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Corporate Financial Services

Corporate Financial Services. Roger Davis Group Managing Director Australia and New Zealand Banking Group Limited 20 July 2001. The Corporate Portfolio – Today’s Themes. Portfolio of Specialist Product and Customer Businesses with largely leading market positions Defining our businesses

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Corporate Financial Services

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  1. Corporate Financial Services Roger Davis Group Managing Director Australia and New Zealand Banking Group Limited 20 July 2001

  2. The Corporate Portfolio – Today’s Themes • Portfolio of Specialist Product and Customer Businesses with largely leading market positions • Defining our businesses • Corporate objectives • Customer centricity • The leading Corporate Bank • Financial Performance • Significant growth opportunities • Deepening share of wallet • Cautious approach on risk • On track to meet our commitment to double earnings by 2004

  3. ANZ Corporate is different • Size: Corporate generates 40% of ANZ’s earnings • International: Corporate earns 30%+ from outside Australia • Growth: On track to double profits 1999 – 2004 • Customers: Rank #1 on most independent measures • Strategy: Moving focus from balance sheet to value added services • Key success factors: Leveraging our intellectual capital • Mid-market customers – Wall St to Main St • Institutional customers – increasingly complex product offering

  4. The Corporate Portfolio - distinct businesses working together Aggregate and Distribute Innovate and Manufacture Product Corporate Banking Institutional Banking Transaction Services Foreign Exchange Capital Markets Structured Finance • Medium-sized • business • Portfolio • responsibilities • Cash mgmt • Trade finance • Security • services • FX (incl FX • Online) • Spot • Forward • Derivatives • Base metals • Commodities • Origination • Underwriting • Structuring • Risk mgmt • Credit products • Derivatives • Large-sized • business • Portfolio • responsibilities • Arranging • Underwriting • Advisory • Structured • debt • Project finance Systems CRM Culture Technology Brand Risk Management

  5. ANZ ANZ ANZ ANZ ANZ ANZ ANZ ANZ ANZ ANZ ANZ ANZ ANZ ANZ ANZ ANZ ANZ ANZ ANZ ANZ ANZ ANZ ANZ Our activities & earnings are generated from 30 countries

  6. What we want to achieve: The Corporate goals • Increase NPAT by 15%+ CAGR • Achieve an efficiency ratio comfortably in the 40% range • Generate Returns on Equity above 20% • Maintain our #1 position in client satisfaction • Attain a top 3 market position in each of our core businesses • Maintain good governance & high standards in overall risk management

  7. Specialise e-Transform Perform Grow & Breakout We are transforming the way we operate • Reorganised into separate customer & product businesses • Focus on businesses where we have a competitive advantage - exit those where we don’t (Futures) • Industry specialisation • e-Enable commodity functions and processes • Trade - Magellan/Proponix • FX - Atriax; FX On-line • Capital Markets – Aus Markets • Cash – Web-Pay, Identrus, PKI • ‘Customer Obsession’ – an experience which delights • Share of Wallet vs Share of Market emphasis • Product driven growth initiatives • Culture - The ANZ way

  8. Each business enjoys strong positions in their own segment #1 Commercial Paper (Asia Money) Global Capital Markets #1 Project Finance Bank Asia Pacific (PFI) Best FX Bank Australia (Greenwich) Global Foreign Exchange Global Structured Finance Corporate Portfolio Institutional Banking Global Transaction Services Corporate Banking #1 Overall Satisfaction International Trade Svcs Major Aust Banks (Roberts) #1 Overall Satisfaction (Greenwich) #1 Overall Satisfaction (Roberts)

  9. Specialisation is creating improved financial outcomes... Up 22% $54m $40m Global TransactionServices $46m $32m Global ForeignExchange $85m $69m Global StructuredFinance $24m Global CapitalMarkets $16m $88m $67m InstitutionalBanking CorporateBanking $65m $61m 1H 2000 NPAT 1H 2001 NPAT

  10. Total wallet of ANZ customer base ~$8.5b …allowing us to better address a large but untapped prize in the corporate base… Focus on deeper # Customers penetration of existing CFS customer base • Grow wallet share • New high value • products • New delivery • mechanisms • Improved cross-sell • Increased sale of • 3rd party products Potential revenue ~$1.3b ~5,000 FY 2000 Revenue $1.7b 0 ~20%* ~35% Share of Customer Wallet *Source: Internal estimate

  11. …while maintaining a low risk profile • Risk actively managed • Quarterly strategy reports prepared for all high risk accounts • All BB rated & high risk accounts reviewed regularly • SPs likely to rise towards ELP in line with current expectations Corporate risk grade profile AAA to BBB+ Actual SP v ELP charge BBB to BBB- BB + to BB BB- > B >B = B, B-, CCC & non-accrual ELP charge SP charge

  12. We are therefore well on track to meet our promise to double profit by 2004 Double 1999 NPAT - required CAGR of 15% exceeded by current performance to date $m Actual NPAT Up 18% Up 25% * Annualised NPAT for 1H 2001

  13. Summary • We are performing well • Our corporate portfolio is lower risk • We are focussingon non-lending fee income as we transition from being a balance sheet based business to being an intellectual capital services firm • Our new strategy is creating value and better positioning us for growth We are on track to double profit by 2004

  14. Copy of presentation available on www.anz.com

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