall,
FAI, Prudential and Legal General 3 - Legal
General, Scottish Widows and London Manchester
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MLC Delivers...

• Pre Post Increase
• Immediate scale in Australia
• Total FUM 22 billion 52 billion 133
• Retail FUM 8 billion 26 billion 225
• Superannuation FUM 14 billion 44 billion 214
• Distribution capability
• Advisers 300 IFAs 1450 IFAs 383
• E-commerce capability
• Your Prosperity, Masterkey, 360o , Flexiplan
• Leading brands

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MLC Delivers...

• Recognised quality leadership team
• Sustained performance
• OPAT - CAGR 95 to 99 - 12.2 p.a.
• FUMA - CAGR 95 to 99 - 11.6 p.a.
• 4-star Morningstar rating
• Manager of Managers approach
• Best model for future
• Consistent with National model
• Global growth potential
• Export capabilities to UK, NZ
• Asian opportunity

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Immediate Scale - Retail FUM

• Most profitable segment
• Net retail inflows
• National - 1.2 billion p.a.
• MLC - 1.4 billion p.a.
• Both businesses growing strongly

National / MLC 2
Source December 1999 ASSIRT Market Share Report
Australia only
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Immediate Scale - Superannuation
National / MLC 2

• Attractive growth segment
• Workplace financial services
• Employee choice - Plum

billion
Source December 1999 ASSIRT Market Share Report
Australia only
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Immediate Scale - Protection

• Strong growth from National bank platform
• Part of meeting the full financial needs of
  customers

National / MLC 3
In-force premium - million
Source Rice Kachor September 1999 Australia
only
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Immediate Scale - Total FUM

• High proportion of attractive retail FUM segment
• Wholesale FUM has lower margins

National / MLC 3 52 billion
billion
Source December 1999 ASSIRT Market Share Report
Australia only
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Market Leading Distribution

• Customers
• 1 million MLC wealth management customers
• 4.5 million National Australian banking customers
• Sales Force
• 1150 MLC advisers / agents
• extensive MLC IFA network
• 300 National advisers
• Integrated Banking and Wealth Management Sales
  Platform
• already established by National
• build on Nationals recent improved performance
  in retail FUM inflow
• Technology and E-commerce Capability
• MLC Master Key, Your Prosperity, Flexiplan
  and360 Degree systems

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Manager of Managers

• Consistent with National strategy
• Trusted adviser delivering best of breed
  products
• Focuses on customer needs / flexibility
• Spreads performance risk

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International Growth Potential

• United Kingdom
• MLC and National research indicates potential in
  UK - but needs customers and distribution channel
• National delivers these
• Established branch and electronic distribution
  network
• Significant untapped premium customer base
• New Zealand
• Build on Nationals existing strong position
• Asia
• Synergy potential in Hong Kong

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Significant UntappedPremium Customer Base
Size of catchment
Number of existing relationships
Existing customers
Hidden customers
Total catchment
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Cost and Revenue Synergies

• 138 million pre-tax cost and revenue synergies
  by year 3
• Product manufacturing savings
• IT infrastructure savings
• Distribution productivity
• MLC advisers marketing bank product
• National advisers using MLC infrastructure
• National corporate clients for super member
  choice
• e-commerce/direct internet delivery, eg. Your
  Prosperity

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Existing Business Model - MLC
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Combined Business Model - Post Integration
Retirement Income
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Best Option for National

• Quality Business
• Consistent high performer
• Proven business model
• Quality management team
• Good Strategic Fit
• Manager of managers approach
• Strong agent / IFA distribution
• e-commerce capability
• Strong Cultural Fit
• Low cost culture
• Retail focus
• Distribution targeted at high growth segments

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Best Option for National

• Global Growth Opportunities
• Significant UK opportunities
• Asian presence
• Leverages Nationals NZ presence
• Expands strategic options
• Low Risk
• Negotiated transaction
• Thorough due diligence
• Synergies have been independently reviewed
• Jointly developed integration
• Broader Strategic Alliance

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Proven Acquisition Capability
MLC
3,000
300
County Investment Management
Assets (LHS)
2,500
250
Net Profit (RHS)
Bank of New Zealand
Michigan National
200
2,000
Yorkshire Bank
Homeside
150
1,500
Clydesdale, Northern National Irish
Assets - Abillion
100
1,000
Net Profit - Amillion
CBC
50
500
0
0
84
85
86
87
88
89
90
91
92
93
94
95
96
97
83
82
98
99
00
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Delivers Against Our Core Strategies

• 1 Drive performance and growth in businesses
  thatrely on relationship management
• Key capability to leverage significant
  opportunity in existing premium and business
  customer base
• Access to new premium and business customer
  base
• Enhances direct and e-commerce distribution
  capabilities
• 2 Accelerate the growth of selected global
  businesses
• Delivers capability that can be built into
  global business
• 3 Stake out positions in areas key to the
  evolution of financial services
• Builds position in high growth wealth
  management
• Direct distribution e-commerce capabilities
• 5 Build diversified income streams
• Substantial increase in non-interest income

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Delivers on All Fronts

• Value creating
• Earnings accretive in year one
• Projected IRR exceeds cost of capital
• Immediate scale and capability
• Quality business
• Good strategic fit
• Low risk
• Easily integrated
• Due diligence completed
• Outstanding growth opportunities
• Superannuation
• e-commerce
• Global

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