Mortgages Greg Camm Managing Director Australia and New

Mortgages Greg Camm Managing Director Australia and New Zealand Banking Group Limited 24 August 2001

Delivery through specialisation • Who we are and what we do • Financial Performance • Risk Profile • Strategy Page 2

Who we are & what we do • Total assets A$57 billion – Aust A$48 billion ($3 b securitised) – NZ A$9 billion • 600, 000 loan accounts F • 300, 000 applications pa • 850 FTE staff • 7 sites Australia Acquisition Fulfilment Servicing New Zealand A/F F A/F/S 3 6 1 F 1 Source: ANZ Mortgages, as at 30 June 2001 Page 3 A/F/S

Specialisation has created substantial value $m Operating Income Mar-00 Sep-00 $m Mar-01 Profit After Tax Mar-00 FTE & Operating costs % $m Sep-00 Mar-01 Cost/Income FTE Expenses Mar-00 Sep-00 Mar-01 Mar-00 Page 4 Sep-00 Mar-01

Risk profile is sound 60+ day delinquency as % Loans (Australia) Mortgage business formed Distribution of Behavioural scores (Australia) Town & Country conversion Lower quality Delinquency performance vs industry (Australia) $m Cumulative ELP vs Losses Industry ANZ Source: ANZ Mortgages / Group Risk MIS/PMI Ltd / (Australian Market) Page 5 Higher quality

Strategy Focused Management Product Leadership Personal Investor Magazine Home Lender of the Year 1999 2000 2001 Segmentation & Targeting Diverse Distribution Broad Reach & specialised distribution management • ANZ Network • Brokers • Wholesale (Origin) Productivity through Scale & Standardisation Value Proposition tailored for key segments Centralised when scale matters Sophisticated database marketing One platform across the business Page 6

Strong growth in a growing industry $bn ANZ and System Growth (Australia) ANZ 22. 4%CAGR Drivers: • Housing prices • Strong economy • GST effects System 15. 2%CAGR (Forecast 10. 8% CAGR next 3 years) • Substitution • Demographics • Wealth Source: RBA, ANZ Mortgages, ANZ Economics Page 7

Demographic changes drive changing demand Number of households (‘ 000) Forecast changes to age cohorts over next 5 years Couple families with children ‘Baby boomers’ Couple families no children First home buyers Lone person Households 0 -19 20 -34 35 -44 45 -54 55 -64 65+ • Implications for credit policy, product design, marketing strategies, risk profile…. . Source: ABS Cat. No. 3101. 0, 3222. 0 (Series I Projection), 3236. 0 (Series B projection) Page 8

Targeting the ‘Wealth Generators’… The mortgage ‘iceberg’ New Business Flows New owner occupiers 15% Refinancers 20% Investors 24% “The Wealth Generators” Upgraders 41% • wealth creation agenda • higher loan size • attractive credit performance Source: Mintel Page 9

ANZ leads the investment lending market $m ANZ share of Australian Investment Loan Market “All Mortgages” Share of net growth Sept’ 00 - Mar’ 01 “Wealth” Owner Occupied Share of Outstandings Share of Growth Leadership position built on ANZ customer base, product design, targeted distribution Source: APRA, RBA, S&P, ABA, Competitor Annual & Half Year Reports, ANZ Mortgages Page 10

Strategy - Distribution Source of Approvals ANZ distribution Brokers Origin - 80% of broker loans are new customers to ANZ Source: ANZ Mortgages Page 11

Unit returns from all channels are similar Loan Size Comparative Economics Interest Margin Revenue Duration Fees Acquisition Lifetime Loan Value Fulfilment Cost Servicing Credit (ELP) Operating Risk Capital Basis Risk Lifetime EVA per unit Credit Risk unexpected loss Margin is not the only driver of Value ANZ Distribution Page 12 Brokers Wholesale

Strongly positioned in a growth market • Specialisation and focus have delivered insight and strong results • We are a scale player • Sound risk profile • Diversified funding capability • Targeting the ‘wealth generators’ Goals • Maintain product & distribution leadership • Web delivery & automation • Build servicing scale • Further third party alliances Page 13