JB Were Private Client Forum Presentation. Australia and New Zealand Banking Group Limited September 2003

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1 JB Were Private Client Forum Presentation Australia and New Zealand Banking Group Limited September 23

2 The Australian banking sector Top 5 banks account for more than 25% of the ASX Banks provide above average dividend yields* 4.7% 6.4% 5.% 8.5% 4.% 1.7% 4.9% 3.% 2.% 1.% 73.8%.% ANZ CBA NAB SGB WBC All Ordinaries Australian Banks *Source - DataStream Bank dividends generally fully franked, average All Ordinaries franking at 64% 2 JB Were Private Client Briefing

% 1999 2 21 22 23 ANZ CBA NAB SGB WBC All Ordinaries Australian Banks *Source - DataStream

3 Australian banks have performed well: ANZ has outperformed Average Total Shareholder Return (pa)* 25% 2% 15% 1% 5% % -5% 3 year TSR 5 year TSR 1 year TSR -1% -15% * source: CSFB, ANZ MSCI - Global Dow Jones - US Australian Banks & Finance Index FTSE - UK ASX - Australia ANZ 3 JB Were Private Client Briefing

TSR -1% -15% * source: CSFB, ANZ MSCI - Global Dow Jones - US Australian

4 Performance driven largely by efficiency gains and lending growth 65 6 Cost to Income Ratio Australian Credit Growth % Annual Growth NAB CBA WBC ANZ 25% 2% 55 15% 5 1% 5% 45 ANZ Target % % Mar-89 Mar-91 Mar-93 Mar-95 Mar-97 Mar-99 Mar-1 Mar-3 4 JB Were Private Client Briefing

25% 2% 55 15% 5 1% 5% 45 ANZ Target % 4 1997 1998 1999 2 21 22-5% Mar-89

5 Credit growth is expected to remain positive Business lending growth lags business investment Housing credit growth likely to be lower Annual % change 4 % growth Forecast 35 Real Gross Business Investment* Housing credit Forecast Business Lending Volumes House prices *including replacement investment Source ABS, 5 JB Were Private Client Briefing Source RBA,

credit Forecast -5-1 -15 Business Lending Volumes 15 1 5 House prices -2 86 88 9 92 94 96 98 2 4 6 *including

6 but other challenges remain Diminishing returns from efficiency gains, focus turns to revenue growth Factors which may impact growth potential Near term Longer term > Interest rate environment > Slowdown in mortgage growth >Stronger AUD > Credit card interchange reform > Globalisation > Mature domestic economies >Demographics 6 JB Were Private Client Briefing

rate environment > Slowdown in mortgage growth >Stronger AUD > Credit card interchange

7 ANZ is well placed to meet market challenges ANZ has positioned itself to meet market challenges through: Efficiency and structural flexibility First mover on cultural transformation journey Highly respected management team Unique specialist business model Diversified portfolio of businesses 7 JB Were Private Client Briefing

cultural transformation journey Highly respected management team Unique

8 Specialists win over generalists but returns are more volatile A Boston Consulting Group study reported that; % Average ROE Generalists focus on size and scale as the basis of competition Specialists insight is on speed, focus and flexibility % Generalists 1.6 Specialists Average Volatility (standard deviation in TSR) Generalists Specialists Specialist business units encourage product and process innovation Specialists are more volatile A portfolio of specialist businesses reduces total volatility 8 JB Were Private Client Briefing

8 Generalists focus on size and scale as the basis of competition Specialists insight is on speed, focus and flexibility % 3 25 2 15 1 5

9 ANZ has developed a rich portfolio of specialised businesses A specialist portfolio, each with a distinctive strategy Portfolio approach reduces volatility of returns Standard Deviation in NPAT Growth Sep to Mar 3 High Market Attractiveness Low Weak Asia Small Bus Personal Banking ING JV/ Wealth Mortgages Current ANZ Position Cards Pacific Institutional & Investment Banking Corporate Asset Finance Strong Cards 18.1 Mortgages 7.6 Corporate 2.8 ANZ Group Size of bubble representative of contribution to group performance 9 JB Were Private Client Briefing

6 25 Market Attractiveness Low Weak Asia Small Bus Personal Banking ING JV/ Wealth Mortgages Current ANZ Position Cards Pacific Institutional &

10 A case study of our strategy in action SME Banking Staff satisfaction precursor to improved customer satisfaction and financial performance First business unit to put all staff through Breakout program to help drive cultural change % Staff satisfaction significant improvement achieved Benchmark Shift from administration to sales focus Increased commitment to human capital - new graduates growth from 4 in 2 to 36 in 'Mar 1 Mar-2 Mar-3 1 JB Were Private Client Briefing

6 Staff satisfaction significant improvement achieved Benchmark Shift from administration to sales focus Increased

11 improved customer satisfaction helping deliver better financial performance % Improving customer satisfaction Benchmark 'Sep 1 Mar-2 Sep-2 Mar-3 $ H Helping drive higher profits 2H 1H 1 2H 1 1H 2 2H 2 1H 3 Customer first mindset Strong growth from both existing and new customers Competitive customer proposition Continue to exceed target of 15%+ pa NPAT growth 11 JB Were Private Client Briefing

2H 1H 1 2H 1 1H 2 2H 2 1H 3 Customer first mindset Strong growth from both existing and new customers

12 The ANZ investment proposition AUD m NPAT Growth # A unique portfolio of specialist businesses, delivering sustainable returns $.9 $.8 $.7 $.6 $.5 $.4 $.3 $.2 $.1 $ Dividend Growth 65% 62%.46 59% % 53% % Good progress on Cultural Transformation Increased focus on growth Continuing risk reduction Interim Div (LHS) Payout Ratio (RHS) Final Dividend (LHS) # - market consensus earnings 12 JB Were Private Client Briefing

13 Copy of presentation available on

14 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 or contact Simon Fraser Head of Investor Relations ph: (613) fax: (613) simon.fraser@anz.com 14 JB Were Private Client Briefing

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

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