Growth in our Corporate Portfolio

1
Growth in our Corporate Portfolio
Presentation to UBS Warburg Financial Services
Conference Sydney, 6 June 2001 Roger
Davis Group Managing Director Australia and New
Zealand Banking Group Limited
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ANZ is executing a distinctive strategy
Proposition
Strategy
Implications

Entrepreneurial

Reconfigure ANZ

Specialist
specialists create
as a portfolio of 16
approach to
Specialise
more value
specialist
customer and
businesses
product
businesses

Corporations

An e-Bank with a

Transform the
must embrace
human face
way we do
e-Transform
new technologies
business with IP
technology

Value depends on

Drive results,

Meet
Perform Grow
performance,
invest in growth
expectations,
Breakout
growth and
businesses and
fund growth by
breaking out
create new
cost reduction,
paradigms
transform
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ANZs Corporate business is undertaking a similar
transformation

• Reorganised into separate customer and product
  centric businesses
• Created 9 distinctive industry segments in the
  Institutional sector
• Secured a 1 rating for banker quality, creative
  ideas and knowledge
• Maintain top 3 leadership position in FX (1)
  Derivatives (1/2) non-vanilla Securitisation
  (1) CP (1) Syndications (1)

• e-Enable commodity functions and processes
• Trade - Magellan/Proponix
• FX - Atriax FX On-line
• Capital Markets Aus Markets
• Cash Web-Pay Identrus PKI
• Procurement ANZ e-Biz MRO Mosaic

• Customer Obsession leverage centricity and
  market penetration (1)
• Share of Wallet v- Share of Market Emphasis
• Product driven growth initiatives
• Double earnings by 2004

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Transforming ANZ through Perform, Grow and
Breakout

Focus
long term destiny

Benchmark
global industry/players

Looking for
transforming moves
Break out

Horizon
5-10 years

Success
dramatic market cap increase
specialisation and out-growing

Focus
the market

Benchmark
competitors in each business

Looking for
breakout
moves in key
Grow
businesses (eg QTV, Origin)

Horizon
3-4 years

Success
4-5 moves taking share and
worth A1b market cap
each

Focus
performance

Benchmark
market expectations
Perform

Looking for
six monthly delivery

Horizon
1-2 years

Success
meet/exceed expectations
consistently
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The Corporate portfolio plays a major role in
ANZs future
Corporate Businesses (by 1H 2001 NPAT)
ANZ Group Segments
(by 1H 2001 NPAT)
Global Transaction Services
54m
Intnl Subs
15
Global Foreign Exchange
40m
Global Structured Finance
85m
Personal
Global Capital Markets
24m
Corporate
46
39
Institutional Banking
88m
Corporate Banking
65m
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Our strategy is delivering results...
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...and a low risk profile

• Risk actively managed
• Quarterly strategy reports prepared for all high
  risk accounts
• June to October 2000 - all BB rated accounts
  within Corporate reviewed in expectation of
  downturn

Corporate risk grade profile
AAA to BBB
Actual SP v ELP charge
BBB to BBB-
m
BB to BB
BB-
gt B
gtB B, B-, CCC non-accrual
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Credit quality is sound in some of our larger
industry exposures - Australia
Lending Assets (AUDm)
of Portfolio (RHS scale)
in CCR 7D-8G (RHS scale)
in CCR 9-10 (RHS scale)
Manufacturing
Retail Trade
Real Estate Operators Dev.
Accomm. Cafes Restaurants
Construction
Agriculture
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All Corporate units are targeting revenue growth
to exceed cost growth
Cards
High
GFX
GSF
Wealth
Asia
GCM
GTS
ANZ Investments
Asset Fin
Revenue Growth 01-03 CAGR
Nominal GDP Growth
Pacific
Small Bus
Inst Bank
Mortgages
Metro Regional
Cost to Income falling
Corp Bank
Bubble size in proportion to 2001 NPAT
Illustrative
Low
Low
High
Operating Expense Growth 01-03
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We are on track to meet our commitment to double
profit by 2004
Double 1999 NPAT - required CAGR of 15
m
Actual NPAT
Annualised NPAT for 1H 2001
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Our main focus is on growing total wallet share
Focus on deeper
Customers
penetration of existing

• Grow wallet share
• New high value
• products
• New delivery
• mechanisms
• Improved cross-
• sell
• Increased sale of
• 3rd party products

CFS customer base
Potential
revenue 1.3b
5,000
Total wallet
FY 2000 revenue
of ANZ customer
1.7b
base 8.5b
0
20
35
Share of Customer Wallet
source internal estimate
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The elements of our growth
Growth is...
Dynamic Organisational implications

• Non-balance sheet,
• fee income based
• Less capital intensive

• Technology Based
• Growth opportunities can also leverage
  technology
• Atriax, AusMarkets
• Proponix
• PICI
• e-Payments
• Infrastructure plays

• Opportunistic
• New customers
• New products/initiatives
• New geographies

• New Product Focussed
• Credit derivatives
• Infrastructure equity (Morrison)
• Private equity
• Soft base metal commodities
• Securitisation (new)
• Equity derivatives

• Challenging
• Competition
• Limited geographic footprint
• Balance sheet risk
• Time technology
• Regulatory tax accounting
• Customer rich franchise

• Client Constrained
• Wallet share offers better growth opportunities

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Our customer focus is the critical foundation
New technology platforms such as MARS (Management
Analysis Reporting System) provide critical
support for CRM CVM activities
Putting our corporate customers first, is a key
retention service value strategy for us
Source Roberts Research, Survey 2000
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Deepening penetration of our high value,
predominantly fee based products
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Controls are in place to protect synergies and
maximise opportunities
Corporate Financial Services Roger Davis
Accountabilities CFS 50 Group 50
Corporate Banking
Institutional Banking
Transaction Services
Foreign Exchange
Capital Markets
Structured Finance
Grow EVA through efficiency and penetration
Grow EVA through efficiency and penetration
Invest for growth in trade and transactions
Defend FX business and grow selectively
Maximise franchise and grow selectively
Execute strategy selectively
Theme

• Middle market wallet share
• Back office technology and processes
• Staff recruitment and training

• Customer and product interface
• Customer management systems
• Staff recruitment and training

• Trade finance system and benefits
• Streamlined organisation
• Growth strategies for high potential products

• Revenue momentum
• eFX-based initiatives
• Global commodities business

• High IP product growth
• Cost reduction initiatives
• Staff recruitment and retention

• Securitisation and asset sales
• Revenue growth initiatives
• Partnerships and alliances

Priorities
Systems CRM MARS B2B eCommerce Brand Risk
Management
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Summary

• We are performing well
• Our corporate portfolio is lower risk
• We are focussing on non-lending
• fee income as we transition from
• being a balance sheet based
• business to being an intellectual
• capital services firm
• Our new strategy is creating value
• and better positioning us for growth
• We are differentiating ourselves
• through our Breakout program

We are on track to continue growing strongly
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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 Philip
Gentry Head of Investor Relations ph (613) 9273
4185 fax [phone] e-mail
gentryp_at_anz.com
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Copy of presentation available on www.anz.com