Meeting the New Economy Head on

Elmer Funke KupperAustralia and New Zealand Banking Group Ltd

Wednesday, 30 August 2000

One of the ‘Big Four’ Australian banks:• Provider of full range of financial services• Leadership in Corporate Banking, Credit Cards and Trade

Finance• Emerging strong eCommerce position • Offshore network in Asia and Pacific (following sale of ANZ

Grindlays to Standard Chartered)

• Assets A$167b

• Market Cap A$20b

• Credit Rating AA-/Aa3

• Profit (first half 00) A$817m

ANZ Headquarters100 Queen Street, Melbourne

ANZ

Significant momentum in financial performance

60

80

100

120

1997 1998 1999 Mar-00

EPS

5

10

15

20

1997 1998 1999 Mar-00

ROE

0

5

10

15

20

25

30

35

40

1998 1999 Mar-00 ProForma

Lending Mix

50

55

60

65

70

1997 1998 1999 Mar-00

Cost Income Ratio%

WBC

CBAANZNAB

%

Emerging Markets

Mortgages

¢ %

Group strategic direction built on specialisation, eTransformation and growth

Proposition

1 Integrated financial services firms will lose to specialists over time

2 The rise of specialists and new technologies will deliver superior customer value and erode margins

3 For ANZ more value will be created through focus and leverage of intangible assets than traditional concentration plays

Strategy

1 Reconceive and develop ANZ as a portfolio of specialist businesses

2 Become an “eBank with a human face”

3 Create a portfolio of high growth businesses which leverage capabilities and brands

Technology transforms what customers expect

0

50

100

150

200

250

300

1930 1940 1950 1960 1970 1980 1990 2000

Cost of a 3-minute telephone call from New York to London

1996, $

Time required to find a high rate certificate of deposit

Telephone

www

www withagent

25 min

10 min

1 min

A disaggregated approach is required

HousePurchase

Product Manufacturing

Sales &Marketing

CreditCard

WealthMgmt

CashDeposit

YodleeQuicken

EDSIBM

Distribution Channels& Processing

CustomerNeed

FidelitySchwab

CountrywideAHL

MBNANextCard

EggING

Personal

Corporate

International/eCommerce

Leader (#1) Competitive Weaker

Cards

CorporateStructured FinanceForeign ExchangeAsset FinanceB2B eCommerce

B2C eCommerceWealth ManagementMortgagesGeneral BankingSmall Business

Capital MarketsInstitutionalTransaction Services

Pacific Asia

Funds Management

Increase focus on specialist positions

Group strategic direction built on specialisation, eTransformation and growth

Proposition

1 Integrated financial services firms will lose to specialists over time

2 The rise of specialists and new technologies will offer superior customer value and will erode margins

3 For ANZ more value will be created through focus and leverage of intangible assets than traditional concentration plays

Strategy

1 Reconceive and develop ANZ as a portfolio of specialist businesses

2 Become an “eBank with a human face”

3 Create a portfolio of high growth business which leverage capabilities and brands

0

1

2

Traditional Retail Bank

Internet Bank

Internet Bank

(at scale)

0

2

4

6

Customers Sales Branches Staff

Ratio Schwab to ANZ Retail

We have no choice but to transform our economics

Operating Costs

1.8

0.6

1.2

%FUM

Technology vision

Better ServiceLower Costs

Automated, seamless Straight-through Processing

Single IP Network

Cus

tom

er

Man

agem

ent

Web enabled Channels Standard PlatformsCustomers

Straight through processing

Personal Banking Loan Origination SystemApplication

ServersBackend

MortgageManagers

IntranetANZ Branch

Network

Customers

Back-officeOperations

Web ServersANZ’s

Core A/CProcessing

System

CreditBureau

MISpackaged solution

IBM M/frame

First implementation for Mortgage products scheduled 2000

Internet Service Provider

Internet

packaged solution

Middleware

ANZ Network

Proposition

1 Integrated financial services firms will lose to specialists over time

2 The rise of specialists and new technologies will offer superior customer value and will erode margins

3 For ANZ more value will be created through focus and leverage of intangible assets than traditional concentration plays

Strategy

1 Reconceive and develop ANZ as a portfolio of specialist businesses

2 Become an “eBank with a human face”

3 Create a portfolio of high growth business which leverage capabilities and brands

Group strategic direction built on specialisation, eTransformation and growth

The Web is at the heart of our growth and future

Directors on lineDirectors on lineDirectors on lineDirectors on lineSales & Service Sales & Service

PlatformPlatform

ERPERP

ASTASTReal Time Real Time

Loan ApprovalsLoan Approvals

B2C

B2B

Internal

VIPS

anz.com is now leading the way in B2C

0

50,000

100,000

150,000

200,000

250,000

300,000

Oct-99 Feb-00 Jun-00

Australia

New Zealand

Internet Banking Signups

10.28.9 8.9

7.9

5.1

ANZ WBC NAB St G CBA

Internet Banking Users% of Total Relationships

Number of Products

0

100

200

300 Index: 100 = average retail customer

Lending Balance

Deposit Balance

Profit Attrition

Internet Banking Customers

0

500

1000

1500

2000

Oct-99 Feb-00 Jun-00

Online Applications - Credit Cards

myanz.com is the latest new offer

Two views of financial services in B2B

Business in Own Right - Model 1

Facilitation of Other Businesses - Model 2

Direct

Delivery

BuyerBusinessCustomer

E-Products

Supplier

FinancialInstitution

BusinessCustomer

Direct Product Delivery

Trading Enablement

FinancialInstitution

Existing online services

ANZ OnLine

• Domestic, global payments

• Global reporting

• Trade

FX Online 1999

• Real-time pricing, deal execution reporting

• Spot, forward

Esanda Auto Finance

• Assessment & approval of car finance

• 20,000 base stations, 80,000+ users

• 5M payments per month

• 75%+ business customer penetration

• $2.5bn turnover

• 250 users

• Largest auto finance provider

• Over 300 dealers connected

Established support infrastructure provides:• High volume capacity• High reliability time critical processing

B2B example: eGate

Key Features

• Multi-payment, multi-channel, multi-currency

• Secure gateway

• Covers B2B, B2C, C2C, e-procurement, e-tailing

Supports traditional payment channels

B2B example: eProcurement

Key Features

• Transparent internet marketplace for both buyer and supplier

• Full range items including maintenance and repair supplies, stationery, computing equipment

• Click and go approach, pay for as you go

Integration with financial services Currently in beta test Leveraging corProcure alliance of 14

leading Australian companies Buyer

InternetInternet

Clearing

• Merchant

• Issuing

• Other

Supplier

Internet

MROBuyer

Workflow

Author-

isation

Catalogues

Punchout

Messaging

MRO Marketplace

Supplier

Interfaces

ANZ

eGate

CardOn Account

Other

0.10.26

2000 2005

14

24.24

1.3

3.5

1.24

2.98Taiwan

1.34

2.61

2000 2005

0.1 0.23

2000 20050.5

0.89

2000 2005

0.45

1.11

2000 2005

Mass affluent market is emerging

Thailand

Malaysia Singapore

China 3 Korea

Indonesia

Philippines

Japan

Hong Kong0.12

0.39

2000 2005

1.5

3.23

2000 2005

• Dramatically reduce the cost of customer acquisition away from- Advertising only- High deposit rates

• Improve monetisation- Deposit and asset products- Non banking products

• Create loyalty

The Challenges

The challenges have little to do with banking

-2

-1

0

1

2

3

4

5

He

ad

lin

e N

et

Inte

res

t M

arg

in

Egg Launched

Halifax

Lloyds/TSB

Supermarkets

Egg

95 96 97 98 99

%NIM

UK Interest Margins

• Regulatory hurdles

OCBC – ANZ Joint Venture

Regional e-based financial institution

+

Internet Service Provider

B2B and B2C Enabling

Online Stockbroking

Retail Alliances

Leading Financial Portal

Banking front end

ANZ in 3-5 years

• Leading positions in a number of specialist businesses in Australia, New Zealand and Asia

• Portfolio of businesses likely to be narrower and more focused

• A performance orientated driver of individual businesses

• Portfolio actively re-shaped by the corporate centre

• Multiple strategic alliances

• A range of growth businesses and options

• A leader in eCommerce

• Higher market to book ratio

Copies of ANZ strategy presentations available on

www.anz.com

Contribution balanced between personal and corporate, and product and customer

International

PersonalCorporate

Other

0

100

Personal

Cards

Wealth Mgmt

Mortgages

Funds Mgmt

General Banking

Small Business

0

100

Corporate

Corporate

Foreign Exchange

Asset Finance

Capital Markets

Institutional

Structured Finance

Transaction Services

0 100AsiaPacific

%%

* Excluding Grindlays

738m*

37m*

368m 311m

International

CustomerBusinesses

Shaded

The material in this presentation is general background information about the Bank’s 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 GentryHead of Investor Relations

ph: (613) 9273 4185 fax: (613) 9273 4091 email: gentryp@anz.com