Creating Superior Performance and Value for our Shareholders

1. Creating Superior Performance and Value for our Shareholders Peter Marriott Chief Financial Officer 18 July 2000

2. Growth in Creating superior performance and value for our shareholders Difference Affected By... TSR = Price change + Dividend Dividend policy Price = EVA x Multiplier (g, ke) + Capital Growth EVA = (ROE - ke) x Capital Size, Risk & Buybacks ROE = ROA(or RORWA) x Leverage Leverage ROA = PAT/Total Assets Earnings

3. Managing to achieve shareholder value growth Strategic • Active Business portfolio management from the centre • Regular business unit valuations • Exit of low value creation potential businesses or where we are not the natural owner • Identification of new value creating businesses • Lower risk Operational • EVA dominant performance measure • Tailored metrics for each business • Internal • External • Growth plays • Top down target setting • Resource allocation • Bonuses linked to EVA and KPIs

4. Dividend policy • Board Policy - payout has been around 60% • Franking credits - no value to company => will be paid out • Aware Banks are ‘yield’ stocks • Implications of Ralph • serious reduction in value of unfranked dividends vis-à-vis buybacks • marginal reduction in value of franked dividends vis-à-vis buybacks • reduction in value of off-market vis-à-vis on-market buybacks

5. Significant business risk reduction achieved • Personal half of Group earnings • Grindlays sold • quality of corporate book improved • x-border lending reduced • exited emerging market bond trading • substantially improved cost income ratio • more open disclosure Historic view - of ANZ Current Position • skewed business mix • higher portfolio risk • significant presence in developing countries • larger corporate book • higher trading activity • lower efficiency • and more surprises

6. Capital management Capital 10.1 Capital Management Philosophy: • Capital scarce resource to be managed effectively and efficiently • Maintain capital consistent with ANZ’s AA status and peer group ratings • Tier 1 (6.5 - 7.0%) • Inner Tier 1 (6.0% - 6.5%) aligned to Economic Capital • $500m buyback completed 27/3/00 • $1B buyback 24% completed 7.5 7.0 6.5 6.0 2 Year Beta 1.4 ANZ WBC 1.2 NAB 1.0 CBA 0.8 Mar-98 Mar-99 May-00

7. Performance update • Comfortably positioned to achieve analyst expectations for fy2000, based on 1 August timing of Grindlays sale - still the objective • Margins stabilising, underlying non interest income growing • Costs flat • Provisioning - ELP stable, specific provisions lower, some residual Personal loan provisioning Reaffirmation of financial goals: • Earnings per share growth above peer average • ROE above 20% • Cost income ratio comfortably below 50% • Inner Tier 1 capital approaching 6% • Maintaining rating in AA category

8. Group strategic direction built on specialisation, eTransformation and growth Proposition Integrated financial services firms will lose to specialists over time The rise of specialists and new technologies will offer superior customer value and will erode margins For ANZ more value will be created through focus and leverage of intangible assets than traditional concentration plays Strategy Reconceive and develop ANZ as a portfolio of specialist businesses Become an “eBank with a human face” Create a portfolio of high growth business which leverage capabilities and brands

9. Copy of Presentation available on www.anz.com