Performance and Growth

1
Performance and Growth
John McFarlane Chief Executive Officer 6
October 2000
2
Overview of strategy

• Proposition
• Specialists will win over conglomerates
• The internet will add value and erode margins
• Value creation needs both performance and growth

• Strategy
• Reconfigure ANZ as a portfolio of specialist
  businesses
• An e-Bank with a human face
• Build portfolio of growth businesses which
  leverage real capabilities

• Implications
• Distinct strategies for each customer and product
  business
• Use IP technology to transform costs and service
• Invest cost savings in high growth segments

Specialisation
e-Transformation
Growth
3
Top quartile financial companies by value focus
on a narrow set of growth themes
Growth expectations of share price
Top quartile company
Rationale for expectations of growth

• Leading custody and trust service provider to US
  high-end affluent market

Northern Trust
75

• Superior driver of revenue growth and cost
  savings in branch banking. Potential to replicate
  business model to acquisitions

Fifth Third
71

• Strong financial performer whilst building scale
  through MA

Firstar
64

• Strong position in consumer banking in
  high-growth Asian markets

Standard Chartered
60
Mellon Financial Corp

• Scale in US asset management, servicing and
  custody

57

• Global scale in asset servicing and processing

Bank of New York
57

• Global scale and scope of tangible and intangible
  assets

Citigroup
55

• Building leading positions in US in e-commerce,
  mortgage servicing and business lending

Wells Fargo
51
Calculated on 4 August 2000 Source
Brokers reports Hoovers media
4
The strategy requires maintaining a good balance
between EPS growth and increasing expectations
PE Ratio
Aspiration Improved EPS growth and higher PE ratio

PE growth
EPS growth
EPS growth
5
Portfolio strategy should reflect degree of
globalisation and leverage real capabilities
now
FX
Institutional Banking
GSF
Funds Management
Soon
Trade
B2B
Capital Markets
Esanda
Custody
Cards
Impact of globalisation
B2C
Later
Mortgages
Wealth Management
Mid Corporate
General Banking
Not yet
Small Business
Less developed
At par
Local leader
Regionally distinctive
Globally distinctive
ANZs capability
6
Different businesses need different strategies
Business size by NPAT
Invest for rapid growth
Create new businesses
e-Payments
FM
GSF
High
e-Asia
Wealth
Cards
GTS
Market Growth
FX
Institutional
Cap Mkts
Corporate
Small Bus
Low

• Defend position and return
• Grow selectively

Gen Banking

• Optimise performance
• Identify new growth products

Esanda
Mortgages
Low
High
ROE
7
Performance and growth requires outperformance on
costs

Cost Income Ratio
70

• Have committed to substantial cost reduction and
  restructuring programs to
• Meet EPS targets
• Increase growth funding

65
60
WBC
55
CBA
ANZ
NAB
50
40
1997
1998
1999
Mar-00
2000
2001
8
Cultural change is imperative.and happening
Balancing the autonomy of our 21 businesses with
strong leadership from the centre
Business Unit
Corporate Centre

• Prime accountability for profit and value
• Freedom to pursue opportunities within agreed
  boundaries
• Operate using agreed set of platforms, systems
  and shared services
• Transfer pricing based on market

• Drive group strategic direction and set policy
• Portfolio management and resource allocation
• Cross-Business Unit synergies
• Control and oversight of risk, brands and
  technology

9
We are giving ourselves the best possible chance
of success


Strategy
People
Execution

• Distinctive
• Focused
• Forward looking
• Right for ANZ

• Organised for success
• MDs appointed
• Targets and plans established

• Delivered over the last three years
• Growth momentum
• Cards
• Mortgages
• eCommerce

10
ANZ in the medium term
ANZ in 1 - 3 years
ANZ in 4 - 7 years

• Change of emphasis in portfolio
• Substantial e-transformation reducing costs and
  focused service
• Performance optimised
• Eps, ROE, investment
• capital management
• Transformational cultural change

• Substantial portfolio shifts
• Narrower, more focused portfolio with leading
  positions
• Increased investment in high growth business
• Modern performance culture
• Higher stock rating

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Copy of presentation available on www.anz.com
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The material in this presentation is general
background information about the Banks
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
Gentry Head of Investor Relations ph (613) 9273
4185 fax [phone] email
gentryp_at_anz.com