ANZ Shareholder Strategy Update

Specialisation, eTransformation and Growth

John McFarlaneChief Executive Officer

Brisbane18 August 2000

ANZ has now built a solid foundation

• Competitive cost structure – cost to income ratio at low 50s

• Demonstrated ability to make bold portfolio moves (Grindlays sold, ANZIB reconfigured, retail stockbroking sold)

• Demonstrated ability to execute fast against important imperatives (cost & risk positions transformed over 2 years)

• Most businesses displaying strong underlying momentum

• High calibre, committed, dynamic management team

Group strategic direction built on specialisation, eTransformation and growth

Proposition

1 Integrated financial services firms will lose to specialists over time

2 The rise of specialists and new technologies will deliver superior customer value and erode margins

3 For ANZ more value will be created through focus and leverage of intangible assets than traditional concentration plays

Strategy

1 Reconceive and develop ANZ as a portfolio of specialist businesses

2 Become an “eBank with a human face”

3 Create a portfolio of high growth businesses which leverage capabilities and brands

Globalisation

Internet

Oldeconomy

Globalnew

economy

We are experiencing very profound change

Technology is driving costs down

Elapsed time for 100kb transfer Cost of a 3-minute telephone call from New York to London

Index, 1980=100

0.1

1

10

100

1980 1985 1990 1995 2000 2005

0

50

100

150

200

250

300

1930 1940 1950 1960 1970 1980 1990 2000

1996, $

A disaggregated approach is required

HousePurchase

Product Manufacturing

Sales &Marketing

CreditCard

WealthMgmt

CashDeposit

YodleeQuicken

EDSIBM

Distribution Channels& Processing

CustomerNeed

FidelitySchwab

CountrywideAHL

MBNANextCard

EggING

Many Australian institutions focused on consolidation stage

USA

EUROPE

AUSTRALIA

ASIA

leading to globalisation

consolidationFragmentation . . . to . . . and specialisation

Leading to globalisation

Strategy 1: Reconceive ANZ as portfolio of specialist businesses

• Make each of our 21 businesses a specialist in its own right

• Establish three new stand alone customer businesses - Wealth

Management, Small Business and General Banking

• Accelerate the growth of our strong product monoline businesses

• Move towards open architecture, selectively over time

• Manage the portfolio and brands actively from the centre

Contribution balanced between personal and corporate, and product and customer

International

PersonalCorporate

Other

0

100

Personal

Cards

Wealth Mgmt

Mortgages

Funds Mgmt

General Banking

Small Business

0

100

Corporate

Corporate

Foreign Exchange

Asset Finance

Capital Markets

Institutional

Structured Finance

Transaction Services

0 100AsiaPacific

%%

* Excluding Grindlays

738m*

37m*

368m 311m

International

CustomerBusinesses

Shaded

Share of Primary Relationshipswith Middle-Market Companies

0%

10%

20%

30%

ANZ NAB WBC CBA

ANZ: a leader in Corporate Banking#1 Best Bank in Australia US Global Finance Magazine 1999

6

6.5

7

7.5

8

8.5

1995 1996 1997 1998 1999

Source: Corporate Banking Roberts Research Group

Overall Satisfactionwith Bank

ANZNABCBAWBC

Share of Credit Card Spend

15

20

25

30

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

Momentum in Personal Financial Services

%

10

11

12

13

14

15

Jun-94 Jun-96 Jun-98

Mortgage Market Share%

Apr-00

Distribution model

“Make what we sell and sell what we make”

ANZ Manufactureie Mortgages

ANZ Distributionie Branches

Customers

Distribution models

“Make what we sell and sell what we make”

Open Architecture

ANZ Manufactureie Mortgages

ANZ Distributionie Branches

Customers

ANZ Manufactureie Mortgages

ANZ Distributionie Branches

Customers

OtherManufactures

Other Distributionie Mortgage Brokers

Group strategic direction built on specialisation, eTransformation and growth

Proposition

1 Integrated financial services firms will lose to specialists over time

2 The rise of specialists and new technologies will offer superior customer value and will erode margins

3 For ANZ more value will be created through focus and leverage of intangible assets than traditional concentration plays

Strategy

1 Reconceive and develop ANZ as a portfolio of specialist businesses

2 Become an “eBank with a human face”

3 Create a portfolio of high growth business which leverage capabilities and brands

-60%

-90%

Time required to find a high rate certificate of deposit

Minutes

Telephone

WWW

WWW + agent 1

10

25

Technology transforms what customers expect

Strategy 2 : the “eBank with a human face”

Better ServiceLower Costs

Automated, seamless Straight-through Processing

Single IP Network

Cus

tom

er

Man

agem

ent

Web enabled Channels Standard PlatformsCustomers

anz.com

0

50,000

100,000

150,000

200,000

250,000

300,000

Oct-99 Feb-00 Jun-00

Australia

New Zealand

Internet Banking Signups

10.28.9 8.9

7.9

5.1

ANZ WBC NAB St G CBA

Internet Banking Users% of Total Relationships

0

100

200

300 Index: 100 = average retail customer

Number of Products

Lending Balance

Deposit Balance

Profit Attrition

Internet Banking Customers

0

500

1000

1500

2000

Oct-99 Feb-00 Jun-00

Online Applications - Credit Cards

myanz.com

Proposition

1 Integrated financial services firms will lose to specialists over time

2 The rise of specialists and new technologies will offer superior customer value and will erode margins

3 For ANZ more value will be created through focus and leverage of intangible assets than traditional concentration plays

Strategy

1 Reconceive and develop ANZ as a portfolio of specialist businesses

2 Become an “eBank with a human face”

3 Create a portfolio of high growth business which leverage capabilities and brands

Group strategic direction built on specialisation, eTransformation and growth

Strategy 3: Create growth businesses

• Build from our strong corporate franchise by creating new businesses in corporate ePayments and eProcurement

• Strengthen our consumer proposition through building on our early eCommerce momentum, creating strong core offers and new businesses

• Extend our leadership in the Pacific by replicating our model in new countries

• Leverage our consumer and corporate eCommerce and Cards capabilities by partnering to build new businesses in Asia

• Build a small number of regional and/or global niches which leverage our capabilities

• Be very selective about acquisitions, considering only those which add strategically to individual businesses or enhance capabilities and create value

Web-enabling ANZ

Directors on lineDirectors on lineDirectors on lineDirectors on lineSales & Service Sales & Service

PlatformPlatform

ERPERP

ASTASTReal Time Real Time

Loan ApprovalsLoan Approvals

B2C

B2B

Internal

VIPS

ANZ in 3-5 years

• Leading positions in a number of specialist businesses in Australia, New Zealand and Asia

• Portfolio of businesses likely to be narrower and more focused

• A performance orientated driver of individual businesses

• Portfolio actively re-shaped by the corporate centre

• Multiple strategic alliances

• A range of growth businesses and options

• A leader in eCommerce

• Higher market to book ratio

Financial goals

• Earnings per share growth above peer average

• ROE above 20%

• Cost income ratio comfortably below 50%

• Inner Tier 1 capital approaching 6%

• Maintaining rating in AA category

For more informationvisit anz.com