Delivering for ShareholdersDelivering for Shareholders

Australia and New Zealand Banking Group LimitedAustralia and New Zealand Banking Group Limited

Peter MarriottChief Financial OfficerFebruary 2000

Briefing OutlineBriefing Outline

Review of ANZ’s 1999 Results

- Financial Perspective

- Business Perspective

Outline Group Strategy with particular focus on Personal Financial Services strategy.

1999 - A Good Year for ANZ1999 - A Good Year for ANZ

EPS 90.6c up 17%. TSR up 19.6%

NPAT $1,480 million up underlying 18%

Return on Equity up to 17.2% (15.5%). ROA 1.0% (0.8%)

Costs down 4%. Cost income ratio down to 55.0% (60.9%)

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

$500 million share buyback

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

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

Income42

Lower Costs

83

Software Capitalisation

61

Higher Provisions

(23)

Increased Tax (136)

1,480

$m

PostAbnormals

1998

PreAbnormals

1998

1999

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

Delivering on Cost ReductionDelivering on Cost Reduction

50

60

70

1993 1994 1995 1996 1997 1998 1999

Cost Income Ratios %

ANZ

WBC

CBA

NAB

0

20

40

60

80

100

1996 1999

1997 1998 1999

1997 1998 1999

FX

Interest

Reducing RiskReducing RiskUS$b Asian

Exposure

Market Risk (VaR - Ave)A$m2323

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: ELP > SP at Group Provisioning: ELP > SP at Group LevelLevel

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

Surplus over APRAGuideline

Capital Strategy Capital Strategy

Active capital management Maintain AA status and peer ratings

Tier 1 (6.5 - 7.0%) Inner Tier 1 (6.0% - 6.5%)

$500 million on-market buyback Major international acquisitions

unlikely NZ Tracking Stock Issue in May

Capital Adequacy Ratio%

Inner Tier 1

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

Business on TrackBusiness on Track

Strategic re-positioning on track in all segments

Good earnings growth in Australia and New Zealand

Business mix substantially improved. High risk businesses exited

Domestic market share up notwithstanding cost focus

140,000 Internet banking customers (8000). ANZ E*Trade launched

Major technology projects completed on time, on budget

Business Mix ImprovedBusiness Mix Improved

0

500

1000

1500

1998 1999

Business Segment Profit After Tax

Other

International

Corporate

PersonalUp 33%

Up 17%

Down 20%

Business Segment Proportion

Personal

Corporate

InternationalOther

$m

Total Market Share

Share of Credit Cards

10

12

14

16

18

20 %

ANZ

NABCBA

WBC

10

11

12

13

14

Jun-94 Mar-97

Share of Housing Lending%

10

12

14

16

18

20

Jun-94 Mar-97

% Share of Business Lending %

19931988 1998

15

20

25

30

Jun-94 Mar-97 Nov-99

Nov-99

Nov-99

Gains in Australian Market ShareGains in Australian Market Share

Overall Strategic Direction in PlaceOverall Strategic Direction in Place

Balance business mix towards consumer and low risk Personal offers greatest growth and earnings potential Leading position in corporate to be leveraged International to be simplified and focused A leading presence in e-Commerce to be established

Transform management process to deliver EVA Withdraw from high-risk and non core segments Improve performance in suboptimal businesses Invest in high growth revenue streams Hold costs flat Optimise capital efficiency

Strategy for PersonalStrategy for Personal

Aggressively build market position in all consumer segments

An intergrated financial services approach

Special focus on insurance and retail funds management

Differentiated service propositions by customer segment

Build strong product businesses

Continue intense focus on cost management

Build a leading consumer e-Commerce capability

Integrated Personal Financial Integrated Personal Financial ServicesServices

Estimated Value of An Australian Retail Customer (A$ Present Value)

Risk/Wealth Protection

Traditional Banking

$6000 - 7000

Investment

General Insurance & Traditional Life

1989 1997 2005

Banks/NFI

Managed Funds

Household Financial Assets

1000

2000

3000

$b

ANZ Has a High Quality Personal ANZ Has a High Quality Personal Customer BaseCustomer Base

0 10 20 30 40 50 60 70 80 90 100

Industry Ave

ANZ

20 100 200 500 100060

Total Relationships (%)

Wealth Bands

Source: Roy Morgan 1998

Other

$(000)

The Opportunity with Australian The Opportunity with Australian ConsumersConsumers

Source: Roy Morgan 98

All ANZ Customers

High Value to ANZ

High Value to

Industry but limited

ANZ business

True Retail

Market

CustomerBase 2.7m

A New Dedicated Business for A New Dedicated Business for Premier CustomersPremier Customers

Premier Financial Package Dedicated Managers Premier Suites Dedicated Service Officers

A fundamental shift to a customer-centric strategyA fundamental shift to a customer-centric strategy

Segmented Customer Service Segmented Customer Service Propositions will now Drive DeliveryPropositions will now Drive Delivery

High ValueCustomers

Low ValueCustomers

New Segmented approach

Customer Revenue curve

Traditional uniform cost to serve

Segmented Customer Service Approach

0%

15%

30%

45%

Apr-99 Jun-99 Aug-99 Oct-99 Dec-99

CBAWBC

ANZ

St GeorgeNAB

9.58.5

7.5

5.2

3.1

ANZ St George Westpac NAB CBA

Market share(% of Australian internet banking users)

Customer takeup rate *(% of customer base)

* Number of internet banking users (Ord Minnett 12/99) / number of main banking relationships(based on Ray Morgan 8/99 data) Source: Ord Minnett, Ray Morgan

Leveraging Technology: anz.comLeveraging Technology: anz.com

International - Simplify and FocusInternational - Simplify and Focus Re-balance business mix towards

consumer Reduce cross border risk

Target Top 2-3 foreign or Top 5 local position Leverage strong positions/ global capabilities Deal with minor positions

Develop Asia-Pacific, e.g. Indonesia Pursue acquisitions only where it creates

a desired position - likelihood of our making a major international acquisition this year is low

Continue to Reduce Risk

Target Fewer, Deeper

Positions

Create Future Growth

Platforms

New Lending Policies

Latin American Offices Closed

25% Interest in Panin, Cards acquisition

Increase ROE towards 20% target Target flat costs. Achieve 53% cost income ratio Improve asset quality, particularly International Progress towards target capital range Set stretch performance targets and linked incentives Target highest increase in e-Commerce customers No surprises

Continue to Deliver in 2000Continue to Deliver in 2000

Positive view on world economy

Australian economy strong but slowing slightly

Business tracking close to our expectations, comfortable with “Street” expectations

Abnormal writedown of FITB of $60m from tax changes – will be partially offset by abnormal gains

OutlookOutlook

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

9041604578

3,021872157158422

1,60942

1,651

252352764

-764

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

Management TeamManagement 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