Cards and ePayments

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Cards and ePayments

• Brian Hartzer
• Managing Director
• Australia and New Zealand Banking Group
  Limited24 August 2001

2
Building the leading cards business in Australasia

• Strong financial performance
• Growing market share
• Leveraging our core capabilities into new areas
• Attractive growth opportunities and goals

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Cards and ePayments An overview
Merchant acquiring
Unsecured personal lending
Card issuing
Australia
NZ
Offshore
Australia
Australia
NZ

• Customer acquisition
• Portfolio management
• Commercial cards
• Loyalty management
• Alliances

• Credit and debit transaction processing
• e-Acquiring
• Terminal sales rentals
• Chip development and value added services

• Branch sales
• Direct sales

COMMON TECHNOLOGY OPERATIONS PLATFORM
4
Delivering substantial growth
m
Operating Income
Profit After Tax
m
Mar-01
Sep-00
Mar-01
Mar-00
Mar-00
Sep-00

FTE
Cost Income
Mar-01
Mar-01
Sep-00
Mar-00
Sep-00
Mar-00
5
Co-branded cards drive customer numbers and scale
Relative profitability of Australian issuing
acquiring
Note Co-brand accounts increased 70 between
Sep-98 and Mar-01
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Growing share in both issuing and acquiring
Share of Issuing - Outstandings
Share of Acquiring
Excludes 1 billion p.a. in Coles Myer volume,
commenced this month
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with a strong risk management focus
Credit losses - credit cards
Fraud losses credit cards
Bp of turnover
Industry average (7 bp)
Rolling 12 mth loss rate 90/210 days delinquent

• Application and behavioural scorecards in use
• Vision Plus and Triad to further enhance
  capabilities (3/02)

• Falcon and Eagle systems installed (neural
  networking tools)
• 24 hour analysis and detection team

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Cross-sell is delivering promising results
Proprietary Card Cross-sell (Recent Case Study)
Capabilities
In Place

• Full account and customer EVA
• Segmentation markers and profiles
• Propensity-to-buy scores
• Application/behavioural scores
• Multiple campaign management

Index

• Attrition scores by customer
• Recovery scores
• Automated, event-based campaigns
• Automated prospect list delivery (My Sales)
• Optimal strategy selection by customer (longer
  term)

In Pilot/ Develop- ment
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Despite 27 share of card spend, we still have
significant potential for profitable growth
Share of total Personal Consumer Expenditure
Share of Consumer Non-Mortgage Debt

ANZ cards 6.5
ANZ cards 7.9
Other banks cards 17.5
Total Personal Consumer Expenditure 360bn
Total Consumer Non-Mortgage Debt 50.6bn
includes personal loans
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The merchant business offers significant growth

• MultiPOS terminal will lead market in
  functionality and price
• Chip capabilities open up new opportunities for
  merchants
• Offshore banks are expressing interest in our
  capabilities

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Leveraging our distinctive capabilities
internationally
Best Frequent Traveller Credit or Charge Card
(International)

• Target Hong Kong platinum market
• Niche product with unique features to attract
  profitable segment
• Proof of concept for marketing and operational
  capabilities in the region

First Place Qantas Telstra Visa Card
source InsideFlyer Magazine, 2001
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Execution will be key to our success
Staff Satisfaction

• Specialisation and monoline focus
• High quality people and dynamic culture
• Strong team experience in
• Loyalty management QTV, Westfield
• Terminal/chip Eftpos New Zealand
• International markets India, Asia
• Investment in technology
• Platform of the future Vision Plus,
  Falcon/Eagle, Triad
• CRM
• Chip

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Summary

• Focus specialisation has driven strong
  financial performance
• We will continue to grow market share
• We are leveraging our distinctive capabilities
  into new growth opportunities
• Cultural change has been significant, and will
  continue

• Goals
• 20 pa earnings growth to 2005
• Consolidate position as the leading cards
  business in Australasia
• Become a meaningful player in Asia