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

ANZ

Delivering for Shareholders

Presentation to CLSA Investors’ Forum 2000 John McFarlane, Chief Executive Officer

16 May 2000

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 Headquarters100 Queen StreetMelbourne

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

ANZ Delivers on Financial Commitments

Financial Performance

60

80

100

120

1997 1998 1999 Mar-00

0

2

4

6

8

10

1997 1998 1999 Mar-00

EPS Tier 1 Ratio

5

10

15

20

1997 1998 1999 Mar-00

ROE

0

5

10

15

20

25

30

35

40

1998 1999 Mar-00 ProForma

Lending Mix

50

55

60

65

70

1997 1998 1999 Mar-00

Cost Income Ratio%

WBC

CBAANZNAB

%

Emerging Markets

Mortgages

¢

%

%

Business Unit Performance

0

50

100

150

200

250

300

350

400

Personal Corporate International Other

1H99 2H99 1H00

A$ Personal 45%

Corporate 38%

International 9%Other 8%

Change in Profit

600

700

750

800

850

$m

650

Second Half1999

First Half2000

Net InterestIncome

34

Lending Fee20

Other Fee Growth

30

Other Income

17

Doubtful Debts

(4)Costs

(9)Tax(34)

PropertyRevaluation

30

Sale ofStrategic

Investments33

Restatement ofDeferred Tax

Balance(64)

764

817

Significant one off items(1)

Improving Asset Quality

General Provision

0

500

1000

1500

2000 Foreign Exchange

Impact

(18)

Surplus

$m

Non Accrual Loans

Sep 99 Mar 00 APRA Guidelines Minimum

Specific ProvisionsNet Non Accrual Loans

1997 1998 1999 1H00

428

444

900

762

657

886

554

871

$m

Net Transfer to

Specific Provision

(197)

ELP Charge

256

1395 1436

944

0

2

4

6

8

10

12

1997 1998 1999 1H00 Target

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

Capital Management a Priority

Ratios

Hybrid Tier 1Inner Tier 1 Net Tier 2

%

Outcomes

Mortgage & cards share upPersonal 45% of group profit FM challenging, new team

Leadership position enhancedROA 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

Good Progress on Business Strategies

14.3

11 10.3 10.2

4.9

ANZ WBC St George NAB CBA

Share of Credit Card Spend

10

11

12

13

14

Jun-94 May-96 Apr-98 Mar-00

Share of Housing Lending% %

15

20

25

30

Jun-94 May-96 Apr-98 Mar-00

Momentum in Personal

Internet Banking Usersas % of Main Relationships

Source: Ord Minnett and Roy Morgan Research

0

80000

160000

240000

Oct Jan Apr Jul Oct Jan Apr

Internet Banking Registrations

1999 20001998

Leadership in Corporate

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

Business Banking Relationships AustralianMarket Share 1999 (%)

26 26

1619

ANZ NAB CBA WBC

7.5

7.2 7.2

7

ANZ NAB CBA WBC

Customer Perception of Service Delivery 1999 (out of 10)

Sale of Grindlays

Price US$1.3 (A$2.2)bn– Net Asset Value US$590 (A$990)m– Goodwill US$750 ($A1,250)m

Dividends $US0.5 (A$0.9) 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

ANZ Profile

Group Growth Grindlays

Assets $167b $14b $10b

Profit $817m $53m $79m

Staff 28,940 -1231 5400

Representation 39 14

ANZ Headquarters100 Queen StreetMelbourne

Delivering via the Web B2C

B2B

IdentrusFX On-line(ANZ On-Line)

FX On-line(ANZ On-Line)

E-ProcurementE-Procurement

Employee PCsEmployee PCs

operations.com

Sales & Sales & Service Service

PlatformPlatform

Directors on lineDirectors on line

ERPERPTransformation

Enterprise Resource Planning

Improve sustainability of core franchisesImprove sustainability of core franchises

Strategic Imperatives

Accelerate the growth program across 3 horizonsAccelerate the growth program across 3 horizons

Radical transformation of the businessRadical transformation of the business

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






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

Improve sustainability of core franchisesImprove 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

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

Copy of Presentation available on

www.anz.com

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 WardGeneral Manager Office of the Chief Executive

ph: (613) 9273 4185 fax: (613) 9273 4091 email: [email protected]

Documents

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