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1999/00 First Half Results
Bob Prowse Chief Financial Officer
May 2000
www.national.com.au
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Disclaimer
The material that follows is a presentation of
general background information about the
Nationals activities current at the date of the
presentation, 4th May 2000. It is information
given in a 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.
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Agenda

• 1st Half Highlights
• Income and Expenditure
• Asset Quality
• Funding and Capital
• Shareholder Performance
• Summary

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First Half Highlights
MAR 00 v SEPT 99
MAR 00 v MAR 99

• Operating Profit after Tax ? 9.9 ? 13.2
• Underlying Profit ?15.1 ? 10.2
• Net Interest Income ? 3.1 ? 2.8
• Other Operating Income ? 7.2 ? 9.8
• Cost to Income Ratio 50.8
• Return on Equity 17.4
• Dividend (Fully Franked) 0.59

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Net operating profit
98
98
99
99
00
Net Operating Profit
Return On Equity
Profit before abnormals distributions
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Profit drivers
M
OOI 169
NIE 88
Tax (219)
Doubtful Debts 12
FX 29
NII 63
1,573
1,431
Sept 1999
March 2000
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Regional performance
Operating Profit After Tax
Change
Mar 00 788 402 102 265 16 1,573
Mar 99 717 407 108 158 0 1,390
Sep 99 678 354 132 225 42 1,431
AM Australia Europe New Zealand United
States Asia Total
Mar 00 v Sept 99 16.2 13.6 (22.7) 17.8 (61.9) 9.
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Ex FX Impact 16.2 13.7 (16.9) 17.3 (64.1) 10.4
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Income expenditure
MARCH 2000 v SEPTEMBER 1999

• Net Interest Income up 3.1
• Net Interest Margin down 6 bp to 2.93
• Loans Advances up 8.9
• Other Operating Income up 7.2
• Operating Expenses down 3.5
• Total Employees down 1.9
• Cost / Income Ratio down 3.9 to 50.8

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Lending asset growth
m
8.9
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Gross loans advances by region
Change

Mar-00 /
Change
Sept-99
Ex FX
Mar-99
Sep-99
Dec-99
Mar-00
Bn
83.8
86.2
87.0
92.1
6.9
-
Australia
NZ
20.2
20.3
21.5
21.8
7.9
4.6
UK
44.2
45.7
47.8
51.5
12.7
8.3
15.0
14.5
14.9
16.4
12.8
4.5
US
3.2
3.1
2.9
3.1
(0.4)
(10.0)
Asia
Total
166.7
169.7
174.1
184.9
8.9
6.5
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Market share
Australia

• Total Lending 20.3
• Home Loans 17.5
• Other Lending 18.1
• Bill Acceptances 38.3
• Credit Card Balances 20.0
• Retail Deposits 16.4

Source APRA RBA As at Feb 2000
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Market share - Australia
Annual Growth Rates in Total Lending
13
Market share - Australia
Annual Growth Rates in Total Deposits
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Market share
Clydesdale Bank (Scotland)

• Total Lending 11
• Total Mortgages 4

Yorkshire Bank (Midlands)

• Total Lending 4
• Total Mortgages 1

Northern Bank (Ireland)

• Business Lending 38
• Total Mortgages 8
• Main Current Account 27

Source NOP As at December, 1999
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Market share
Bank of New Zealand

• Total Housing 16
• Total Non Personal Lending 22
• Total Credit Card Balances 33

Michigan National Bank

• Total Lending 6
• Total Deposits 6

Source RBNZ -as at December, 1999 Federal
Reserve - as at September, 1999
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Group Net Interest Margin
Trendline
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Regional margin performance
Australia
CBA December 1999 result shown for March 2000
due to differing reporting periods
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Regional margin performance
United Kingdom, USA New Zealand
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Income diversification
20
Other operating income by source
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Funds under management
Australia
bn
22
Costs under control
M
000 FTEs
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Market leading efficiency
Cost / Income Ratio
CBA December 1999 result shown for March 2000
due to differing reporting periods
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Cost / assets ratio
CBA December 1999 result shown for March 2000
due to differing reporting periods
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Staff efficiency

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Asset quality
MARCH 2000 v SEPTEMBER 1999

• Bad Doubtful Debt Charge down 4
• Provisioning Charge to Operating Profit down 2.6
  
• Gross Non Accrual Loans / Risk Weighted Assets
  down to 0.74
• Total Provisioning Coverage of 161

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Net impaired assets
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Provisioning Coverage
M

Adoption of statistical provisioning in Sep 98
half year
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Strong capital position
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Shareholder performance

• The National is a shareholder value driven
  organisation
• EVA increased by 6.2 in last half using
  constant cost of capital
• Earnings per Share up 5.9
• Cash Earnings per Share up 5
• Return on Equity down slightly to 17.4
• Shareholders Funds increased 8.5 to 17.7b
• Fully Franked Dividend of 59 cents per share

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Shareholder returns
Cents / Share
Earnings Per Share
32
Growing annual dividends
Cents / Share
33
Financial impact of MLC acquisition

• Cash EPS accretive from Year 1
• Accelerates growth in Non Interest Income
• Financial ratios impacted
• Capital ratios reduced to target levels
• Tier 2 debt raising of US1.5 Bn

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Summary

• Solid profit growth driven by business
  geographic diversification
• Strong loan growth in all regions
• Margins are stabilising
• Continued strong growth in Other Operating Income
• Overall costs reduced
• Credit quality maintained
• MLC will deliver new growth opportunities

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