2000 Interim Results Australia and New Zealand Banking

2000 Interim Results Australia and New Zealand Banking Group Limited 1 May 2000

ANZ Delivers on Financial Commitments m Double-digit earnings growth 14%. EPS 10% m Increase ROE towards 20% 17. 8% (17. 3%) m 53% cost income ratio 51. 4% Costs flat m Reduce risk Grindlays Matches peers ex m Achieve an optimal capital structure completed announced $500 m buyback $1 bn buyback

Financial Performance ¢ EPS % % Tier 1 Ratio % Lending Mix ROE % Cost Income Ratio Mortgages WBC Emerging Markets NAB CBA ANZ

Drivers of Performance ROA 4 ROE 4 Net Interest Assets X NII/Interest Earning X Assets Other Income 4 Assets / 1. 61* Cost/Income 4 “Leverage” Cost Assets 4 Provisions Assets 4 Risk */ 52. 4 excludes abnormal income Business Mix 54. 5 51. 4/ 52. 4* Provisions/NLA 4

Business Unit Performance Group 8% A$ International 9% Corporate 38% Personal 45%

Change in Profit Other Income Other Fee Growth 17 $m 850 800 Sale of Strategic Investments 33 Property Lending Fee Net Interest 20 Income 34 764 750 700 30 Revaluation 30 Doubtful Debts Costs (4) (9) 817 Tax (34) Restatement of Deferred Tax Balance (64) Significant one off items (1) 650 600 Second Half 1999 First Half 2000

Improving Asset Quality Provisioning: ELP v SP Non Accrual Loans $ m Personal Financial Services 762 886 871 657 554 1999 1 H 00 Corporat e Financial Services Internation al 444 900 428 1997 1998 Net Non Accrual Loans Mar-99 Specific Provisions Mar-00 Mar-99 ELP Mar-00 Mar-99 SP Mar-00

Transformation from the Sale of Grindlays % ELP Percentage of Grindlays Exposure to Countries Rated below ‘Single A’ Net Lending Assets % Of Group Of Total Grindlays Exposure <A Exposure oforma ROE March 00 Post Grindlays Sale 17. 8% Excludes warranties and indemnities Buyback 17. 3% m m -1. 9% -1. 4% m 15. 9% Comparable ROE and leverage yet much lower risk Scope for further capital management Proforma includes re-investment of sales price excluding “free funds” effect of sales provisions

Transformation from the Sale of Grindlays Tier 1 Ratios Sale Buyback Other Influences m RWA 0. 5 Profit 0. 3 0. 8 m EPS - Proforma March 2000 (Annualised) Sale Buyback Other Influences m m 5 -6¢ 2 -3¢ Buyback Lower risk implies move to lower end of 6. 0 - 6. 5% range NZ Tracking Stock ã 0. 4% Tier 1 ã 60/40 2000 & 2001 m Significantly lower risk Higher quality income streams More consistent business

Buyback to Reduce Capital Surplus % Capital Adequacy Capital Management Philosophy: m m Inner Tier 1 Hybrid Tier 1 Net Tier 2 m Capital scarce resource to be managed effectively and efficiently Maintain capital consistent with ANZ’s AA status and peer group ratings ã Tier 1 (6. 5 - 7. 0%) ã Inner Tier 1 (6. 0% - 6. 5%) aligned to Economic Capital $500 million buyback completed $1 B buyback announced

Good Progress on Business Strategies Business Strategy m Accelerate growth in Personal m Build on strength in Corporate m Simplify and focus International m Build leadership in e. Commerce Outcomes Mortgage & cards share up Personal 45% of group profit FM challenging, new team Leadership position enhanced ROA 0. 9% (0. 7%) Non accruals 0. 4% (0. 9%) Grindlays sale Latin America Offices closed Asia-Pacific e. Commerce focus Approaching leadership B 2 C Strong portfolio B 2 B

Delivering via the Web B 2 C B 2 B Identrus FX On-line (ANZ On-Line) E-Procurement eisa Transformation operations. com Employee PCs Directors on line Sales & Service Platform ERP Enterprise Resource Planning

Clear Strategic Direction Imperatives m Improve sustainability of core franchise m Radically transform the business m Accelerate growth program m Develop strategic international positions

Clear Strategic Direction Imperative Improve sustainability of core franchise Radically transform the business Accelerate growth program Develop strategic international positions Response Accelerate growth of up-scale segments in Personal Address retail funds management strategic position Seek value enhancing infill acquisitions in Personal Continue to build leadership in Corporate Revolutionise cost base with web-based technology Rapidly enable ANZ customers on anz. com Become a more customer-centric company Build culture and talent to compete in the new economy Accelerate pace of investment in growth segments Build substantial portfolio of e-products and businesses Accelerate medium-term search for transforming acquisitions Improve our capacity longer term to participate in industry consolidation on our terms Build semi-global niche positions in trade, FX, structured finance, cards and e-Commerce Rapidly roll-out e-Commerce investments in Asia

Financial Goals Going forward m EPS growth that outperforms the average of our peer banks m Increasing Return on Equity: Target 20% m A cost income ratio comfortably below 50% m An Inner Tier 1 ratio approaching 6% m Maintenance of credit rating in AA category

Personal Momentum % Share of Housing Lending % Share of Credit Card Spend Feb 00 Internet Banking Users as % of Main Relationships Source Ord Minnett and Roy Morgan Research