1999 Annual Results1999 Annual Results

Australia and New Zealand Banking Group LimitedAustralia and New Zealand Banking Group Limited3 November 1999 3 November 1999

Shareholder HighlightsShareholder Highlights

Earnings per ordinary share 90.6c (77.2c) up 17%

Dividend 56 cents, up 8%

Franking increased to 75% interim, 80% final (60%)

Total shareholder return 19.6% (-15.6%)

$500 million share buy-back

Financial HighlightsFinancial Highlights

NPAT $1,480 million versus $1,106m ($1,175 before abnormals)

Income up 6%, costs down 4%, ELP up 5% (SP down 6%)

Return on Equity 17.2% (15.5%)

Cost income ratio 55.0% (60.9%)

ROA 1.0% (0.8%)

Risks reduced. Gross non-accruals down 7%, net down 27%

Earnings quality improved. No Abnormals. No Surprises

18.3

15.516.9 17.2

1996 1997 1998 1999

724428

900657

501

444

762886

1996 1997 1998 1999

Significant Improvement AchievedSignificant Improvement Achieved65.8

60.963.1

55.0

1996 1997 1998 1999

0.900.80

0.901.0

1996 1997 1998 1999

ROE % Cost Income Ratio %

ROA % Gross and Net Non-Accruals $m

1,225

872

1,6621,543

Business HighlightsBusiness Highlights

Strategic re-positioning on track in all segments

Good earnings growth in Australia and NZ

Business mix substantially improved. High risk businesses exited

Domestic market share up notwithstanding cost focus

105,000 internet banking customers (8,000). ANZ E*TRADE launched

Major technology projects completed on time

Improving Business MixImproving Business Mix

1998 1999

Business Segment Profit After Tax

Other

International

Corporate

PersonalUp 33%

Up 17%

Down 20%

Business Segment Proportion

Personal

Corporate

InternationalOther

0

40000

80000

120000

Oct Jan Apr Jul Oct

0

10

20

30

40

May Jun Jul Aug Sep Oct

Leveraging Technology: anz.comLeveraging Technology: anz.comRegistrations

Days Required to Add 10,000 Customers

Online application for all major products

ePos service for merchants New Edify Internet Banking

platform Alliances with Excite & Yahoo ANZ e*TRADE alliance Esanda 10% stake in Autogroup “Pay Anyone” open payments eGate business payments

platform Internet Banking launched in NZ

Achieve growth in Personal and Business Banking Enhance focus on Premier, Small Business, Retail Funds Improve asset mix and return in Corporate Complete re-positioning of International, turn around sub-

optimum businesses Build anz.com market position to domestic leadership

Business StrategyBusiness Strategy

Increase ROE. Add RORWA to EVA as key measure Target flat costs. Lower cost income ratio Improve asset quality, particularly International Achieve an optimal capital structure Set stretch performance targets and linked incentives Successfully manage the Y2K transition Target highest increase in e-Commerce customers No surprises

Continue to Deliver in 2000Continue to Deliver in 2000

Drivers of PerformanceDrivers of Performance

15.517.2

1998 1999

0.81.0

2.37 2.46

1.4 1.57

2.29 2.22

0.32 0.34

2.97 3.05

60.9 55

0.45 0.43

ROA

ROE

NII/Interest Earning AssetsNet Interest

Assets

Other IncomeAssets

CostAssets

ProvisionsAssets

Leverage

Risk

Business Mix

Cost/Income

Provisions/NLA

Good Progress Across the BoardGood Progress Across the Board

900

1000

1100

1200

1300

1400

1500

1600

1700

1,106

Abnormal Items

69 1,175

Net InterestIncome Growth

98

Lending Fee Growth

87

Other Fee Growth

93

Growth in Other Income

42

Lower Costs83

Software Capitalisation

61

Higher Provisions

(23)

Increased Tax (136)

1,480

$m

PostAbnormals

1998

PreAbnormals

1998

1999

Margins Stable as Balance Sheet Re-positionedMargins Stable as Balance Sheet Re-positioned

Net Interest A

verage Margins

Ave

rage

Inte

rest

Ear

ning

Ass

ets

0

50

100

150

1996 1997 1998 1999

0

1.5

3

4.5

%

$b

Australia

0

20

1998 1999

New Zealand

0

20

40

1998 1999

International

0

40

80

1998 1999

Mar-97 Sep-97 Mar-98 Sep-98 Mar-99 Sep-99

80102 62 44 45

275

418

111

116

295

471

126

116

286

488

196

96

306

494

177

333

517

180

91

346

558

160

78*

* Sept 98 trading loss of 145m, Other income of 139m

Other

FX

Other Fees

Lending Fees

Trading

Non Interest Income Non Interest Income Steady Growth, Better QualitySteady Growth, Better Quality

Costs and Cost Income Ratio LoweredCosts and Cost Income Ratio Lowered

50

60

70

1993 1994 1995 1996 1997 1998 1999

Cost Income Ratios %

ANZ

WBC

CBA

NAB

*NAB & WBC first half

Improving Business MixImproving Business Mix

36.8 42.8

77.680.7

35.4 25.5

1998 1999

167

200189

238

1042819

0

200

400

600

800

1000

1200

1400

1600

1998 1999

Australia

New Zealand

Overseas

Geographic Profit After Tax Balance Sheet Assets

Overseas

Other Domestic

Mortgages

A$mA$b

150 149

Gains in Australian Market ShareGains in Australian Market ShareTotal Market Share

Share of Credit Cards

10

12

14

16

18

20 %

ANZ

NABCBA

WBC

10

11

12

13

14

Jun-94 Apr-96 Feb-98

Share of Housing Lending%

10

12

14

16

18

20

Jun-94 Apr-96 Feb-98

% Share of Business Lending %

19931988 1998

15

20

25

30

Jun-94 Apr-96 Feb-98 Aug-99

Aug-99

Aug-99

0

20

40

60

80

100

1996 1999

1997 1998 1999

1997 1998 1999

US$b

FX

Interest

Reducing RiskReducing RiskUS$b

Asian Exposure

Market Risk (VaR - Ave)A$m 2323

AAA-BBB+

BBB

BB

BB-<B+

$65b $90b

Australian Lending Asset Profile

7

11.5

6.1 5.6%

Equities

0

500

1000

1500

2000

2500

3000

1994 1995 1996 1997 1998 1999

Gross Non-Accrual Loans

Non-Accrual LoansNon-Accrual Loans

Net Non-Accrual Loans

As at 30 September $mGross Net Cover

Australia 623 345 44%New Zealand 50 30 40%International 870 282 65%

$m

Provisioning: Personal & Corporate Provisioning: Personal & Corporate Offset InternationalOffset International

103

217

155

79109

301

110

219

154

96111

247

0

50

100

150

200

250

300

350

1998 1999 1998 1999 1998 1999

ELP SP

Personal Financial Services

Corporate Financial Services

International

$m

Specific Provisions by RegionSpecific Provisions by Region

Asia

Australia & NZMiddle East

UK/EuropeSouth Asia

Asia

Australia & NZ

Middle East

UK/EuropeSouth Asia

1998$512m

1999$482m

Provisioning: ELP > SP at Group LevelProvisioning: ELP > SP at Group Level

ELP - Economic Loss ProvisionSP - Specific Provision

Sep 98 Sep 99 APRAGuideline

ELPCharge

Net SPTransfer

1395

0

300

600

900

1200

1500

1800

2100

1401

510 482

967

$m

FX Impact

Buyback to Reduce Capital Surplus Buyback to Reduce Capital Surplus

Capital Management Philosophy: Capital scarce resource to be managed

effectively and efficiently Maintain capital consistent with ANZ’s

AA status and peer group ratings Tier 1 (6.5 - 7.0%) Inner Tier 1 (6.0% - 6.5%) aligned

to Economic Capital $500 million buyback

Capital Adequacy Ratio%

Tier 1 APRA minima

0

2

4

6

8

10

12

1996 1997 1998 1999

Hybrid

10.7

7.9

Economic Value Added (EVA)Economic Value Added (EVA)

Net Income 5,966

Operating Expenses (3,294)

ELP Charge (510)

Tax (676)

Franking & Other Adjustments 352

Adjust Profit 1,838

Cost of Capital* @ 11% (1,004)

EVA 834

* Hurdle of 15% used in internal models

$ million

The material in this presentation is general background information about the Bank’s 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 (613)9273 4091 email david.ward@anz.com

Sep-99

Profit & LossProfit & LossA$M Sep-97 Sep-98Net Interest Income 3,437 3,547

Fees 1,459 1,574FX 237 373

Trading Securities 182 <83> Other 232 235

Net Income 5,547 5,646Expenses Personnel 1,949 1,854

Premises 362 347Computer 330 341

Other 771 776Restructuring Costs 90 120Total Expenses 3,502 3,438Profit Before Provisions 2,045 2,208Doubtful Debts 400 487Tax 466 537NPAT Before Abnormal Items 1,171 1,175Abnormal Items <147> <69>NPAT and Abnormal Items 1,024 1,106

3,6451,754

34089

138

5,9661,732

31434481391

3,2942,672

510676

1,480-

1,480

Non Interest Income 2,110 2,099 2,321

Profit Before Provisions 1,024 1,021 1,164 1,044 1,302 1,370

Mar-99

Profit & LossProfit & LossA$M Mar-97 Sep-97 Mar-98 Sep-98Net Interest Income 1,718 1,719 1,773 1,774 1,811

Fees 693 766 774 800 850FX 111 126 196 177 180

Trading Securities 80 102 62 <145> 44 Other 116 116 96 139 60

Net Income 2,718 2,829 2,901 2,745 2,945Expenses Personnel 954 995 972 882 860

Premises 184 178 172 175 157Computer 173 157 168 173 186

Other 383 388 385 391 391Sub Total 1,694 1,718 1,697 1,621 1,594Restructuring Costs - 90 40 80 49Total Expenses 1,694 1,808 1,737 1,701 1,643

Doubtful Debts 197 203 237 250 258Tax 243 223 298 239 324NPAT Before Abnormal Items 580 591 625 550 716Abnormal Items <31> <116> - <69> -NPAT and Abnormal Items 549 475 625 481 716

Sep-991,834

904160

4578

3,021872157158422

1,60942

1,651

252352764

-764

Non Interest Income 1,000 1,110 1,128 971 1,134 1,187

Strong Management TeamStrong Management Team John McFarlane CEO Citibank, Standard Chartered David Boyles CIO AMEX, BOA Roger Davis Corporate Citibank Peter Hawkins Personal ANZ Peter Marriott CFO ANZ, KPMG Greg Camm Mortgages ANZ Larry Crawford Distribution First Bank Systems, Wells Fargo Bob Edgar Business Bank ANZ Kathryn Fagg Banking Products McKinsey & Co Brian Hartzer Cards First Manhattan Elmer Funke Kupper International McKinsey & Co Mark Lawrence Risk Soc Gen New York Peter McMahon Asset Finance ANZ, Costain Grahame Miller ANZIB ANZ Elizabeth Proust People Victoria Public Service Alison Watkins Strategy McKinsey & Co