growth in our corporate portfolio

Growth in our Corporate Portfolio

Presentation toUBS Warburg Financial Services Conference

Sydney, 6 June 2001

Roger DavisGroup Managing Director

Australia and New Zealand Banking Group Limited

ANZ is executing a distinctive strategy

Proposition

• Entrepreneurialspecialists createmore value

• Corporationsmust embracenew technologies

• Value depends onperformance,growth andbreaking out

Strategy

• Reconfigure ANZas a portfolio of 16specialistbusinesses

• An e-Bank with ahuman face

• Drive results,invest in growthbusinesses andcreate newparadigms

Perform Grow& Breakout

e-Transform

Specialise

Implications

• Specialistapproach tocustomer andproductbusinesses

• Transform theway we dobusiness with IPtechnology

• Meetexpectations,fund growth bycost reduction,transform

ANZ’s Corporate business is undertaking a similar transformation

Perform Grow& Breakout

e-Transform

SpecialiseReorganised into separate customer and product centric businesses

Created 9 distinctive industry segments in the Institutional sector

Secured a #1 rating for banker quality, creative ideas and knowledge

Maintain top 3 leadership position in FX (#1); Derivatives (#1/#2); non-vanilla Securitisation (#1); CP (#1); Syndications (#1)

e-Enable commodity functions and processes

Trade - Magellan/Proponix

FX - Atriax; FX On-line

Capital Markets – Aus Markets

Cash – Web-Pay; Identrus; PKI

Procurement – ANZ e-Biz; MRO; Mosaic

“Customer Obsession” – leverage centricity and market penetration (#1)

Share of Wallet –v- Share of Market Emphasis

Product driven growth initiatives

Double earnings by 2004

specialisation and out-growing

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: the market

• Benchmark: competitors in each business

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


• Success: 4-5 moves taking share andworth ~A$1b+ market capeach

• Focus: performance

• Benchmark: market expectations

• Looking for: six monthly delivery


• Success: meet/exceed expectationsconsistently

Transforming ANZ through Perform, Grow and Breakout

The Corporate portfolio plays a major role in ANZ’s future

ANZ Group Segments(by 1H 2001 NPAT)

Personal46%

Intnl & Subs15%

Corporate39%

CorporateBanking

InstitutionalBanking

Global CapitalMarkets

Global ForeignExchange

Global StructuredFinance

Global TransactionServices

$65m

$88m

$24m

$85m

$40m

$54m

CorporateBusinesses

(by 1H 2001 NPAT)

Our strategy is delivering results...

NPAT Trends

61

67

16

32

69

46

60

70

18

34

89

40

65

88

24

40

85

54

0

10

20

30

40

50

60

70

80

90

100

Corporate Institutional CapitalMarkets

ForeignExchange

StructuredFinance

TransactionServices

$m

Mar-00Sep-00Mar-01

7%

31%

25%

23%

50%

17%

...and a low risk profile

Risk actively managed

• Quarterly strategy reports prepared for all high risk accounts

• June to October 2000 - all BB rated accounts within Corporate reviewed in expectation of downturn

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

-40

-20

0

20

40

60

80

100

Mar-00 Sep-00 Mar-01

ELP charge

SP charge

Actual SP v ELP charge

$m

Credit quality is sound in some of our larger industry exposures - Australia

Lending Assets (AUDm)% of Portfolio (RHS scale)% in CCR 7D-8G (RHS scale)

0bn

2bn

4bn

6bn

8bn

10bn

Sep- 98 Mar- 01

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

0bn

2bn

4bn

6bn

8bn

10bn

Sep- 98 Mar- 01

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

0bn

2bn

4bn

6bn

8bn

10bn

Sep- 98 Mar- 01

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

0bn

2bn

4bn

6bn

8bn

10bn

Sep- 98 Mar- 010.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

0bn

2bn

4bn

6bn

8bn

10bn

Sep- 98 Mar- 01

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

0bn

2bn

4bn

6bn

8bn

10bn

Sep- 98 Mar- 01

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

Real Estate Operators & Dev.

Manufacturing Retail Trade

Agriculture Accomm. Cafes & Restaurants

Construction

% in CCR 9-10 (RHS scale)x

All Corporate units are targeting revenue growth to exceed cost growth

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

We are on track to meet our commitment to double profit by 2004

Corporate Portfolio NPAT

0

100

200

300

400

500

600

700

800

900

1000

1999 2000 2001* 2002 2003 2004

* Annualised NPAT for 1H 2001

$mDouble 1999

NPAT - required CAGR of 15%

Actual NPAT

Our main focus is on growing total wallet share

Grow wallet share

• New high value products

• New delivery mechanisms

• Improved cross- sell

• Increased sale of 3rd party products

FY 2000 revenue $1.7b

~5,000

0

# Customers

~20%* ~35%

Share of Customer Wallet

Potentialrevenue ~$1.3b

Focus on deeperpenetration of existing

CFS customer base

Total walletof ANZ customer

base ~$8.5b

* source: internal estimate

The elements of our growth

Opportunistic• New customers• New products/initiatives• New geographies

Client Constrained• Wallet share offers better

growth opportunities

Challenging• Competition• Limited geographic footprint• Balance sheet & risk• Time & technology• Regulatory tax accounting• Customer rich franchise

DynamicOrganisationalimplications

Technology BasedGrowth opportunities can also leverage technology:• Atriax, AusMarkets• Proponix• PICI• e-Payments• Infrastructure plays

New Product Focussed• Credit derivatives• Infrastructure equity (Morrison)• Private equity• Soft & base metal commodities• Securitisation (new)• Equity derivatives

Non-balance sheet,fee income based• Less capital intensive

Growth is...

Our customer focus is the critical foundation…

New technology platforms such as MARS (Management Analysis Reporting System) provide critical support for CRM & CVM activities

Putting our corporate customers first, is a key retention & service value strategy for us

Source: Roberts Research, Survey 2000

Overall Satisfaction with Bank

7.67.5

7.67.4

6.97.0

7.1

6.4

6.0

6.5

7.0

7.5

8.0

1997 1998 1999 2000

ANZ NAB CBA Westpac

Deepening penetration of our high value, predominantly fee based products

ProjectFinancing

CorporateAdvisory

SpecifiedFinancing

Gold

BaseMetals Oil

Softs

Counter-PartyExposure

Management

StructuredProduct

StructuredWealth

Products

Portfolio& OptionPrograms

TradeFinance

Processing

CorporateI nternet CashManagement

StructuredI nfrastructureI nvestment

Pre-SoldEquity

Underwritings

PrivateEquity

EQUITYCREDIT

DERIVATIVESEQUITY

DERIVATIVES

COMMODITIESFINANCINGTRANSACTION

SERVICES

ProjectFinancing

CorporateAdvisory

SpecifiedFinancing

Gold

BaseMetals Oil

Softs

Counter-PartyExposure

Management

StructuredProduct

StructuredWealth

Products

Portfolio& OptionPrograms

TradeFinance

Processing

CorporateI nternet CashManagement

StructuredI nfrastructureI nvestment

Pre-SoldEquity

Underwritings

PrivateEquity

EQUITYCREDIT

DERIVATIVESEQUITY

DERIVATIVES

COMMODITIESFINANCINGTRANSACTION

SERVICES

Corporate Financial ServicesRoger Davis

Corporate Banking

Institutional Banking

Transaction Services

Foreign Exchange

Capital Markets

Grow EVA through

efficiency and penetration

Grow EVA through

efficiency and penetration

• Middle market wallet share

• Back office technology and processes

• Staff recruitment and training

• Customer and product interface

• Customer management systems

• Staff recruitment and training

• Trade finance system and benefits

• Streamlined organisation

• Growth strategies for high potential products

• Revenue momentum

• eFX-based initiatives

• Global commodities business

• High IP product growth

• Cost reduction initiatives

• Staff recruitment and retention

Th

em

eP

riori

ties

Systems CRM MARS B2B eCommerce Brand Risk Management

AccountabilitiesCFS 50%Group 50%

Controls are in place to protect synergies and maximise opportunities

Structured Finance

• Securitisation and asset sales

• Revenue growth initiatives

• Partnerships and alliances

Invest for growth in trade and

transactions

Defend FX business and

grow selectively

Maximise franchise and

grow selectively

Execute strategy

selectively

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 differentiating ourselves through our Breakout program

We are on track

to continue growing strongly

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: [email protected]

Copy of presentation available on

www.anz.com

growth in our corporate portfolio

Documents

revenue growth

fund growth

market penetration

b market capeachfocus

market expectationslooking

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corporate units

anzs corporate business