Competing in tomorrow’s world…

Presentation to AIBF Industry Forum7 March 2001

John McFarlaneChief Executive Officer

Australia and New Zealand Banking Group Limited

Forces shaping corporations of the future

Digital technology

• Increasing scale, mobility and integration of the world’s capital market

• Unprecedented transparency

Capital marketsLiberalisation

• Increasing ability to leverage knowledge across physical borders, decreasing relevance of physical assets

• Increasing deregulation across national borders and within nations’ industries

Beyond consolidation - Specialisation

USA

EUROPE

AUSTRALIA

ASIA

leading to globalisation

consolidationFragmentation .. . to . . . and specialisation

Leading to globalisation

Market/Book Ratio

Book Equity

1

4

20 50

ANZ

Schwab

NAB

CBACitigroup

Bank of America

SpecialistsSpecialists Global Mega PlayersGlobal Mega Players

Geographic integratorsGeographic integrators

Geographic incumbentsGeographic incumbents

MBNA

SantanderAmexLloyds TSB

Macquarie

WBC

StGeorge

Specialists have been more successful

Tobins ‘Q’: the market valuing intangibles

Source: McKinsey & Company

Ratio of market value to asset replacement value of S&P 500

0

0.5

1.0

1.5

2.0

Mean

Increase in the relative value of intangible assets such as:

• Talented people

• Ways of working

• Knowledge

• Brand

• Reputation1945 1995

A new leadership model

…AND...

Intellectuallyintelligent

Emotionallyintelligent

Strong best practice performance

• Best global capital markets practices

• Best practice management

• Cost and continuous improvement

• Performance management and accountability

Intangible wealth creation

• Leadership and people development

• Open communication with teamwork/empowerment

• Accountable mindset

• Vision and values driven

• Co-creative

• Flexible, responsive

Great jobs

Winning the war for talent

Compensation and lifestyle

Great company

Great company

Values and culture 58

Well managed 50

Company has exciting 38challenges

Strong performance 29

Industry leader 21

Many talented people 20

Good at development 17

Inspiring mission 16

Fun with colleagues 11

Job security 8Compensation and lifestyle

Differentiated compensation 29

High total compensation 23

Geographical location 19

Respect for lifestyle 14

Acceptable pace/stress 1

Great jobs

Freedom and autonomy 56

Job has exciting 51challenges

Career advancement 38and growth

Fit with boss I admire 29

Perform

A high performing company, exceeding expectations

• Revenue growth• Cost leadership • Risk mitigation• EPS• ROE

Grow

Positioned in growth markets

• Actively managed portfolio• Annual investment in

growth ideas• Higher than peer revenue

growth

Breakout

More dynamic than competitors

• High P/E rating• Performance culture• Lean and agile• The ebank with a human face• A breakout mentality

AND

ANZ’s aspiration

0

5

10

15

20

25

30

0 2 4 6 8 10 12 14 16 18 20

EPS %

sacrifice EPS to build P/E

sacrifice P/E to achieve EPS

Improve EPS and higher PE

PE Ratio

Performance and growth and breakout

Share price curves

The evolution of perform and grow and breakout

• Create a breakout mentality

• Create a strong performance culture

• Out execute in a different game

• Earned the support of the market

• Identify growth opportunities

• Invest to grow

• Build the foundation

• Deliver on the fundamentals

The approach we’ve taken

Business environment

Desires of ANZ’s people

ANZ strategy

Ideal ANZ performance culture

Formal

systems

Mindsets

Behaviours

Current ANZ performance culture

Gap

Performance culture change

program

Today

ANZ – the eBank with a human face

• Put our customers first with an experience that delights

• Focus on creating value for our shareholders

• Lead and inspire our people

• Breakout, be bold and have the courage to be different

• Earn the trust of our people and the community

• Customer first, shareholder value, community

• Perform, specialise, grow, stretch,

• Energy, passion, bold, opportunity, breakout

• Lean, agile, etransform, accountable, well-managed, no

surprises

• Lead, inspire, open, trust, freedom, recognition, team, fun

The ANZ way -Perform, grow and breakout

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 email: gentryp@anz.com

Copy of presentation available on

www.anz.com