Growing our Personal Portfolio

Salomon Smith Barney Conference

Australia and New Zealand Banking Group Limited 19 June 2001

Brian HartzerManaging Director - Cards

Page 2

Building for the future - a distinctive strategy

Proposition

• Entrepreneurial specialists create more value (eg Cards & Mortgages)

• Corporations must embrace new technologies

• Value depends on performance, growth and breaking out

Strategy

• Reconfigure ANZ as a portfolio of 16 specialist businesses

• An e-Bank with a human face

• Drive results, invest in growth businesses and create new paradigms

Perform Grow& Break out

e-Transform

Specialise

Implications

• Specialist approach to customer and product businesses

• Transform the way we do business with IP technology

• Meet expectations, fund growth by cost reduction, transform

Page 3

Transforming ANZ through Perform, Grow and Breakout

Breakout

Grow

Perform

• Focus: long term ‘destiny’

• Benchmark: global industry/players

• Looking for: transforming moves

• Horizon: 5-10 years

• Success: dramatic market cap increase

• Focus: specialisation and out-growing the market

• Benchmark: competitors in each business

• Looking for: breakout moves in key businesses (eg QTV, Origin)

• Horizon: 3-4 years

• Success: 4-5 moves taking share andworth ~AUD1bn+ market

cap each

• Focus: performance

• Benchmark: market expectations

• Looking for: six monthly delivery

• Horizon: 1-2 years

• Success: meet/exceed expectations

consistently

Page 4

Personal Financial ServicesPeter Hawkins

Regional- banking

Wealth Management

Small Business

Mortgages Cards

Drive sales and efficiency

Invest to growAggressively

rebuild

Maintain profitable

growth

Accelerate growth

• Advanced marketing/ segmentation

• Straight through processing

• Lower cost to serve

• Expert advice

• Open architecture

• “Wrap” facility

• Seamless access

• Build profitable market share

• Relationship based proposition

• Redesign end to end process

• Maintain distribution strength

• Straight through processing

• “Best of breed” delivery platform

• Data mining

• Exploit growth opportunities

Th

em

eP

riori

ties

Systems CRM SSP Brand Risk Management

AccountabilitiesPFS 50%Group 50%

Metro-banking

Shared systems and controls are in place to protect synergies

Page 5

Our strategy is delivering results...

Business Unit NPAT

181

45

15

34

58

197

44

14

45

80

191

48

11

58

112

0

50

100

150

200

250

Genera

l Bankin

g

Sm

all B

usin

ess

Wealth

Managem

ent

Card

s

Mortg

ages

Mar-00

Sep-00

Mar-01

233

322333

380

420

150

200

250

300

350

400

450

Mar-99 Sep-99 Mar-00 Sep-00 Mar-01

Personal Portfolio Profit Growth

CAGR - 34%

$m$m

Page 6

We are developing a track record of building growth businesses

-100

0

100

200

300

400

500

600

700

Mar-00 Jun-00 Sep-00 Dec-00 Mar-018

10

12

14

16

10

11

12

13

14

15Mortgage market

share

FM inflows (LHS)

Deposit

market share (RHS)

15

20

25

30 Share of credit card spend

3.4

3.6

3.8

4.0

4.2

Mar-98 Sep-98 Mar-99 Sep-99 Mar-00 Sep-00

Personal customers - Australia

%%

%m

$m

95 0096 97 9998 01 95 0096 97 9998 01

Page 7

Personal business units will continue to be key profit drivers

Operating Expense Growth 01-03

Reven

ue G

row

th 0

1-0

3 C

AG

R

Bubble size in proportion to2001 NPAT

Mortgages

GCM

Metro & Regional

Inst Bank

Wealth

ANZ Investments

GSFGFX

GTS

Asia

Pacific

Corp Bank

Asset Fin

NominalGDP

Growth

Low

High

Low High

Cost toIncome falling

Cards

Small Bus

Illustrative

Page 8

We are developing a strong CRM capability….

INFRASTRUCTURE CAPABILITIES

• Enterprise Customer Data Mart (ECDM)

• Tran$act database

• Customer scoring and decision engine

• Behavioural credit scoring systems

• Campaign Management System

• Front line screen delivery

• Full account and customer NIACC

• Segmentation markers and profiles

• Propensity-to-buy scores

• Application/behavioural scores

• Multiple campaign management

• Call centre, ATM, and SSP integration

• ANZ.com integration

• Multi-product decisioning

• Attrition scores by customer

• Recovery scores

• Automated, event-based campaigns

• Automated prospect list delivery (“My Sales”)

• “Optimal” strategy selection by customer (longer term)

In Pilot/Develop-

ment

In Pilot/Develop-

ment

In PlaceIn Place

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5%

16%

47%

Segment ADeposit

Customers

Segment BEsanda

Segment CMortgages

Event-based Cross-sell(Recent Case Study)

Proprietary Card Cross-sell(Recent Case Study)

100

167

Control Group Propensity to BuyModel

...which is delivering promising results

Index

%

Page 10

Growth opportunities in Personal are substantial

Existing revenue $2.6b

10

0

Customer #’s (m)

40% 50%*

Peer Average

Share of Customer Wallet

Potential revenue $650m

* Average share of wallet for CBA, NAB, SGB, WBC - source: Roy Morgan Research

System Growth

• Underlying credit growth ~ 8-10% pa

Market Share

• Product businesses growing customer numbers and market share

• Customer #’s increasing by 1.0m - translates to $650m in additional revenue pa

Increase Wallet

• Customer businesses deepening wallet share

• $650m revenue gain by matching our peers

– Created customer businesses

- Sales programs- CRM

4

5

Potential revenue $650m

Total potential revenue growth - $1.5b

7.3

Increased wallet on higher share

$160m

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Personal strategy in action: Cards

SpecialiseSpecialise

E-TransformE-Transform• Straight-through-processing already delivering benefits• “Platform of the future” initiative underway• On-line experience enhancements currently rolling out• Best-in-class risk management initiative underway

• Structured as a ‘monoline’ cards business• Line-of–sight focus on Card Issuing, Merchant Acquiring and

Unsecured Personal Loans• #1 Visa issuer in Australia, 27% of spend• Growing share in Merchant acquiring in Australia and New

Zealand

Perform Grow & Breakout

Perform Grow & Breakout

• Consistent track record of high profit/EVA growth• Investing in culture and staff recognition• Leveraging CRM capabilities to maximise cross-sell• ENZ acquisition• Asian expansion (e.g. Hong Kong)• E-Card joint venture

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FINANCIAL PERFORMANCE

$NPAT (m)

70% annual growth rate

Total revenue 276 304 335 21%

Cost/Income 51% 47% 49% 2%Ratio

Change

34

45

58

Mar-00 Sep-00 Mar-01

The Cards business is performing strongly

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Market share (Australia)

Card Issuing Australia Card Acquiring Australia

Market Share - % of total valueof credit transactions

21.4%

19.0%

20.0%

21.0%

22.0%

Mar-00 J un-00 Sep-00 Dec-00 Mar-01

Cards Issuing Marke t Share Index

90

95

100

105

110

115

Fe b -

9 9

M a r -

9 9

A p r -

9 9

M a y -

9 9

J u n -

9 9

J u l -9 9 A u g -

9 9

Se p -

9 9

O c t -

9 9

N o v -

9 9

D e c -

9 9

J a n -

0 0

Fe b -

0 0

M a r -

0 0

A p r -

0 0

M a y -

0 0

J u n -

0 0

J u l -0 0 A u g -

0 0

Se p -

0 0

O c t -

0 0

N o v -

0 0

D e c -

0 0

J a n -

0 1

Fe b -

0 1

90

95

100

105

110

115

Issued A ccounts Gross OutstandingsA pproved Limits Cardholder Spend

Growing share in all segments of our Cards business...

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16.23%15.12%

14.52%

10%

12%

14%

16%

18%

Apr-00

May-00

Jun-00

Jul-00

Aug-00

Sep-00

Oct-00

Nov-00

Dec-00

Jan-01

Feb-01

Mar-01

Apr-01

Credit transactions

Eftpos NZ Acquisition - 3% + market share gain in 12 months

Market share of acquiring (NZ only)

...assisted by selective acquisitions

13.5%

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Meet Freddy …

…and product innovation which is recognised internationally

First Place: Qantas Telstra Visa Card (Australia)

Second Place: Qantas Telstra ANZ Visa Card (NZ)

Third Place: Amex

“Best Frequent Traveller Credit or Charge Card (International)”*

* source: InsideFlyer Magazine, 2001

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59%

67%

75%

40%

45%

50%

55%

60%

65%

70%

75%

80%

1999 2000 2001

Meet Freddy …

Cards staff satisfaction levels

Investment in cultural change is creating a dynamic environment

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Leveraging distinctive capabilities into international markets

• Launch April 2001

• Target: Hong Kong platinum market

• Niche product with unique features to attract profitable segment

• Proof of concept for marketing and operational capabilities in the region

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Summary

• We are performing well

• We have substantial growth opportunities

• Our new strategy is creating value and better positioning us for growth

• We are differentiating ourselves through our Breakout program

We are on track

to continue growing strongly

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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

Philip GentryHead of Investor Relations

ph: (613) 9273 4185 fax: (613) 9273 4091 e-mail: gentryp@anz.com

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Copy of presentation available on

www.anz.com