Australia and New Zealand Banking Group Ltd. - Annual Report 2007

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Australia and New Zealand Banking Group Limited
25 October 2007
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Michael Smith
Chief Executive Officer
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Result Overview

Sep 07 v Sep 06

Headline profit - $4,180m Cash[*] profit - $3,924m

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13.3% 9.4%

Revenue Growth 12.1% (9.7%) Cash[] Profit Before Provisions (PBP) 11.5%**

Cash[*] EPS Dividend

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8.1% 8.8%

Highest growth in revenue and PBP for many years $1b DRP underwrite enhances strategic flexibility at low cost

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*adjusts headline numbers significant items & inc integration costs & fair value hedge gains/losses

Early observations on the business

A strong foundation for growth

� Personal great franchise, confident it will continue
� New Zealand very strong position, solid performance
� Institutional fundamentally good franchise but lost its way in some areas. New management in place, upside ahead
� Asia/Pacific performing well but need to accelerate.
� Wealth/Private Bank very strong growth and good momentum

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Create a stronger vision for ANZ’s future

1. Unlock the existing opportunities

Re-energise the organisation
Lift the energy and edge
Emphasise accountability
Focus on performance
Focus on managing positive jaws

2. Develop opportunities throughout region

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Deliver stronger returns for shareholders

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+
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Australia and New Zealand Banking Group Limited
25 October 2007
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Peter Marriott
Chief Financial Officer
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A record profit

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Headline Profit $4,180m 13.3%
less significant items $256m
Cash Profit $3,924m 9.4%
less hybrid dividends $37m
divided by Average no. of Ordinary Shares (1.0% increase) 1,845.5m
Cash Earnings Per Share 210.3 cents 8.1%
multiplied by Dividend Payout Ratio (2006: 64.4%) 65.0%
8.8%
Dividend Per Share 136 cents
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Why the strong underlying performance didn’t flow through to high EPS growth

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Very strong growth,
despite Institutional
“below plan” impact ~2.0%
Cash EPS growth
lower than plan
25.4 (2.6)
(1.8)
Cents per (3.1)
share (1.3%) (2.1)
(0.9%) 210.3
(1.6%)
(1.1%)
194.5
13.0%
8.1%
FY06 FY07
Cash EPS Cash EPS
business
FX impacts
Provisioning
Discontinued
growth
and preference dividends
Operating segment Change in the number of shares
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*credit loss rate change verses ELP rate change

Provision drag partly an unwind of unusually high benefit we flagged last year

What we said last year…

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Another way to think about this result
Another way to think about this result
A good result even without
A good result even without
provisioning benefit
provisioning benefit
Headwinds
had material Headwinds
had material impactimpact 1.4%1.4% 4.8%4.8% • •10%-11% a better reflection of underlying trajectory10%-11% a better reflection
1.4% of underlying trajectory
1.4% • •In line with PBP growth of In line with PBP growth of
10.4%
13.2% 10.4%
13.2%
• •Can’t completely ignore Can’t completely ignore
to 11%~10% ~10% provisioning impact -reflects de-risking benefits provisioning impact -partly partly
to 11% reflects de-risking benefits
coming through
coming through
• •Very good result given level Very good result given level
of investment in the
of investment in the
franchise
franchise
Cash EPS Underlying Cash
growthCash EPS Underlying Cash EPS Growth
growth EPS Growth
9
9
Provisioning drag
Provisioning drag
Non Continuing FY06 Other
Non Continuing FY06 Businesses Other
Non Continuing FY06 Businesses
Non Continuing FY06
FY06 Continuing
drag ex provision benefit FY06 Continuing
drag ex provision benefit Provisioning Benefit
Provisioning Benefit
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Provisions returning to more normalised levels
2 yr CAGR Cash Profit growth is 11.7%, in line with PBP growth
2.0% FY07 provisioning drag (0.9% compared to ELP) following 4.8% benefit in FY06

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Digging a little deeper in to where we performed (or not)

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Australia New Zealand Asia/Pac Other
PBP
Growth
12% 7% 26% 15%
% of Group PBP 37% 14% 3% 1%
17%
Retail PBP
13% Insto
Growth
15%
15%
3%
-27%
15%
27%
Institutional Institutional 4%
/Business
11%
-13%
6%
1%
Corp & Comm 4%
13% 210%
Wealth / Asia
4%
Partnerships
33% 20% <1%
45%
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Note: excludes Corporate Centre and non-continuing businesses

Strong balance sheet growth, particularly last two months

42 46 50 54 58 62 66 70 74 78 82 $b	Institutional lending growth (Institutional Net Lending Assets) Conduits – now in decline 15.8% 12.7% Additional $16b in RWA since Mar-07 Sep-06 Mar-07 Jul-07 Aug-07 Sep-07	Australia Growth in other products (% pa) FY07	Australia Growth in other products (% pa) FY07
		Mortgages	12%
		Credit Cards	7%
		Deposits - Personal	13%
		Deposits - Institutional	27%
		New Zealand (NZD)
		Housing	14%
		Credit Cards	8%
		Customer Deposits	8%

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Net interest margins – a few moving parts

Competition biggest driver of Competition in Australia the key margin decline driver

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(FY07 vs FY06) (competition impact on Group Margin)
bps
230.9
226.6
-0.5
-0.6
(4.3) (0.3)
(1.1)
(1.0) 4.3
-1.0 -1.0
(6.4) 219.1
(2.2)(0.8) -1.3
-2.0
-2.2
Sep-06 Sep-07
-7.5 bps
Half on Half 4.3 bps [^]
Asset Mix
Funding Mix
Other
Accounting noise
Competition
Asset W/sale Rate
competition
Liability W/sale Rate Fees Other
“Fee” Cards
Deposits
NZ Mortgages
Australian Mortgages Institutional assets
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^ adjusted for accounting noise refer slide 53

Strategy delivering on revenue growth, without reliance on buo ant e uit markets & des ite mixed Institutional y q y p

Delivering revenue growth at top end of target range

Revenue growth impacted by:

	top end of target range	• Revenue growth impacted by:
0% 2% 4% 6% 8% 10%	7-9% target range 7-10% target range 9.1% 10.2% FX adjusted Adjusted for FX, acq & disp 4.5% 6.3% 7.2% 8.4% 9.7%* FY03 FY04 FY05 FY06 FY07	�E*Trade and Stadium Australia transactions ($72m benefit) �FX impact ($83m Revenue drag) • Beware “switch” between NII and Trading ($99m) 53% 529 Other 77% 369 Profit on trading instruments 9% 487 FX earnings 11% 2,380 Total Fee income 5% 7,302 Net Interest income Growth (FY07vFY06) FY07 ($m) Income Markets total income 13%
	7-9% target range 9.1% 10.2% 4.5% 6.3% 7.2% 8.4% 9.7%

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Stadium Australia, ETrade and Fleet Partners transactions

A quick note on Markets income

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A reminder not to look at Trading Strong revenue growth from customer
Income in isolation activities in context of challenging
Total Markets Income market conditions in 2007…
($m)
13%
$m
781 800
24.4%
691
395
386
350
341 50 600
28
86
195
189 400
176
2.4%
181
200
193
146
156
74
-2
0
1H06 2H06 1H07 2H07 2005 2006 2007
Net Interest Income
Other Income (mainly FX) Trading business Sales business
Profit on trading securities
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We’ll continue to invest while managing the jaws

Still investing heavily, directed mainly to frontline

Maintaining Revenue/Cost jaws Revenue Growth Cost Growth

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10.2%
Acquisitions and 9.7%
Includes 7% disposals impacting
FTE growth expense growth
8.4%
7.6%
83 4,932 (11) 29 28 (25) 4,953 7.1%
244
6.1%
4,605
7.1%
7.6%
Sep-06 Sep-07 Sep-07 2006 2007 2007
underlying
reported
Adjusted
Jaws
FX impact ETrade
Fleet Partners
Other Operating Stadium Australia
Personnel
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Adjusted for FX, Stadium Australia, ETrade and Fleet transactions 14

Individual Provisions increased in line with expectations

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“New & Increased” commercial IP’s
Consumer IPs trending up
higher as expected…
with volume growth $m
500
424
400 347
$m
400 300 285 255 290
360
349 200
350
100
0
300
FY03 FY04 FY05 FY06 FY07
255
With more normalised levels of
250 229
commercial writebacks and recoveries
197 $m Unusually large
200 182
200 179 recovery not
165
160 repeated
150 150 105
100
100 80
100 60
50
50
0
1H07 2H07
FY03 FY05 FY07
0
FY03 FY04 FY05 FY06 FY07 FY07
<5m 5m-10m 10m-20m
Plan 20m-40m 40m+
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Portfolio growth driving Collective Provision

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FY07 Collective Provision
(CP) charge at low levels
Risk profile
208 2007 - modest deterioration in
$m Personal offset by NZ improvement
2008 - uncertain
141
69
83
24 6 Lending growth
12 Outlook
17 Sep 07 v Sep 06 FY08
Personal 12%
147 131 145 Institutional 16%
New Zealand 14%
-6
-49
-77 -68
-55 -8 Other
Includes Oil shock run-off
FY05 FY06 FY07
2008 – lower modelled run off
Lending Growth Risk Profile
Portfolio Mix Other
Non Continuing Businesses
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Other comprises Group Items and scenario impact including the modelled unwind of the oil price shock provision (raised in 2005) 16 to offset the emergence of related Individual and Collective provisions from these scenario impacts.

DRP underwrite – enhances strategic flexibility at low cost

Key Features

ACE Ratio

Expected to raise ~$1b

$1.5b acquisitions in 12 months, offset by Fleet Partners sale, funded internally

DRP discount of 1.5%
EPS impact ~0.4% in 2008

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EPS impact ~0.4% in 2008 %
5.00
• Additional ~35 basis points of 4.81 (0.52)
0.35 4.64
ACE capital 4.75
4.50
• Enhances strategic flexibility 4.29
4.25
•
Fair for all shareholders
4.00
3.75
Key dates 3.50
2007
3.25
Record Date: 14 November
3.00
Pricing Period Commences: 16 November 2007 2007 Pro
pre-acquisitions Actual forma
Pricing Period Concludes: 6 December
Allotment & Payment date: 21 December
Net acquisitions
DRP Underwrite
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Basel II impacts – reduction in RWA expected in 2008, but how much benefit offset by capital changes?

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Draft prudential standard impacting capital
(Tier 1 proposed capital impacts)
Plus loss
of CP in
total
capital
CAPITAL
Current Tier 1 Adjusted Tier 1
before RWA benefit
Capital
=
Ratio
Reduction in RWAs still unclear
RWA
QIS 5 results
•
Downturn LGDs and LGD
floors imposed by APRA
•
Downturn LGD factors on all
0 %
exposures, not just those
Other factors -10 -7.1 with high PD/LGD
Rating Agency view? -20 correlations
-30 • Subject to final ratification by
-29
APRA
-34
-40
Loss of AIFRS transitional relief
ANZ IRB Aust Majors G10 major bank
Advanced Average average
ded’n
50% of “Total Capital” changes CP deferred tax and Basel EL Lower Hybrid capacity
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Well positioned with liquidity and funding

ANZ has progressively reduced reliance on short term wholesale funding

Funding

Limited impact on ability to access short term or long term wholesale funding

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Ratio of short-dated wholesale
40% funding to net external assets
35%
30%
25%
20%
15%
10%
2000 2002 2004 2006
ANZ Peer average
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However cost of term wholesale debt has increased materially
Focus on customer deposits maintained:
Growth rate in Personal deposits approaching 20% annualised in Aug/Sep-07

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20% annualised in Aug/Sep-07 Stable and diversified funding base
(Group funding profile September 2007 ) 26% total
– Strong Institutional deposit Short term short
inflows ($14.8b, ~27% pa Personal ~ 36% wholesale debt term
14% funding
growth) Institutional ~ 40% Commercial
New Zealand ~ 20% Bills 4%
Other ~ 4%
Liquidity Term - resid.
mat <12 mths
8%
Strong Liquidity Portfolio ~$22b
Provides sufficient cover against Customer Group mat >12 mthsTerm - resid.
maturing short dated wholesale Funding 14%
debt and increased asset growth 53% Hybrids
SHE 1%
6%
19
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Liquidity

Strong Liquidity Portfolio ~$22b
Provides sufficient cover against maturing short dated wholesale debt and increased asset growth

But still likely to be some headwinds in 2008, mostly for sector rather than ANZ specific

•Basis Risk
•Funding costs

~ •Impact from strengthening AUD with 33% of earnings in foreign currencies

•Credit provisions - consensus for sector in 2008 is increase of 20% to 30%

Funding cost reducing but likely drag on 2008

Average 2007 cash-30d BBSW margin ~ 12bp

10 8 6 4 2 0

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Cost per additional basis point per annum

Currency exposures

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Other 6%
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•Dilution – slightly higher dilution expected with dividend underwrite

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PGK 1%
EUR 1%
USD 4%
AUD 67%
NZD 24%
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Key Takeaways

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Why the strong underlying performance didn’t flow
through to high EPS growth“belodespite Institutional Very strong growth, Cents per w plan”Why the strong underlying performance didn’t flow through to high EPS growthshare“below plan” 194.5 despite Institutional Very strong growth, Cents per share impact ~2.0% 194.5 13.7%impact ~2.0% 26.7 13.7% 26.7 (1.6%) (3.1) (1.6%) (3.1) (1.6%) (3.1) (1.6%) (3.1) (1.1%) (2.1) (1.1%) (2.1) (1.3%) (2.6) (1.3%)Cash EPS growth (2.6) lower than plan 210.3 Cash EPS growth lower than plan 210.3
8.1%
Cash EPSFY06 8.1% Cash EPSFY07
Cash EPSFY06 Cash EPSFY07 7
7
We’ll continue to invest while managing the jaws
Includes 7% 4,605FTE growth Still investing heavily, directed We’ll continue to invest while managing the jaws 244Includes 7% FTE growth Still investing heavily, directed 83 mainly to frontline 2444,93283 mainly to frontlinedisposals impacting ( Acquisitions and 11 expense growth 4,932) 29 disposals impacting (11) Acquisitions and expense growth 2829(25)284,953(25) 4,953 Maintaining Revenue/Cost jaws 8.4%Revenue Growth Maintaining Revenue/Cost jaws 6.1%8.4%Revenue Growth6.1%9.7%7.6%9.7%Cost Growth 7.6%10.2%Cost Growth 7.1%10.2%7.1%
4,605
7.1% 7.6%
Sep-06 Sep-06 underlyingSe 7.1% p-07 underlyingSep-07 7.6% Sep-07 reported Sep-07 reported Adjusted for FX, Stadium Australia, ETrade and Fleet transactions 2006 2006 2007 2007Adjusted2007Adjusted200714
Adjusted for FX, Stadium Australia, ETrade and Fleet transactions 14
Individual Provisions increased in line with expectations
400350300250200150100$m500 Consumer IPs FY03182400350300250200150100$m Individual Provisions increased in line with expectations 50 with volume growth 0 FY04197 Consumer IPs FY03182 above planMortgages with volume growth FY05229 ~$10m FY04197 above planMortgages FY06255FY05 trending up 229 ~$10m FY07360FY06255 trending up FY07349 Plan FY07360 FY07349 Plan commercial writebacks“New & Increased” 500400300200100200150100$m$m With more normalised levels of 5000<5m20m-40m commercial writebacks“New & Increased” FY03FY0380424500400300200100200150100$m$m higher as expected…With more normalised levels of 1005000<5m20m-40mFY03FY03FY0480424160347FY055m-10m40m+ higher as expected… 100179FY04FY05160347285FY055m-10m40m+FY07165 commercial IP’s 17910m-20mFY05FY06285255 and recoveries FY07165 commercial IP’s Unusually large recovery not 10m-20m1H07105repeatedFY06FY07255 and recoveries 2902H07Unusually large 60recovery not 1H07 105repeatedFY0729015 2 60H07 15
growth Provisioning Provisioning FX impacts FX impacts Discontinued business business Share dilution
Operating segment growth Discontinued Share dilution
Operating segment
Jaws
Jaws
Personnel Other Operating Personnel Other Operating FX impact Stadium Australia FX impact ETrade Stadium Australia Fleet Partners ETrade Fleet Partners
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Very good underlying growth, but Cash EPS softer

Very strong revenue growth, still investing in the business

Provisions well up, as expected, despite one off recovery

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Digging a little deeper in to where we performed (or not)
Wealth / Asia PartnershipsInstitutional Growth/BusinessPBPRetail45%15%6%Wealth / Asia PartnershipsInstitutional Growth/BusinessPBPDigging a little deeper in to where we performed (or not) Retail45%15%6% AustraliaGrowth 11%33%15%PBP 12%Australia% of Group PBPGrowth 11% 33% 15%PBP 12% Note: excludes Corporate Centre and non-continuing businesses % of Group PBP37%27%4% New Zealand InstitutionalCorp & Comm 37%27%4% -13%New Zealand InstitutionalCorp & Comm 7%20%13%13%-13%7%20%13%13%<1%14%4%4%Asia/Pac210%17%15%26% <1% 14%4%4%Asia/Pac3%1%3%210%Other17%-27%15%26%1%15%3%1%3% Other-27% Insto 1%15% 9 Insto
Note: excludes Corporate Centre and non-continuing businesses 9
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Great franchise in Personal, strong position in NZ, better result expected from Institutional, & Asia building Good foundation for 2008 and beyond

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Australia and New Zealand Banking Group Limited
25 October 2007
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Additional information
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Very high revenue and PBP growth, but bottom line less than expected

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Profit Before Provisions
Scorecard FY07
11.5%
619 (348) Volume Growth
- Lending � X
(160)
- ��
Deposits
(133)
7.6%
359
3,924
39.3%
19.7% 8.9% Interest Margin �
3,587
5.2%
Non Int. Income ��
9.4% Expenses � X
Cash EPS 8.1%
Provisions �
Sep-06 Sep-07
Cash Cash
Tax �
Cash EPS X
HoH 2.2% 12.7% 7.6% 36.3% (1.8%) 2.7%
�� Favourable to expectations
growth
Profit Before Provisions 4.1%
� In line with expectations
X Unfavourable to expectations
Other
Income income Expenses Provisions Tax & OEI
Net Interest
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Strong headline growth, assisted by sale of Fleet Partners

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Cash EPS 8.1%
Cash Profit growth
171 4,180
9.4%
69 16
NPAT 3,924
337
$m
3,688 (34) 26 (93)
3,587
Sep-06 Sep-06 Sep-07 Sep-07
Cash Cash
13.3%
Underlying growth
Ineffective hedge fair value gains/losses ANZ National Bank incremental integration costs Significant items Ineffective hedge fair value gains/losses NZD Revenue hedge mark to market volatility Significant items
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Divisional and Geographic Performance

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Sep-07 v
Division Sep-06 PBP ($m) Cash NPAT ($m)
Personal
16.7% 16.4% 1,442
Institutional
6.2% 6.2% 1,448
NZ Businesses [] 12.8% 6.5% 822 NZD
NZD NZD
PBP ($m) Cash NPAT ($m)
Geography
Australia 12.6% 13.1% 2,688
New Zealand 7.0% 1.1% 975 NZD
NZD NZD
Asia-Pacific 26.7% 23.1% 293
Increase
Sep-06
25
New Zealand Businesses, which excludes NZ Institutional and central funding
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RWA growth and significant investment spend offsets strong FY07 ACE generation

ACE Ratio within target range

Business as usual (3) bps One-offs (36) bps

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6.5 1.62 (0.78) AMMB (35) Final FY06
ETrade (9) DRP/BOP 5
SRCB (13) NZD FX hedges 6
6.0 SSI (3) NZ Tax assets 8
other (3) LMI (3)
(0.74)
Total (63) Total 16
5.5
5.0
(0.16) 0.11 (0.63)
4.68 0.03 4.65
4.5
0.16 4.29
4.0
3.5
3.0
Sep-06 Sep-07 Sep-07
Business as usual
Dividends^
Earnings+ Disposals
Other# Target Range
RWA Growth
INGA & Assoc Invest’s Other
one-offs
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+ net of preference share dividends & excluding non core items ^net of DRP/BOP accrual *excludes fx impact and impact of fleet partner sale #includes total FX impact on ACE Ratio and employee share issuances

Hedging the Kiwi dollar

F07 hedges

FY07 NZD earnings were effectively fully hedged and earnings were translated at an allin average rate of 1.14.

AUD/NZD hedges established where currency is believed to be outside normal trading range

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1.30
•
AIFRS forced the “precognition” of
$141m of hedging income directly
to Capital in FY07 – would have 1.25
otherwise been accrued over
future periods. 1.20 FY07
hedge rate
FY08 hedging position 1.14
• Approximately 50% of the 1.15
anticipated FY08 NZD revenue
Long Term
streams have been hedged at an 1.10 average
all-in rate of ~ 1.13. 1.143
• Translation of unhedged FY08 1.05 FY08 hedge
rate 1.13
earnings at current rates (~1.19)
would reduce EPS by ~0.4%
1.00
• 2001 2002 2003 2004 2005 2006 2007
Each 5 cent increase has a further
impact of ~0.4%.
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Divisional performance

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ANZ League tables – Profit Before Provisions growth

Full yr Rank	1H07 rank	Business*	Revenue Growth	Expense Growth	PBP Growth	% of group PBP
1	1	International Partnerships	61%	37%	80%	1.6%
2	2	Investment & Insurance Products	50%	42%	72%	1.3%
3	-	INGA	26%	n/a	25%	2.5%
4	5	Banking Products	15%	9%	22%	9.1%
5	3	Consumer Finance Australia	12%	1%	21%	11.1%
6	6	Small Business Banking	21%	22%	20%	1.7%
7	14	UDC (NZD)	8%	-3%	19%	0.6%
8	4	Pacific Businesses	12%	9%	16%	1.7%
9	11	Total Markets	13%	11%	14%	7.5%
10	8	Corp & Commercial Banking NZ (NZD)	12%	9%	13%	4.1%
11	7	The National Bank Retail (NZD)	8%	3%	13%	6.2%
12	13	Corporate Finance Continuing	18%	30%	12%	5.2%
13	15	Regional and Rural Banking	9%	5%	12%	2.8%
14	10	Rural Banking (NZD)	10%	6%	12%	2.2%
15	12	ANZ Retail Banking (NZD)	7%	5%	10%	4.4%
16	-	Private Bank / Retail Specialist Units (NZD)	11%	16%	9%	1.0%
17	9	Esanda Group	6%	5%	7%	3.9%
18	17	Business Banking Australia	7%	6%	7%	6.7%
19	16	Mortgages	6%	8%	5%	9.3%
20	18	Trade and Transaction Services	6%	7%	5%	7.0%
21	19	Relationship Lending	-1%	41%	-2%	11.8%
22	20	NZ Institutional Continuing (NZD)	-9%	6%	-14%	4.3%

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Personal: a strong focus on customers…

A leader in customer satisfaction

(Main Financial Institution: 6 months rolling[*] )

Upward trending customer satisfaction – on 3 month rolling average although more volatile measure

(Main Financial Institution)**

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85
80
75
70
65
60
55
Aug- Aug- Aug- Aug- Aug- Aug- Aug- Aug-
00 01 02 03 04 05 06 07
ANZ Peer 1 Peer 2
Peer 3 Peer 4
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*Source: Roy Morgan Research – Aust MFI Pop’n aged 14+, % Satisfied (Very or Fairly Satisfied), 6 mth moving average

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85
80
75
70
65
60
55
May-06 Aug-06 Nov-06 Feb-07 May-07 Aug-07
Committed to customer convenience
(# branches and ATMs)
80 new branch rollout since
October 2004 now completed
850 2,500
800 2,200
750 1,900
700 1,600
650 1,300
600 1,000
Sep-04 Sep-05 Sep-06 Sep-07
Branches (LHS) ATMs (RHS)
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**Source: Roy Morgan Research – Aust MFI Pop’n aged 14+, % Satisfied (Very or Fairly Satisfied), 3 mth moving average

… reflected in growing market share

Number 2 in customer numbers

(Traditional Banking customer share)**

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22% Peer 1: 39.1% (Jul 07)
18%
14%
10%
Jul-04 Jul-05 Jul-06 Jul-07
ANZ Peer 1 Peer 2
Peer 3 Peer 4
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Increasing share of wallet (% increase traditional banking products Jul-04 to Jul-07[] )**

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6.4% Traditionally underweight in
share of wallet; gap to major
peer average has reduced from
8.2% to 4.3%
3.4%
1.9%
1.5%
ANZ Peer 1 Peer 2 Peer 3
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*** … Continuing to attract new accounts Banking Products transaction account numbers**

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----- Start of picture text -----

000s
500
2H06 benefited
450 from Visa Debit
400 Card
350 introduction
300
250
200
150
100
50
0
FY04 FY05 FY06 FY07
New Net Accounts
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**Source: Roy Morgan Research – Traditional Banking includes customers aged 14+ with accounts, loans or cards. 12 mth moving average

*excludes Select accounts

Banking Products: growing above system

FUM growth across all products…

(FUM growth+$5.3b)

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+14%
$43.8b
$38.5b
10.3
8.8
15.2
13.4
7.5 9.1
8.8 9.2
FY06 FY07
Transactions Savings
Term Deposits V2 Plus
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… and growing above systemˆ (Household Deposits including V2 Plus)

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V2 Plus
contribution
1.4
1.2 0.2% System = 1.0
1.0
0.8
0.6
1.1
1.0
0.4 0.8 0.8 0.8
0.2
0.0
ANZ Peer 1 Peer 2 Peer 3 Peer 4
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Continuing to achieve growth with …Delivers 15% increase in
strong margins… Revenue
Size indicates NII Contribution of new flows
(i.e. growth x margin)
8% ANZ 15.0%
Peer 1
2% Interest
6% Rate Benefit
Peer 4
4% Peer 3
10.2%
Peer 5 Peer 2
2%
0%
FY06 FY07
0.00% 0.50% 1.00% 1.50% 2.00%
Margin
Deposit FUM Growth
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^ Source: Company documents, ABA market share, ANZ Banking Product analysis

Mortgages: strong volume growth; results impacted by basis risk

Continued strong Retail FUM growth, offset by ANZ wholesale decline ($b)

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-8.8%
- 5.2
8.1%
-6.1% 5.7
6.2
6.6 7.3%
5.6%
6.4% 108.7
101.3
95.9
90.1
1H06 2H06 1H07 2H07
ANZ Retail ANZ wholesale
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Consistent channel mix (% flows by distribution channel)

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By FUM
2006 2007
23% 24%
19% 19%
40% 40%
45% 45%
37% 36%
36% 36%
2006 2007
Broker Network Specialist
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… ANZ Retail is the second fastest growing major bank*

Normalising for basis risk shows consistent growth

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FY06 Mortgage portfolio revenue
FY07
growth
System ~15%
= 1.0
~10% ~10%
1.12 2006
1.02
0.79 0.75 0.92 0.94 0.84 ~6% 2007
0.66
ANZ ANZ ANZ ANZ Peer 1 Peer 2 Peer 3 Peer 4 Revenue growth Revenue growth
Retail Retail adjusting for basis risk
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*Source RBA & APRA data – August 2006 to August 2007 - ANZ Retail includes all channels except Wholesale

Consumer Finance: continuing to deliver

Solid FUM growth for cards and personal loans

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10.3%
8,444
7,655
1,803
1,465
6,190 6,641
Sep-O6 Sep-07
Cards Personal Loans
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No material adverse trends in arrears rates

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(>60 day arrears to
5.0% outstandings)
4.0%
3.0%
2.0%
1.0%
0.0%
Sep-03 Sep-04 Sep-05 Sep-06 Sep-07
Low Rate Loyalty
Proprietary Portfolio
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After FY06 Low Rate Launch Acquisition Mix Becomes More Normalised % Acquisition growth by cards product

Increasing ATMs, increasing convenience ATM numbers

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100% 2% 6%
80%
35%
51%
Boosted by
60% “acquisition
campaigns”
40% 38%
26%
20%
21% 21%
0%
2006 2007
Loyalty^ Non Loyalty
Low Rate Commercial Cards
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----- Start of picture text -----

2287
1887
Goal to 2010:
More ATM
locations than
any major bank
2006 2007
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^Loyalty: Credit Cards with mandatory loyalty program attached. Non Loyalty: Credit Cards without a loyalty program. Low Rate:* Credit Cards with low interest rate and without a loyalty program.

Regional, Rural and Small Business Banking: delivering a solid erformance p

Rural Commercial & Agribusiness Products

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(PBP $m) (FUM $m)
12% 16% 16%
169 2,782 7,841
151 2,400 6,755
PBP Deposits Lending
2006 2007 2006 2007
Maintaining strong customer
satisfaction while supporting the
rural community
85
80
75
70
65
60
Sep-05 Mar-06 Sep-06 Mar-07 Aug-07
ANZ Peer 1 Peer 2 Peer 3
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Small Business Banking (PBP $m) Products (FUM growth $m)

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20% 24% 43%
103 3,396 471
86
2,730
330
PBP Deposits Lending
2006 2007 2006 2007
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Rapid business expansion continues

	Staff	Customers	FUM ($m)
2004	6	190,000	1,980
2007	220	266,000	3,780

Committed to Small Business Specialist available in every branch by 2010

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*Source: Roy Morgan Research – Aust Rural MFI Pop’n aged 14+, % Satisfied (Very or Fairly Satisfied), 6 mth moving average

Esanda: Improved performance, stable portfolio

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Improving Revenue
Growth
6.4%
392.4
369
Revenue
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(Mkt Share %)

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----- Start of picture text -----

Business Equipment Auto Finance
Finance
18.9% 18.9%
9.2%
8.1%
2006 2007 2006 2007
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Recovery in New Vehicle Sales*

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Debentures Stable
(FUM EOP $m)
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($b)

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New Business Writings Units 000’s
7,974 8,073 New Car Sales
5.6 5.7 1200
5.5
5.4
1100
1000
900
800
700
600
500
FY06 FY07
2004 2005 2006 2007
36
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*Source: Auto Market Share from ABS, business Equipment Finance from TNS

Pacific performing well

Investment & Insurance Products

Pacific

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Continuing to grow our planner network…
(New planner numbers)
14% 14%
9%
ANZ INGA Industry
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ETrade customers have doubled in
two years
000’s
102%
500
400
300
200
100
0
Sep-O5 Sep-O6 Sep-O7
Share of new on-line broking customers
25% (August 2007)
22%
7%
5%
ANZ Peer 1 Peer 2 Peer 3
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*Source: AC Nielson Retail Brokerage Report 1H07

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Strong market share in major markets
(Country market share FY07)
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51% 50%
44%
37%
Fiji PNG Vanuatu Samoa
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Strong revenue growth
($m)
12%
239
213
2006 2007
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Institutional: a mixed result

Specialist product businesses continue to lead performance

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----- Start of picture text -----

(PBP growth FY07)
14.5%
Impacted by low average
11.9%
asset growth and high
margin decline
6.7%
5.0%
Markets Corp TTS^ Bus
-2.1%
Finance Banking
R’ship
Lending
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Performance by region

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----- Start of picture text -----

(PBP growth FY07)
% of
total 76% 12% 4% 5% 3%
PBP
13.5%
11.3%
5.6%
-12.9%
-17.1%
Aus NZ Europe Asia Pacific
& US
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^TTS: Trade and Transaction Services

* Continuing business

Investing in staff remains a priority to drive future growth (FY 07 % growth)

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5225
6.3%
4915
6.2%
4629 2007 FTE growth;
4% Markets
4% TTS^
25% Corp Fin#
2005 2006 2007
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Key regional impacts

– Australia Strong Market sales revenue and Corporate Finance Alternative Assets and Private Equity income; subdued lending growth, margin decline in Relationship Lending and 1H07 Business Bank margin competition

– New Zealand Reduced trading income (on the back of a strong FY06)

– Europe and US Impacted by AUD/USD exchange rate and 2006 one-offs

– Asia Markets business benefiting from higher margins and equity returns, strong Corporate Finance fee income and trade flows.

Pacific –Strong foreign exchange earnings

# off low base numbers, FTE growth 15% adjusting for Stadium Australia 38

The underlying franchise is in a good position…

New branding reaffirms capabilities and offerings

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Extensive customer and staff research undertaken to develop partnerships focused on;

Institutional No. 1 Relationship bank status maintained

Large Corporate & Institutional Relationship Banking survey^

No.1 in 11 categories including:

Share of Lead and Overall Relationships
Most Trusted Adviser
Knows Company's Industry Best
Understands Offshore Banking[*]
Understanding industry sectors, business needs and the operating environment
Commitment to clients for the long term
Delivery of products, solutions and expertise

Transaction Banking survey^

No.1* in 9 categories including:
Transaction banking relationship strength[*]
Overall customer service

After 3 flat periods, strong turnaround in Corporate Banking’s contribution to group (Income contribution $m) #

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4 344
18
8
20
294 294
281
17%
1H06 2H06 1H07 2H07
Finance
Markets
Capital Corporate
Working
Other divisions
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Banking platform customer service / support
Trade Services lead relationship

Relationship Market Penetration (%)

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----- Start of picture text -----

72 70
67 68
65 64 64
60 54 54 52 50
47
45 44 44
37 37 35 37
18 18
13 13
'06 '07 '06 '07 '06 '07 '06 '07
ANZ Peer 1 Peer 2 Peer 3
Lead customers Significant customers
Total customers
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# Source: Internal customer profitability system (MARS), certain fees & transactions measured on cash basis

No.1 of big 4 competitors

^ Peter Lee Associates, 2007

Specialist businesses: good underlying performance

Markets

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----- Start of picture text -----

Continued investment in Frontline
FTE…
785 4% 816
22%
641
2005 2006 2007
.. Driving revenue growth
($m)
13% 781
14% 691
605
2005 2006 2007
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Markets has developed a strong franchise in a number of geographic regions (Market revenue by geography 2007)

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----- Start of picture text -----

New Zealand
18%
Australia
56% Asia Pacific
19%
7%
Northern Hemisphere
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* Corporate Finance Good underlying performance

Revenue growth ($m) Revenue by Geography Strong revenue growth despite Strategic focus on NII down from flat loan growth in Asia volumes and sub prime impacts

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----- Start of picture text -----

New Zealand
500 11% 10%
13% Asia
400 Australia
8%
300 Europe &
9%
America
200
70%
100
2005 2006 2007
Strong revenue in growth businesses
Revenue by Business
Strong performance driven by
buoyant private equity
investment performance Strong revenue
(increased underwrites) growth and
ANZ accelerating FUM
Capital
20%
Structured Debt Advisory
5%
53% 5% Alternative
Assets
12%
5% Capital Solutions
Natural resources boom
Debt Capital Markets
driving project finance
growth
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CF Continuing Ex DIT/Stadium 40

Working Capital

Relationship Lending

Subdued lending growth, boosted by strong Aug–Sep 07

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----- Start of picture text -----

Conduits:
49,476
up $2b
40,446 41,842
18.2%
3.5%
2H06 1H07 2H07
Revenue growth impacted by
margin compression
Significant Impacted by
Includes impact of
volume growth competitive
mark to market on
in Aug/Sept will pressures and
benefit 2008 conduits credit default swaps
17 37
759 14 753
FY06 FY07
Lending volume benefit Margin impact other
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Trade and Transaction Services

Turnaround in second half with good deposit growth, increased customer volumes in Trade and Financial Institution products

CMTS: 8.8% 2H07 PBP growth (hoh) from strong deposits and favourable rate environment

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----- Start of picture text -----

8.5%
5.8%
5.5%
3.1%
1H07 2H07
Revenue Expenses
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Global Trade: 14.1% 2H07 PBP (hoh) with strong second half revenue through customer initiatives and increase in Trade limits
• FIP: PBP growth of 11.2% driven by increased volumes and rates in Clearing and Payments.

Strong deposit growth (total deposit balance $m)

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----- Start of picture text -----

26.0%
12.5%
39,456
35,069
31,309
2H06 1H07 2H07
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Business Bankin restructured for rowth g g

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----- Start of picture text -----

Good FUM growth after … and more stable … leading to improved
1H07 restructure… ($b) margins in second half performance
index (Aug-05 index = 100) (%)
110
30.3 15%
28.0
26.7
10.3%
24.9 4.0%
8.0% 100
17.1
14.9 15.5 7%
13.8 6%
90 5%
5.6% 4%
5.9% 3%
6.3% 2%
80 0%
11.1 11.8 12.5 13.2
2H06 1H07 2H07
Income
1H06 2H06 1H07 2H07 70 1H06 2H06 1H07 2H07 PBP 1H07 impacted
NPAT by 3 ex-
Lending Margin (secured book) corporate losses
Deposits Lending -8%
…with a strong position to continue to drive performance
Coherent Strategy and Execution Plan ‘Business Bank of #1 customer satisfaction
(‘The Business Owner Agenda’) the year’ position amongst the majors
%
Continued investing in the business; 90
30 FTE in 2007, 6 new business centres,
dedicated Business Banking Manager 80
segment, Product Partners (e.g. 30 FTE in
Markets) 70
FY08 investment in sales, training, process ANZ
simplification and eBanking Peer 1 60
Peer 2
Improved market share (12.7% Sep-07 v
Peer 3
11.8% Sep-05) 50
Peer 4
Aug-06 Feb-07 Aug-07
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Source: TNS

Institutional Asia: strong low-risk growth; continuing expansion

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----- Start of picture text -----

Institutional Asia continues … with all business lines The strong Asian economies &
to post double digit growth… showing consistent growth deal-flows between
$M CAGR: Revenue 22% $M Profit before provision $B Australasia & Asia provide a
200 Expenses 17% 140 5 key base for growth
NPAT 15% 120 CAGR: Deposits 30%
150 100 4 Loans 18%
80 3
100
60
2
40
50
1
20
0 0 0
2005 2006 2007 2005 2006 2007 2005 2006 2007
Revenue Expenses NPAT Corp Finance Working Capital Net loans Deposits
Markets Average loans & deposits
Loan growth has been geared The business has achieved We will continue to grow the
towards higher quality exposures a number of milestones in franchise through a range of
the past year long- & short-term initiatives
• Acquisition of a 10% stake in • Expand aggressively in Vietnam
45.8% 47.8% 48.3% Saigon Securities Incorporation, through branch & product growth
the leading securities & • Focusing on key growth areas like
investment banking company in commodities, capital markets &
17.2%
21.6% Vietnam investor sales
27.0%
• Opened new branch in Medan, • Work more closely with partner
31.3% 18.8% 17.2% Indonesia, and representative banks to build product capability &
5.7% 11.8% 7.5% office in Guangzhou, China expand our distribution network
• Best Trade Bank in Asia – Trade • Examine inorganic growth options
2005 2006 2007 & Forfaiting Review in markets where we are
BB- & lower BB+ to BB • Branch expansion project in underweight
BBB- AAA to BBB Vietnam progressing well
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Branch expansion project in Vietnam progressing well

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Note: All comparisons are at constant exchange rates

INGA: strong performance continues in funds mana ement and risk businesses g

**Strong FUM growth…* … delivering strong revenue and profit growth ($m)**

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----- Start of picture text -----

($b) CIE up 21% Return on ANZ
31% investment
69
312 10.3%
19% 50 49 12
56 243 57
8.3%
21% 10%
186
243
13%
43.8 46.0
38.8
33.7
FY06 op profit FY07 op profit FY07 NPAT FY06 FY07
1H06 2H06 1H07 2H07 YOY growth
Mgt Life Risk income Expenses & tax
Funds income
Capital inv earnings
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Number of advisers

2007 highlights

2008 focus

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----- Start of picture text -----

1000 902
Sep-06 771
800
Sep-07
600
432
374
400
200
0
ANZ channel Aligned channel
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Ranked No 1 amongst employer super providers[1]
Ranked No 3 in industry for adviser numbers
Value of new business up 72%
Oasis Asset Management, 41% growth in FUM since acquisition
In-force premium market share up 12.5%, ranking # 3 in the industry[2]
Product / platform portfolio enhancements for Personal Investments and Life Risk products
Building leading e-business capabilities
Embed new organisation structure
Deliver service proposition to customers and advisers

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1Heron Partnership 2 Plan for Life June 2007

*Retail & Mezzanine (excl cash)

New Zealand Businesses : strong performance*

Strong underlying profit growth….

…driven by strong lending growth…

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----- Start of picture text -----

PBP 13%
NZD m
NPAT 6%
1,290
1,144
822
772
FY06 FY07
PBP NPAT
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----- Start of picture text -----

Lending 14%
NZD b Deposits 8%
80.9
70.8
44.6
41.2
FY06 FY07
NLA Deposits
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…and good Revenue/cost jaws…

…but NPAT moderated by lift in provisions from unsustainably low levels in 2006

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----- Start of picture text -----

Rev growth
8%
Exp growth
5%
4% 4%
FY06 FY07
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*excluding Institutional and central funding units

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NZD m Total Provision Charge
63 108 3 2 37 41
140
100
CP
60 Recoveries
New IPs
20
Total
-20
-60
1H05 2H05 1H06 2H06 1H07 2H07
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New Zealand Businesses: double digit PBP growth

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----- Start of picture text -----

New Zealand Banking
New Zealand Businesses
13%
----- End of picture text -----*

• • • •	i l	43 153 283 433 305 29 101 177 271 189 PBP FY07 NPAT FY07 6% 6% 2% 11% 26% NZD m 10% 13% 12% 19% 20% 19%	43 153 283 433 305 29 101 177 271 189 PBP FY07 NPAT FY07 6% 6% 2% 11% 26% NZD m 10% 13% 12% 19% 20% 19%	43 153 283 433 305 29 101 177 271 189 PBP FY07 NPAT FY07 6% 6% 2% 11% 26% NZD m 10% 13% 12% 19% 20% 19%	43 153 283 433 305 29 101 177 271 189 PBP FY07 NPAT FY07 6% 6% 2% 11% 26% NZD m 10% 13% 12% 19% 20% 19%	43 153 283 433 305 29 101 177 271 189 PBP FY07 NPAT FY07 6% 6% 2% 11% 26% NZD m 10% 13% 12% 19% 20% 19%	43 153 283 433 305 29 101 177 271 189 PBP FY07 NPAT FY07 6% 6% 2% 11% 26% NZD m 10% 13% 12% 19% 20% 19%

		ANZ Retail National Bank Retail Corporate & Commercial Rural Continued growth n customer satisfaction Increased customer main bank share in business banking Improved Home oan market share NII driven by robust balance sheet growth (lending 13%, deposits 11%) • Service strategy announced in ’06 underpins continued business out- performance • 2H07 home lending share of growth exceptional at 24% • New customer innovations – multi-lingual ATMs, mobile phone banking • Strong lending growth of 16% • Cost growth 9% reflects frontline FTE increase • Provisioning up, but sound credit quality maintained • Launched Privately Owned Business Barometer • Revenue growth of 10% delivered by 16% lending growth • JAWs strong at 4% • Gain in market share • High level of customer satisfaction • Introduction of Rural Growth Funding to the market

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* Contribution from ING JV and Bonus Bonds not included in above data

Retail Banking: Customer focus and multi-brand strategy driving success

Continued strong performance in customer satisfaction[1] ...

…driving above market mortgage … growth[2]

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----- Start of picture text -----

16%
Mortgage Volume Growth Rate (YoY)
ANZ National
15%
14.5%
14% 14.2%
Market
13%
12%
Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07
----- End of picture text -----

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----- Start of picture text -----

Mortgage Volume Growth Rate (YoY)
75% ANZ National
15%
14.5%
65%
14% 14.2%
Market
55%
13%
45% 12%
Sep-05 Mar-06 Sep-06 Mar-07 Sep-07 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07
ANZ National Peer 1
Peer 2 Peer 3 Peer 4
…as well as growing our share in …while maintaining credit quality
consumer finance [3…]
15%
Consumer Lending Volume Growth Rate (YoY) 12.6% % Gross Lending Assets > 60 Days Past Due
0.4%
ANZ National
10%
0.3%
Market
7.1% 0.2%
5%
0.1%
0%
Sep-04 Sep-05 Sep-06 Sep-07 0.0%
Sep-06 Dec-06 Mar-07 Jun-07 Sep-07
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Source: 1. ACNielsen Consumer Finance Monitor©, Customer Service Rating (Excellent/ Very Good), rolling 4 quarter averages; 2 . RBNZ C5 Table & ANZN 50% RWA;3. RBNZ C5 Table, Banks and NBFI's, ANZN nos exclude UDC

Corporate and Commercial: Consistent performance driven b solid lendin rowth y g g

…driving strong profit across businesses

Strong lending growth

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(pbp growth)
NZD m
15.6%
180
9.7%
140
100
13%
8.5%
60 41% 5.4%
20
Commercial Corporate Property
FY 2005 FY 2006 FY 2007
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NZD b
20
Lending 16.1%
Deposits 4.9%
15
10
5
0
FY06 FY07
Lending Deposits
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Performance HighlightsPerformance Highlights

Credit quality remains strong

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•• Maintained #1 share of customers through Maintained #1 share of customers through our two brandsour two brands [1][1]

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Individual Provision Charge
NZD m
9 48 (1) (10) 2 2
60
40
20
0
-20
Mar-05 Sep-05 Mar-06 Sep-06 Mar-07 Sep-07
New & Top-ups Writebacks and recoveries
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•• Significant share of lending growth from new Significant share of lending growth from new customerscustomers
•• Improved staff engagementImproved staff engagement
•• Improved revenue per FTEImproved revenue per FTE
•• Decreased cost to income ratio to 32.1%Decreased cost to income ratio to 32.1%

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Source : 1. TNS Conversa Corporate and Commercial, Calculated Main Bank Share, Turnover $2m - $100m, rolling 4Q, June 2007

Rural Banking: Premium franchise in a strong sector UDC: turnaround well underwa y

Rural Banking

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Steady growth in profit…
(NZD m pbp )
+12%
153
137
124
FY05 FY06 FY07
…improving market share position
(share of lending to agriculture sector) [1]
41%
40.3%
39.9%
40%
Incl ~48% share of
May - June drawdowns
(peak months in Rural)
39%
Sep-06 Dec-06 Mar-07 Jun-07 Sep-07
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Strong position in booming dairy industry
(composition of portfolio)
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23% Sheep/Beef
Dairy 64% 4% Cropping
6% Horticulture
3%
Other
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1. RBNZ C5 table and ANZN SSR

UDC

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Balance sheet growth in FY07 following
three years of decline…
(Net Lending NZD b)
1.93 +13%
1.83
1.76
1.65 1.67
1.62
1H05 2H05 1H06 2H06 1H07 2H07
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…leading to improved profit performance…
(NZD m pbp)
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28
+22%
24
22
20
18 18
1H05 2H05 1H06 2H06 1H07 2H07
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…while avoiding exposure to the higher risk property development market[2]

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UDC 16% 84%
Peer 1 32% 24% 44%
Peer 2 9% 33% 58%
Peer 3 4% 78% 18%
0% 20% 40% 60% 80% 100%
Consumer Property Other Commercial
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2 UDC exposures @ 30 Sept 2007. Peer data based on latest 49 company accounts or prospectus

Asian Operations

New Asia Pacific Structure

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Personal Asia Pacific Institutional
Division Division Division
Retail - Asia Institutional - Asia
South & South North East
Pacific
East Asia Asia
Indonesia, China, American Samoa,
India, Vietnam, Hong Kong, Cook Islands, Fiji,
Singapore, Taiwan, Guam, Kiribati,
Cambodia, Laos, South Korea, New Caledonia,
Malaysia, Japan Papua New
Thailand, the Guinea, Samoa,
Philippines Solomon Islands,
Timor Leste,
Tonga and
Vanuatu.
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AMMB: agreements finalised for our largest International Partnership

Eight member ANZ team in place July 2007

Mgt board Deputy MD, CFO & CRO Retail - Head of Retail Distribution - Head of Retail Strategy & Development
Projects Head of Project Management Office Risk - Head of Retail Credit HR - Senior Consultant
Head of Retail Strategy & Development

Strategic Focus for Value-Add

Strategic Focus for Value-Add	Strategic Focus for Value-Add
Priority	Area
Organisational restructure	Risk, IT, SME, Retail Product & Distribution
Reducing NPLs	Risk
Lifting ROE	Asset Finance
Reducingcost of funds	Treasury
Executing against strategy	Retail Banking
Credit Cards	Retail Banking
Building FX/Derivate Products	Institutional

Progress since Acquisition

Agreement on strategic direction
Lower NPL ratio via write-offs, recoveries, sales
Privatisation of Investment Bank underway
Organisational restructure underway

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Asia – we have acquired well, significant value created

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Initial investments
Current investment value
A$m
A$m A$m
1,000 2,000 4,000 Chinese
banks now
900 847 1,800
trading up to
3,500
800 1,600 ~30x-50x PE
700 1,400
3,000 ?
Cash investment
600 Cumulative investment 1,200
500 1,000 2,500
400 800
323
2,000
300 600
231
200 159 400 1,500
100 66 200
6 14 16 12
1,000
0 0
500
0
1999 2007
for ANZ shareholders
Significant value created
Panin AMMB SRCB
Indo. Cards Metro Cards ANZ Royal Sacombank Bank of Tianjin Vientiane Cash Invested Potential Value
Gain on non-listed
Gain on other partnerships
Chinese partnerships
Gain on listed partnerships
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Margin Analysis

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Group half on half margin down 9.2 bps on headline basis, 4.3 bps on an underlying basis

Reported margin down 9.2bps (1H07-2H07)

Fee competition the largest component of margin decline (competition impact on Group Margin)

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bps
0.7
223.8
218.9
(4.9) 0.0 (0.5)(0.5)1.3 -0.2
(2.6) 214.6
(1.2)
(0.8) -0.7 -0.7
-0.8
-0.9
-1.2
Mar-07 Sep-07
4.3 bps
Asset Mix
Funding Mix
Other
Competition
Accounting noise
competition Fees
Cards Other
Asset W/sale Rate
Liability W/sale Rate Deposits
“Fee”
Australian Mortgages Institutional assets NZ Mortgages
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Personal: margins impacted by mortgage competition

Mortgages key driver of competition

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Wholesale Rate benefits offset by (competition impact on Personal Division
increased Competition Margin FY06 – FY07 )
(FY06-FY07)
-0.3
-0.6 -0.7 -0.6
bps -0.8
4.6 (7.0)
1.5 0.4 (2.8)
-4.0
235.2
(2.2)
229.7
2H07 margin down 4.6bps
(Personal Margin 1H07-2H07 bps )
232.1
(0.5) (0.2)
227.5
(3.6) 1.2
(3.4) 1.9
Sep-06 Sep-07
-5.5bps
Mar-07 Sep-07
-4.6bps
Rate
Rate
Asset Mix
Funding Mix
Competition Other
Asset W/sale Liability W/sale
Funding Mix Asset mix
Asset W/sale rate Liability W/sale rate
Other
Competition
Cards
Other
Fees
Deposits Esanda
Mortgages
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Institutional: significant impact from Markets and accounting ‘noise’

Competition impact mainly in fees

Reported NIM decline of 18.0bp adversely impacted by accounting ‘noise’

(competition impact on Institutional Division Margin FY06-FY07 bps )

bps (FY06-FY07)

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-0.7
-1.2
-2.5
-4.7
Business R’Ship Deposits Fees
Banking Lending
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184.6 -1.2
-2.5
-4.7
176.4
Business R’Ship Deposits Fees
(8.2) 2.8 Banking Lending
(4.0) 0.2 2.7
Reported 2H07 margin down 12.1bps,
up 4.4bps on underlying basis
166.6 bps
(9.1) 172.8 (Institutional Margin 1H07-2H07 bps )
(2.4)
160.7
156.3 (1.1) 1.3 0.5
4.4 (4.1) 3.4
(16.5)
Sep-06 Sep-07
-9.8bps
Mar-07 Sep-07
+4.4bps
Accounting noise Asset Mix
Funding Mix Other
Asset W/Sale Rate Competition
Liability W/Sale Rate
Funding Mix Asset Mix
Other
Competition
Accounting noise
Asset W/Sale Rate Liability W/Sale rate
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New Zealand Businesses: Competition driving margin decline

Key driver of competition impact

(competition impact on New Zealand Businesses Margin FY06-FY07 bps )

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Competition driving margin decline Margin FY06-FY07 bps )
(FY06-FY07)
0.9
bps
256.4 -0.5 -0.3
-2.0
-4.0
-5.2
247.1
(8.0)
3.7
(1.2) 0.0
2H07 margin down 3.5bps
(New Zealand Businesses Margin 1H07-2H07 bps )
(11.1) 7.3
248.9
245.4
0.0
(3.6) (0.6) 1.9
(4.2) 3.0
Sep-06 Sep-07
-9.3bps
Mar-07 Sep-07
-3.5bps
Funding Mix Asset Mix
Asset W/Sale Rate
Liability W/Sale Rate
Comp. Other
Funding Mix Asset Mix Comp. Other
Asset W/sale Rate Liability W/sale Rate
Deposits UDC Fee
Cards
Rural & Business
Mortgages
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Rural, Business Corporate & Commercial

Credit Quality

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Expected Loss – Commercial lending

Commercial IP Charge vs Commercial Expected Loss (YOY)

Commercial IP Charge vs Commercial Expected Loss (HOH)

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$m $m
400 93% 100% 200 100%
192
370 367
175
344
80% 80%
72% 321 160 161
300 345 150
293 145
148
247 60% 53% 52% 60%
53%
200 44% 100
102
34%
40% 34% 83 40%
79
26%
128 124
100 50 13%
49
20% 20%
84
1%
22
1
0 0% 0 0%
FY03 FY04 FY05 FY06 FY07 1H05 2H05 1H06 2H06 1H07 2H07
1
Commercial Expected Loss Commercial IP Charge Commercial Expected Loss Commercial IP Charge
IP Charge / EL (RHS) IP Charge / EL (RHS)
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Non Performing Loans and 90 Days Past Due Loans

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Non Performing Loans
$m
1,400
1,200
1,000
800
600
400
200
0
2002 2003 2004 2005 2006 2007
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New & Increased Non Performing
$m Loans # of loans
1,200 60
1,000 50
800 40
600 30
400 20
200 10
0 0
FY03 FY04 FY05 FY06 FY07
New NPL Australian Consumer Finance
New NPL Other
Number of New NPL >$1m (RHS)
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90 Days Past Due Loans Individual Provision Charge &
% of Gross Lending Loss Rate
Assets
$m bps
0.25%
600 40
0.20%
500
30
0.15% 400
300 20
0.10%
200
0.05% 10
100
0.00%
0 0
'Mar-05 Sep-05 Mar-06 Sep-06 Mar-07 Sep-07 FY03 FY04 FY05 FY06 FY07
IPC Loss Rate
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Breakdown of collective provision charge

FY07 Collective Provision charge

Business Unit (A$m)	Asset Growth impact	Risk / Mix impact	Other*	Total
Group	145	6	(68)	83
Institutional (excl. BB)	14	6	(29)	(9)
Business Banking	14	10	(5)	19
Personal (excl Consumer Finance)	31	(6)	(13)	12
Consumer Finance	28	20	(10)	38
New Zealand Businesses	36	(10)	(9)	17
Partnerships & Private Bank	23	(14)	(1)	8
Other^	(1)	-	(1)	(2)

Consumer Finance driven by slightly higher year on year delinquencies and bankruptcies as expected.
Business Banking driven by strong growth and a weakening risk profile.
New Zealand largely driven by strong Retail and Corporate & Commercial Banking growth.
Collective Provision Charge is determined as follows:
CP Balance is largely driven by asset growth and movement in risk profile;
Individual customers assigned independent risk grades and security coverage indicators; and
CP methodology based on tenor, risk profile, emergence period and exposure size.

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^Includes Group Items.

Comprises scenario impact including the modelled unwind of the oil price shock provision (raised in 2005) to offset the emergence of related Individual and Collective provisions from these scenario impacts.

Mort a es and Credit Cards: credit ualit remains sound g g q y

Mortgages Australia (Retail) Mortgages- Strong LVR profile

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80% LVR at origination Sep-06
60% LVR at origination Sep-07
Current LVR Sep-06
40% Current LVR Sep-07
20%
0%
0-60% 61-75% 76-80% 81%-90% 91%+
Average Days to Exit increasing…
300 (from date of transfer to third party solicitors)
250 Retail
200
150
100
50
0
Sep-04 Mar-05 Sep-05 Mar-06 Sep-06 Mar-07 Sep-07
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NSW arrears remain well above group average
0.35%
0.30% 90 DPD % GLA
0.25%
0.20%
0.15%
0.10%
0.05% NSW Total Retail
0.00%
Sep-04 Mar-05 Sep-05 Mar-06 Sep-06 Mar-07 Sep-07
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Credit Cards

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Credit Card loss rates increasing with flow
through of low rate growth
Index Loss rates by vintage
(year 1 = 100)
600
500
400 Loyalty
300
Proprietary
200
Low Rate
100
0
YR1 YR2 YR3 YR4+
Portfolio by Vintage
September 2006 September 2007
YR 1 YR 1
YR 2
14% 10%
YR 2 12%
15%
63% 66% 12% YR 3
8%
YR 4+ YR 3 YR 4+
Cards and Personal loans arrears in good shape
1.8%
1.5%
1.2%
0.9%
0.6%
0.3%
0.0%
Sep-03 Sep-04 Sep-05 Sep-06 Sep-07
Credit cards (> 60 Days) Personal Loans (>60 days)
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Institutional portfolio remains sound

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Group – Gross Lending Assets
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$272bn $285bn * $307bn
AAA to 10.4% 10.2% 11.2%
BBB
59.2% 57.2% 56.5%
BBB-
BB+ to
16.0% 16.5% 16.4%
BB
BB- 12.6% 14.1% 14.0%
>BB- 1.8% 2.0% 1.9%
Sep-06 Mar-06 Sep-07
B+ to CCC
Impaired 1.6% 1.8% 1.7%
0.2% 0.2% 0.2%
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Risk grade migrations# Institutional Banking & Financial Institutions Risk Grade Migration Summary by Customer Groups (FY07)

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Upgrade
Downgrade
19
15 16
12
2
3
10 11 10 9
Finance Manufacturing Mining Real Estate Utilities
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Institutional – Gross Lending Assets

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$74bn $76bn $85bn
AAA to
BBB 34.7% 34.6% 37.2%
BBB- 22.7% 22.5% 21.2%
BB+ to
BB 24.9% 24.3% 23.7%
BB- 15.4% 15.9% 15.5%
>BB- 2.3% 2.7% 2.4%
Sep-06 Mar-06 Sep-07
B+ to CCC 1.8% 2.2% 2.0%
Impaired 0.5% 0.5% 0.4%
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*Excludes Kingfisher securitisation of 1.1bn (Sep-06), 1.0bn (Mar-07) and 0.8bn (Sep-07)

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Corporate Risk Grade Migration
Summary by Customer Groups
(FY07) Upgrade
Downgrade
33
26 23
19 19
11
20
29
34
42
Manufacturing Real Estate Wholesale Business Construction
Trade Services
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# Between rating bands excluding modifier variances

Industry exposures – Australia & New Zealand

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Finance Transport & Storage Utilities
25bn 10.0% 25bn 10.0% 25bn 10.0%
20bn 8.0% 20bn 8.0% 20bn 8.0%
15bn 6.0% 15bn 6.0% 15bn 6.0%
10bn 4.0% 10bn 4.0% 10bn 4.0%
5bn 2.0% 5bn 2.0% 5bn 2.0%
0bn 0.0% 0bn 0.0% 0bn 0.0%
Sep-04 Sep-05 Sep-06 Sep-07 Sep-04 Sep-05 Sep-06 Sep-07 Sep-04 Sep-05 Sep-06 Sep-07
Accommodation, Construction Health & Community
25bn Clubs, Pubs etc. 10.0% 25bn 10.0% 25bn Services 10.0%
20bn 8.0% 20bn 8.0% 20bn 8.0%
15bn 6.0% 15bn 6.0% 15bn 6.0%
10bn 4.0% 10bn 4.0% 10bn 4.0%
5bn 2.0% 5bn 2.0% 5bn 2.0%
0bn 0.0% 0bn 0.0% 0bn 0.0%
Sep-04 Sep-05 Sep-06 Sep-07 Sep-04 Sep-05 Sep-06 Sep-07 Sep-04 Sep-05 Sep-06 Sep-07
Real Estate Operators & Dev. Retail Trade Agriculture
25bn 10.0% 25bn 10.0% 25bn 10.0%
20bn 8.0% 20bn 8.0% 20bn 8.0%
15bn 6.0%
15bn 6.0% 15bn 6.0%
10bn 4.0%
10bn 4.0% 10bn 4.0%
5bn 2.0%
5bn 2.0% 5bn 2.0%
0bn 0.0%
0bn 0.0% 0bn 0.0% Sep-04 Sep-05 Sep-06 Sep-07
Sep-04 Sep-05 Sep-06 Sep-07 Sep-04 Sep-05 Sep-06 Sep-07
Gross Lending Assets (AUD) % of Portfolio (RHS) % in High Risk (RHS) x % in Non Performing (RHS)
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Industry exposures – Australia & New Zealand

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Personal & Other Communication Government Administration
Services Services & Defence
25bn 10.0% 25bn 10.0% 25bn 10.0%
20bn 8.0% 20bn 8.0% 20bn 8.0%
15bn 6.0% 15bn 6.0% 15bn 6.0%
10bn 4.0% 10bn 4.0% 10bn 4.0%
5bn 2.0% 5bn 2.0% 5bn 2.0%
0bn 0.0% 0bn 0.0% 0bn 0.0%
Sep-04 Sep-05 Sep-06 Sep-07 Sep-04 Sep-05 Sep-06 Sep-07 Sep-04 Sep-05 Sep-06 Sep-07
Cultural & Recreational Forestry & Fishing Mining
25bn Services 10.0% 25bn 10.0%
25bn 10.0%
20bn 8.0% 20bn 8.0%
20bn 8.0%
15bn 6.0%
15bn 6.0% 15bn 6.0%
10bn 4.0%
10bn 4.0% 10bn 4.0%
5bn 2.0%
5bn 2.0% 5bn 2.0%
0bn 0.0%
0bn 0.0% 0bn 0.0% Sep-04 Sep-05 Sep-06 Sep-07
Sep-04 Sep-05 Sep-06 Sep-07 Sep-04 Sep-05 Sep-06 Sep-07
Manufacturing Wholesale Trade Business Services
25bn 10.0% 25bn 10.0% 25bn 10.0%
20bn 8.0% 20bn 8.0% 20bn 8.0%
15bn 6.0% 15bn 6.0% 15bn 6.0%
10bn 4.0% 10bn 4.0% 10bn 4.0%
5bn 2.0% 5bn 2.0% 5bn 2.0%
0bn 0.0% 0bn 0.0% 0bn 0.0%
Sep-04 Sep-05 Sep-06 Sep-07 Sep-04 Sep-05 Sep-06 Sep-07 Sep-04 Sep-05 Sep-06 Sep-07
Gross Lending Assets (AUD) % of Portfolio (RHS) % in High Risk (RHS) x % in Non Performing (RHS)
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Corporate Responsibility

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The leading bank globally on the Dow Jones Sustainability Index

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Leading and Leading and Inspiring our Inspiring our People People

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ANZ’s six year focus on cultural transformation and employee engagement has created a strategic competitive advantage that is difficult for others to replicate.
Our Employee engagement increased from 60 to 64% in 2007 and is solidly above the financial services industry benchmark.
Our Occupational Health and Safety strategy delivered a further 20% reduction in our Lost time Injury Frequency Rate.

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Putting our Putting our Customers Customers First First

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ANZ is delivering to customers simple, convenient and responsible products and services. This year we maintained the highest retail customer satisfaction of the four major banks at 77.7%
We achieved our target to open 80 new branches between 2004-2007 and announced significant new commitments to build our position as Australia’s Most Convenient Bank.
We introduced new responsible lending measures and implemented the Equator Principles in our Institutional business

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Earning Earning Community Community Trust Trust

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ANZ has made a long-term commitment to improving financial literacy and inclusion, particularly amongst the most vulnerable groups in society. We also encourage our people to support the causes that are important to them resulting in hundreds of community charities receiving a total of $2.5 million in donations.
This year we released corporate Australia’s first Reconciliation Action Plan committing us to the most significant Indigenous employment targets of any major Australian company.
We also completed a successful pilot of a loans program for low-income earners and contributed more than 73,000 hours of volunteering time. Our total community investment for 2007 was more than $17million.

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Managing Managing our our Environmental Environmental Footprint Footprint

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ANZ is working to reduce its direct and indirect impact on the environment.
This year we began construction of our new environmentally-friendly flagship building at Dockland and announced plans to become Carbon Neutral in Australia and New Zealand by the end of 2009.
We met or exceeded our two-year targets to reduce paper, carbon emissions and waste by 5%. We reduced our electricity consumption by 4.7%.

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People strategy sees ANZ employee engagement solidly above the Australian financial services benchmark

Cultural Transformation

ANZ has had a six-year focus on cultural transformation and valuesbased decision making
Employee Engagement has risen from 60% (2006) to 64% (2007)
Culture survey results show strong focus on customers, community and shareholders and limiting aspects of our culture have diminished even further again this year
More than 30,000 employees have attended a Breakout workshop since Breakout began in 2000 (including >4000 during 2006/07)
Breakout Festival (five-month culture initiative) and Breakout Live big event (1000+ people) held

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Aust. Fin. Services average (58%) ANZ Group 2006 (60%)
40% 60%
Average TSR ANZ Group 2007 (64%)
Average TSR = 5.6%= 3%
25% below Hewitt
SeriousZoneSeriousZone averageIndifferent Indifferent ZoneZone High High Best Employers 2006-07 (79%)
Average TSR = 18%below averageAverage TSR = – 9.6% Performance/Performance/Hewitt Hewitt
BestBestEmployerEmployer
DestructiveDestructive ZoneZone
ZoneZone Average TSR =
0% 24% above average Average TSR = 20.2% 100%
Hewitt Associates 2007
Flexibility for a Diverse WorkforceDiverse & flexible workforce
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The percentage of females in executive positions has increased from 20% globally in September 2006 to 22% at the end of September 2007
ANZ recognised as an EOWA Employer of Choice for Women for the sixth consecutive year
ANZ launched 2007-2010 Disability Action Plan in September 07
“My Flexibility” strategy implemented to deliver greater access to flexible working arrangements for all employees across ANZ
For 2008 graduate intake ANZ has exceeded its diversity targets
52% are women

Employee Wellbeing

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• ANZ’s has achieved a 20 %
reduction in the Australia’s Lost
Time Injury Frequency Rate 5
(LTIFR) from last year. Down 4.5
from 3.8 in September 2006 to
3.0 in September 2007. A 4
3.4
further 20% reduction is 3.5 3.0
targeted for 07/08.
3
• In New Zealand, as a result of
2.5
ongoing data cleansing, the
LTIFR for 05/06 has changed 2
from 1.5 to 3.6. The LTIFR for 1.5
06/07 is 1.6 resulting in a 56%
1
reduction in LTIFR for 06/07.
The New Zealand LTIFR is 0.5
calculated using only LTI’s that
0
become a claim. 04 05 06 07
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Attracting and Nurturing Talent

ANZ has the most successful and innovative strategies to attract and retain the best talent in response to changing demographics and values:
- •12 weeks paid parental leave
- •Guaranteed part-time work for over 55’s
- •Free Health Checks
- •Employee Share Save Scheme
- •Childcare
ANZ announced details of new learning and innovation facility “The Breakout Centre”
66 graduates speak Asian languages fluently

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TSR: Total Shareholder Returns

Community investment strategy is leading practice and delivering results for our stakeholders

MoneyMinded

Comprehensive adult financial education program, delivered by community partners and financial counsellors Australia-wide
22,458 people participated this year, with 1040 facilitators trained
RMIT University research shows MoneyMinded helps participants increase their confidence in dealing with financial issues, creditors and banks
We have made our MoneyMinded adult financial literacy program widely available by launching the full set of training modules online. Online courses for were completed by over 1000 people

Saver Plus

Assisting low-income individuals and families to develop a long-term savings habit, improve their financial knowledge and save for their own or their child’s education
Saver Plus is delivered in partnership with community organisations and the Victorian government
ANZ matches the savings of participants dollar-for-dollar up to $1,000 per person. Over 1300 people have commenced participation this year
Independent research shows 75% of participants in the pilot program are saving the same amount or more 1-2 years after completing Saver Plus

MoneyBusiness

Delivered in partnership with the Australian Government, MoneyBusiness aims to build the money skills and confidence of Indigenous Australians
MoneyBusiness is being piloted in 6 remote sites in NT and WA
Local Indigenous workers are providing Indigenous individuals and families with coaching in financial literacy, budgeting, bill paying, and savings
A pilot of the matched-savings program Saver Plus has commenced in 3 MoneyBusiness locations

Progress Loans

Loans program developed in partnership with the Brotherhood of St Laurence to provide access to fair, safe and affordable loans for lowincome earmers
Progress Loans are loans of between $500 and $3,000 for people on low incomes to fund household and other items
165 loans totalling $288,260 were approved in 2007 with a 67% approval rate, with the majority of loans provided to women.
No loans were in arrears, and loan repayment performance was substantially better than the mainstream rate

Reconciliation Action Plan

Employee Community Engagement

After an annual survey, our workplace giving program has been extended to 25 community organisations selected to reflect the causes that are important to our staff
15% of Australian staff are currently participating in this program
- ANZ released corporate Australia’s first Reconciliation Action Plan.
- The Action Plan aims to assist Indigenous inclusion through employment, financial literacy, cultural recognition and awareness, and capacity building. It includes the most significant Indigenous employment targets of any major Australian company.
- The plan was developed with guidance from Reconciliation Australia.
Their contributions matched by ANZ, total $716,363 this year.
One day’s paid volunteer leave for staff, including increasing opportunities for skilled volunteering and secondments
In 2007, 30% of Australian staff contributed over 56,000
volunteer hours. Time contributed across the group to community organisations valued at more than $3 million
ANZ Reports the inputs and outcomes of its community investment under the London Benchmarking Group (LBG) Guidelines
In 2007, ANZ’s financial literacy and inclusion partnerships were recognised through two Prime Minister’s Business Community Partnership Awards

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ANZ is integrating social and environmental considerations into our business ractices p

Operational Environmental Footprint Operational

Environmental Footprint
• ANZ announced plans for its operations to be Carbon Neutral in Australia and New Zealand by the end of 2009.
We commenced construction on our new environmentally-friendly flagship building in Docklands, Melbourne.
We met or exceeded our two-year targets to reduce paper, carbon emissions and waste by 5%. We reduced electricity consumption by 4.7%.* We did not meet our water reduction target.
We conducted internal and external consultation as part of a review of our Environment Charter An enhanced Charter, including specific environmental targets, will be released in 2008.
In the past 12 months 142 suppliers have committed to developing and implementing strategies designed to meet ANZ’s sustainable procurement requirements. Over 90% of ANZ tenders in the past year have included our sustainability criteria.

Institutional & Corporate Sustainability

ANZ adopted the Equator Principles in December 2006. Training has been provided to 50% of our Project Finance staff in Melbourne, Sydney, Hong Kong and Singapore.
We developed and conducted extensive consultation on our draft Forests Policy, the first in a series of sector specific policies designed to provide greater consistency in the integration of social and environmental factors into our lending and business decisions. ANZ Institutional Division is engaged in a final round of stakeholder discussions prior to presenting the policy for senior executive consideration before the end of 2007.
ANZ Institutional’s partnership with WWF delivered an ‘eco-efficiency’ program providing ANZ staff with comprehensive information and resources on environmental issues and opportunities

New Products and Services

ANZ is an active player in carbon markets – in Australia and internationally. We have developed an understanding of the various offset schemes and accreditation systems so we can help our clients choose credible and effective schemes that best suit their circumstances.
ANZ launched the second ANZ Sustainable Protected Responsible Investment over Term (ASPRIT 2). ASPRIT 2 provides an opportunity for wholesale investors to benefit from the performance of companies that lead in sustainable business practices, reflecting the emerging belief that socially responsible companies will provide greater shareholder returns over the long term.
ANZ Infrastructure Services has established two special purpose investment trusts to encourage investment in environmentally sustainable energy sources and infrastructure.
Data currently being verified

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Summary of forecasts – Australia (bank year)

	2006	2007	2008	2009
GDP	2.8	3.6	4.0	4.2
Inflation	3.4	2.5	3.1	2.9
Unemployment	4.7	4.3	4.1	4.0
Cash rate	6.00	6.50	6.75	6.75
10 year bonds	5.5	5.9	6.5	6.9
A$/US$	0.75	0.85	0.83	0.75
Credit	14.7	13.0	13.7	12.4
- Housing	14.7	12.2	11.1	10.9
- Business	15.8	18.0	10.7	9.9
- Other	11.0	13.1	7.8	7.9

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Sources: ANZ Economics.

Summary of forecasts – New Zealand (bank year)

September Years	2006	2007	2008	2009	2010
GDP	1.7	2.7	1.7	2.4	3.5
Inflation	3.5	2.1	2.7	2.6	2.5
Unemployment(Sept qtr, s.a.)	3.8	3.7	4.1	4.3	4.4
Current Account(% GDP)	-9.2	-8.2	-6.8	-6.8	-6.5
90 day bank bill(Sept mth)	7.6	8.8	8.0	7.0	7.0
10 year bond rate(Sept mth)	5.8	6.2	6.5	6.7	6.4
NZD/USD(Sept month)	0.65	0.72	0.70	0.61	0.59
NZD/AUD(Sept month)	0.87	0.85	0.76	0.77	0.82
AUD/NZD(Sept month)	1.16	1.18	1.31	1.30	1.22
Credit Growth (PSC)	13.2	14.1	9.2	9.1	9.8
- Housing	14.1	13.7	9.5	9.3	10.3
- Business	14.7	14.6	9.1	9.1	9.4
- Personal	4.3	5.6	5.5	7.3	8.0

Interest rates and exchange rates are for September month end

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Sources: ANZ National Bank; Statistics NZ; Reuters.

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

Stephen Higgins Head of Investor Relations

ph: (613) 9273 4185 fax: (613) 9273 4091 e-mail: [email protected]

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AI assistant

Australia and New Zealand Banking Group Ltd. — Annual Report 2007

10425_rns_2007-10-24_836da93e-d428-4c8c-bc71-d5f96093a31d.pdf

Result Overview

Sep 07 v Sep 06

Early observations on the business

A strong foundation for growth

Create a stronger vision for ANZ’s future

1. Unlock the existing opportunities

A record profit

Why the strong underlying performance didn’t flow through to high EPS growth

Provision drag partly an unwind of unusually high benefit we flagged last year

What we said last year…

Digging a little deeper in to where we performed (or not)

Strong balance sheet growth, particularly last two months

Net interest margins – a few moving parts

Competition biggest driver of Competition in Australia the key margin decline driver

Strategy delivering on revenue growth, without reliance on buo ant e uit markets & des ite mixed Institutional y q y p

A quick note on Markets income

We’ll continue to invest while managing the jaws

Individual Provisions increased in line with expectations

Portfolio growth driving Collective Provision

DRP underwrite – enhances strategic flexibility at low cost

Key Features

ACE Ratio

Basel II impacts – reduction in RWA expected in 2008, but how much benefit offset by capital changes?

Well positioned with liquidity and funding

Funding

Liquidity

But still likely to be some headwinds in 2008, mostly for sector rather than ANZ specific

Currency exposures

Key Takeaways

Very good underlying growth, but Cash EPS softer

Very strong revenue growth, still investing in the business

Very high revenue and PBP growth, but bottom line less than expected

Strong headline growth, assisted by sale of Fleet Partners

Divisional and Geographic Performance

RWA growth and significant investment spend offsets strong FY07 ACE generation

ACE Ratio within target range

Hedging the Kiwi dollar

F07 hedges

Divisional performance

ANZ League tables – Profit Before Provisions growth

Personal: a strong focus on customers…

A leader in customer satisfaction

… reflected in growing market share

Number 2 in customer numbers

Banking Products: growing above system

FUM growth across all products…

(FUM growth+$5.3b)

Mortgages: strong volume growth; results impacted by basis risk

Consumer Finance: continuing to deliver

Solid FUM growth for cards and personal loans

No material adverse trends in arrears rates

Increasing ATMs, increasing convenience ATM numbers

Regional, Rural and Small Business Banking: delivering a solid erformance p

Rapid business expansion continues

Esanda: Improved performance, stable portfolio

Recovery in New Vehicle Sales*

($b)

Pacific performing well

Investment & Insurance Products

Pacific

Institutional: a mixed result

Specialist product businesses continue to lead performance

Performance by region

Investing in staff remains a priority to drive future growth (FY 07 % growth)

Key regional impacts

The underlying franchise is in a good position…

New branding reaffirms capabilities and offerings

Institutional No. 1 Relationship bank status maintained

Large Corporate & Institutional Relationship Banking survey^

Transaction Banking survey^

After 3 flat periods, strong turnaround in Corporate Banking’s contribution to group (Income contribution $m) #

Relationship Market Penetration (%)

Specialist businesses: good underlying performance

Markets

*** Corporate Finance Good underlying performance**

Working Capital

Relationship Lending

Australia and New Zealand Banking Group Ltd. Annual Report 2007

* Corporate Finance Good underlying performance

**Strong FUM growth…* … delivering strong revenue and profit growth ($m)**