Australia and New Zealand Banking Group Ltd. — Investor Presentation 2007

Dec 17, 2007

Aspirations and Directions Australia and New Zealand Banking Group Limited 18 December 2007

Michael Smith, CEO

My early impressions

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Divisional level
Personal Institutional New Zealand Asia/Pacific
+ Great shape + Strong franchise + Performing well + Only Australian with
– – meaningful presence
= Share of wallet Underperforming Constrained by in Asia
opportunity peers economy
+ High potential
–
Missed opportunities
Group level –
Sights set too low
–
Systems a constraint
+ Real leadership strength
–
Issues with business mix
+ Great culture …
–
(overweight NZ, underweight wealth)
but needs more edge
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Overall impression: Call to action

Our journey to becoming a Super Regional bank

TRANSFORM

OUT PERFORM

RESTORE

• Institutional back to system

• Restore “jaws” – increase revenue faster than costs

• Drive Asia profit

• Capture existing opportunities

• Strategic cost management

• Quality on par with global leaders in our markets

• Best of breed customer experience

• In-fill mergers and acquisitions in Asia (core geographies)

• Unlock the value of our franchise

Create a leading Super Regional bank

Global quality, regional focus

1 to 2 years

2 to 5 years

5+ years

Growth based on 4 core capabilities

FROM

Product based Customer centric Marketing is for Sales/marketing Retail focused Technology a Technology constraint based Performance Meeting

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Restore • Out-perform TRANSFORM

TO

Customer/segment focused Sales/marketing core skills for everyone Technology a core source of advantage Out-performing

Institutional – back to system

FROM

Too internally focused

• Customer relationship disruption

• Reduced lending to core customers

• Insufficiently agile

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Restore • Out-perform
TRANSFORM
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TO

Customer focused

• Specialisation

• Relationship lending

• Growing deposits

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• Rebalance staff mix to front office

Under-invested in technology

Technology a critical enabler

• Cash management, Markets Risk

• Double Markets revenue

Conservative risk approach

• Accelerate Asian growth

• Increase distinctive funds capability

Personal – leading share of wallet

FROM

Strong growth in new customers Avg 7% pa over last 3 years

“Product of the month” sales focus

Bottom-up product focused direct marketing

In the pack on technology

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Restore • Out-perform TRANSFORM

TO

Maintain customer acquisition and deepen relationships , especially mortgages and wealth

Needs based selling

Top down, segment prioritised direct marketing

Clear leader in online and sales tools

NZ – growing share, sub 40% CTI

FROM

Defending share post NBNZ acquisition, and repositioning ANZ business

Incremental cost improvement - cost to income ratio 44 per cent

Duplicate retail systems

Stable performance in line with market

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Restore • Out-perform TRANSFORM

TO

Grow by customer acquisition, and targeted segments

Fully leveraging scale to drive cost to income below 40%

Single system

Sustained out performance

Asia-Pacific – as big as NZ by 2012

Restore • Out-perform TRANSFORM

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FROM

TO

Maintaining our network franchise

Deepening franchise, customer base and capabilities

Focus on Australia/New Zealandlinked Clients

Broaden focus to mass affluent retail and local corporate customers

Establish Asian platform via Partnerships

Focussed on core geographies:

• Top tier domestic bank in Malaysia, Vietnam and Indonesia

• A leading foreign bank in Greater China and potentially India

• Grow ANZ branded presence

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7 per cent of Group net profit after tax
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Big as NZ by 2012 (~20%)
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Wealth – focus on distribution

Restore • Out-perform TRANSFORM

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Margins declining,	Margins declining,	particularly in Admin
	and Product Design*
350 bp margins			Our response – focus on distribution
300	300	Advice & Sales	Margins are more sustainable at the distribution end of the value chain
		Admin	Significant growth in planner numbers. Together
250	250	Product Design Asset Management	with INGA we are now top 2 in planner numbers We plan to double profit and gain 50% more
200		150-200	customers in I&I by 2010 Supported by continued growth from INGA
150			Why we will succeed
100			We control the distribution
50			Investment and Insurance business delivered average profit growth > 50% pa last 3 years E*TRADE market share now at record 27%

Restore • Out-perform TRANSFORM

ANZ 5 years from now

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Where our profits will come from …

High Asian growth will result in more balanced geographic contribution as we seek to double our profit over 5 years

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||||||||
|---|---|---|---|---|---|---|
|ANZ|
|NZ|Asia/Pacific|Other|
|today|Australia 69% of all ANZ profit|22%|7%|2%|
|ANZ|NZ|Asia/Pacific|Other|
|2012|Australia ~60% of all ANZ profit|~20%|~20%|~2%|
|What will drive domestic growth …|What will drive Asian growth …|
|•|Personal|– great track record, opportunity to|•|Main focus on|organic growth|supplemented|
|deepen customer relationships|with in-fill mergers and acquisitions|
|•|Institutional|– getting back in the game|
|•|New Zealand|–strong position, but can further|Partnerships|
|grow share and exploit cost synergies|
|Asia Institutional|

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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: stephen.higgins@anz.com