ANZ

1
ANZ Delivering for Shareholders
Presentation to CLSA Investors Forum 2000 John
McFarlane, Chief Executive Officer 16 May 2000
2
ANZ

• One of the Big Four Australian banks. Provider
  of full
• range of financial services in Australia (since
  1835) and
• New Zealand (since 1840) with leadership in
  Corporate
• Banking, Credit Cards and Trade, an emerging
  strong e-Commerce position and an offshore
  network in Asia and Pacific (Grindlays sale
  announced 27 April).
• Assets 167b
• Market Cap 17.5b
• Profit (first half 00) 817m
• Staff 28,940
• Credit Rating AA-/Aa3

ANZ Headquarters 100 Queen Street Melbourne
3
ANZ Delivers on Financial Commitments

• March 2000 Results
• Double-digit earnings growth 14. EPS 10
• Increase ROE towards 20 17.8 (17.3)
• 53 cost income ratio 51.4 Costs flat
• Reduce risk Matches peers ex Grindlays
• Achieve an optimal capital structure 500m
  buyback completed 1bn buyback announced

4
Financial Performance
EPS
Tier 1 Ratio



ROE
Lending Mix

Cost Income Ratio

Mortgages
Emerging Markets
WBC
CBA
NAB
ANZ
5
Business Unit Performance
Other 8
Personal 45
International 9
A
Corporate 38
6
Change in Profit
Sale of Strategic Investments 33
Other Income 17
m
Property Revaluation 30
Other Fee Growth 30
Doubtful Debts (4)
850
Lending Fee 20
Costs (9)
Net Interest Income 34
817
Tax (34)
Restatement of Deferred Tax Balance (64)
800
764
750
Significant one off items (1)
700
650
600
Second Half 1999
First Half 2000
7
Improving Asset Quality
General Provision
Non Accrual Loans
m
m
Foreign Exchange Impact (18)
2000
762
1436
1395
1500
Surplus
886
Net Transfer to Specific Provision (197)
871
ELP Charge 256
944
1000
444
900
500
657
554
428
0
Sep 99
Mar 00
APRA Guidelines Minimum
1997
1998
1999
1H00
Specific Provisions
Net Non Accrual Loans
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Capital Management a Priority

Ratios

• Capital management objective
• Increase ROE
• Maintain AA status
• Targets
• Tier 1 6.5 - 7.0
• Inner Tier 1 6.0 - 6.5
• Reducing excess
• 500m buyback completed
• 1bn buyback in process

Hybrid Tier 1
Inner Tier 1
Net Tier 2
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Good Progress on Business Strategies

• Outcomes
• Mortgage cards share up Personal 45 of group
  profit FM challenging, new team
• Leadership position enhanced
• ROA 0.9 (0.7) Non accruals 0.4 (0.9)
• Grindlays sale Latin America Offices closed
  Asia-Pacific e-Commerce focus
• Approaching leadership B2C Strong portfolio B2B
  Web enabled internal processes Numerous venture
  investments

• Business Strategy
• Accelerate growth in Personal
• Build on strength in Corporate
• Simplify and focus International
• Build leadership in e-Commerce

10
Momentum in Personal
Share of Credit Card Spend
Share of Housing Lending


Internet Banking Users as of Main Relationships
Internet Banking Registrations
1999
2000
1998
Source Ord Minnett and Roy Morgan Research
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Leadership in Corporate
Business Banking Relationships AustralianMarket
Share 1999 ()

• Pre-eminent Corporate Bank in Australia and New
  Zealand in terms of relationships and customer
  satisfaction
• Leader in Treasury Products (FX, Risk Management)
• Esanda/UDC No1 Finance Company in Australia and
  New Zealand
• Leading Structured Finance Specialist in Asia
• No 1 in Trade in Australia

Customer Perception of Service Delivery 1999
(out of 10)
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Sale of Grindlays

• Price US1.3 (A2.2)bn
• Net Asset Value US590 (A990)m
• Goodwill US750 (A1,250)m
• Dividends US0.5 (A0.9) billion from Grindlays
  retained earnings
• Price multiples (excluding dividend)
• 2.3 times net asset value, 14.2 times annualised
  first half 2000 earnings
• Cooperation Agreement with SCB to service ANZ
  customers
• Final consideration subject to Net Asset Value at
  completion
• Customary representations and warranties
• Indemnity regarding litigation matters including
  NHB
• Completion expected 3Q subject to regulatory
  approval

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ANZ Profile

• Group Growth Grindlays
• Assets 167b 14b 10b
• Profit 817m 53m 79m
• Staff 28,940 -1231 5400
• Representation 39 14

ANZ Headquarters 100 Queen Street Melbourne
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Delivering via the Web
B2C
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Strategic Imperatives
Accelerate the growth program across 3 horizons
Radical transformation of the business
Improve sustainability of core franchises
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Strategic Imperatives
Accelerate the growth program across 3 horizons

• Reallocate investment towards current traditional
  growth opportunities
• Build substantial portfolio of e-products and
  businesses
• Build semi-global niche positions in trade, FX,
  structured finance, cards and e-Commerce
• Rapidly roll-out e-Commerce investments in Asia

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Strategic Imperatives
Accelerate the growth program across 3 horizons
Radical transformation of the business

• Revolutionise cost base to compete with new
  economy competitors
• Embrace web technology to achieve seamless
  integration
• Become a customer-centric company by organising
  around different customer segments
• Build culture and talent to compete in the new
  economy

18
Strategic Imperatives
Accelerate the growth program across 3 horizons
Radical transformation of the business
Improve sustainability of core franchises

• Continue to expand leadership in Corporate
• Complete domestic Personal footprint
• organically
• infill acquisitions
• Address retail funds management strategic
  position
• Medium-term search for transformational moves
• Improve capacity to participate in industry
  consolidation on our terms

19
Financial Goals Going forward

• Earnings per share growth that outperforms the
  average of our peer banks
• Increase Return on Equity Target 20
• Cost income ratio comfortably below 50
• Inner Tier 1 ratio approaching 6
• Maintenance of credit rating in AA category

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Copy of Presentation available on www.anz.com
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The material in this presentation is general
background information about the Banks
activities current at the date of the
presentation. It is information given in summary
form and does not purport to be complete. It is
not intended to be relied upon as advice to
investors or potential investors and does not
take into account the investment objectives,
financial situation or needs of any particular
investor. These should be considered, with or
without professional advice when deciding if an
investment is appropriate. For further
information visit www.anz.com or contact David
Ward General Manager Office of the Chief
Executive ph (613) 9273 4185 fax [phone]
4091 email david.ward_at_anz.com