Corporate Financial Services

Roger DavisGroup Managing Director

Australia and New Zealand Banking Group Limited 20 July 2001

Page 2

The Corporate Portfolio – Today’s Themes

• Portfolio of Specialist Product and Customer Businesses with largely leading market positions

– Defining our businesses

– Corporate objectives

– Customer centricity

– The leading Corporate Bank

– Financial Performance

• Significant growth opportunities

– Deepening share of wallet

– Cautious approach on risk

– On track to meet our commitment to double earnings by 2004

Page 3

ANZ Corporate is different

• Size: Corporate generates 40% of ANZ’s earnings

• International: Corporate earns 30%+ from outside Australia

• Growth: On track to double profits 1999 – 2004

• Customers: Rank #1 on most independent measures

• Strategy: Moving focus from balance sheet to value added services

• Key success factors: Leveraging our intellectual capital

– Mid-market customers – Wall St to Main St

– Institutional customers – increasingly complex product offering

Page 4

The Corporate Portfolio - distinct businesses working together

Corporate Banking

Institutional Banking

Transaction Services

Foreign Exchange

Capital Markets

Systems CRM Culture Technology Brand Risk Management

Structured Finance

Aggregate and Distribute

Innovate and Manufacture Product

• Medium-sized business• Portfolio responsibilities

• Large-sized business• Portfolio responsibilities

• Cash mgmt• Trade finance• Security services

• FX (incl FX Online)• Spot• Forward• Derivatives• Base metals• Commodities

• Origination• Underwriting• Structuring• Risk mgmt• Credit products• Derivatives

• Arranging• Underwriting• Advisory• Structured debt• Project finance

Page 5

Our activities & earnings are generated from 30 countries

ANZ

ANZ

ANZ

ANZ

ANZ

ANZ

ANZANZ

ANZANZANZ ANZANZ

ANZ

ANZANZANZ ANZ

ANZ

ANZANZ

ANZ

ANZ

Geographic Diversityof Earnings

Australia

New Zealand

Middle East

Americas

UK/ Europe

Asia/ Pacific

Page 6

What we want to achieve: The Corporate goals

Increase NPAT by 15%+ CAGR

Achieve an efficiency ratio comfortably in the 40% range

Generate Returns on Equity above 20%

Maintain our #1 position in client satisfaction

Attain a top 3 market position in each of our core businesses

Maintain good governance & high standards in overall risk management

Page 7

We are transforming the way we operate

Specialise

Reorganised into separate customer & product businesses

Focus on businesses where we have a competitive advantage - exit those where we don’t (Futures)

Industry specialisation

e-Transform

e-Enable commodity functions and processes Trade - Magellan/Proponix FX - Atriax; FX On-line Capital Markets – Aus Markets Cash – Web-Pay, Identrus, PKI

Perform Grow& Breakout

‘Customer Obsession’ – an experience which delights Share of Wallet vs Share of Market emphasis Product driven growth initiatives Culture - The ANZ way

Page 8

Each business enjoys strong positions in their own segment

Institutional

Banking

CorporateBanking

Global Transaction

Services

Global Structured

Finance

GlobalCapitalMarkets

Global Foreign

Exchange

CorporatePortfolio

Best FX Bank Australia(Greenwich)

#1 Commercial Paper(Asia Money)

#1 Overall Satisfaction(Greenwich)

#1 Overall Satisfaction(Roberts)

#1 Overall SatisfactionInternational Trade Svcs

Major Aust Banks(Roberts)

#1 Project Finance BankAsia Pacific

(PFI)

Page 9

Specialisation is creating improved financial outcomes...

Corporate Banking

Institutional Banking

Global Capital Markets

Global Structured Finance

Global Foreign Exchange

Global Transaction Services

1H 2000NPAT

1H 2001NPAT

Up 22%

$61m

$67m

$16m

$69m

$32m

$46m

$65m

$88m

$24m

$85m

$40m

$54m

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…allowing us to better address a large but untapped prize in the corporate base…

Grow wallet share

• New high value products

• New delivery mechanisms

• Improved cross-sell

• Increased sale of 3rd party products

FY 2000Revenue$1.7b

~5,000

0

# Customers

~20%* ~35%

Share of Customer Wallet

Potentialrevenue ~$1.3b

Focus on deeperpenetration of existing

CFS customer base

Total wallet ofANZ customerbase ~$8.5b

*Source: Internal estimate

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…while maintaining a low risk profile

Risk actively managed

• Quarterly strategy reports prepared for all high risk accounts

• All BB rated & high risk accounts reviewed regularly

• SPs likely to rise towards ELP in line with current expectations

11.7% 12.3% 11.7%

18.2% 19.1% 19.4% 20.3%

26.7% 26.9% 27.4%

37.9%

5.3% 4.1%4.0% 3.6%

9.3%

26.4%

38.4% 38.9%38.4%

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

AAA to BBB+

BBB to BBB-

BB + to BB

BB-

> B

Corporate risk grade profile

>B = B, B-, CCC& non-accrual

Actual SP v ELP charge

-40

-20

0

20

40

60

80

100

120

1H 98 2H 98 1H 99 2H 99 1H 00 2H 00 1H 01

ELP charge SP charge

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Corporate Portfolio NPAT

0

100

200

300

400

500

600

700

800

900

1000

1999 2000 2001* 2002 2003 2004

We are therefore well on track to meet our promise to double profit by 2004

* Annualised NPAT for 1H 2001

$m

Double 1999 NPAT - required

CAGR of 15%exceeded by

current performance to

date

Actual NPAT

Up 25%

Up 18%

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Summary

• We are performing well

• Our corporate portfolio is lower risk

• We are focussing on non-lending fee income as we transition from being a balance sheet based business to being an intellectual capital services firm

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

We are on track to double

profit by 2004

Page 14

Copy of presentation available on

www.anz.com