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

Nov 13, 2007

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Morgan Stanley Investor Conference Australia and New Zealand Banking Group Limited

November 2007

Peter Marriott Chief Financial Officer

ANZ - major bank in Australia and New Zealand, ex andin ra idl into Asia p g p y

• Established 1835

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• Represented in 31 countries

• Market capitalisation ~ $53b

• Largest Australian bank in Asia

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+
China
Laos
Vietnam
Philippines
Cambodia
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• Assets of ~ $392b

• FY07 profit $4.18b (Cash profit $3.92b)

• Cost to income ratio 44.8%

• 1327 branches / representation offices

• Over 34,000 employees (FTE) worldwide

• Highest staff engagement of Australian companies

Our 2007 Annual Result

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% (10.1%) 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

Most businesses delivered excellent results…

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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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….but bottom line was below peers

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Includes PBP for:
Reflects buoyant Personal – 17%
equity markets INGA – 28%
1.2% 3.1% NZ Businesses – 13%
Major focus for
1.2%
management, improved
performance expected
3.6%
12.1%
1.1%
8.1%
Provision charge
normalising from
unsustainably low
2006 charge
relative to peers elsewhere
management
Provisioning growth
Outperformance
Underweight wealth
businesses
Discontinued relative to peers
Insto performance
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Personal – continues to rovide su erior erformance p p p

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A leader in customer satisfaction And a track record of strong
(Main Financial Institution: 6 months rolling [] ) financial performance
%
80
NPAT benefiting 22%
from lower
provisioning charge
75
17% 17%
16% 16%
15%
15%
14%
70
65
60
55
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Institutional – a good franchise, needing to lift financial erformance p

Institutional No. 1 Relationship bank status maintained

Large Corporate & Institutional Relationship Banking survey^

No.1 in 11 categories including:

• Most Trusted Adviser

• Knows Company's Industry Best

• Understands Offshore Banking[*]

Transaction Banking survey^

• No.1* in 9 categories including:

• Transaction banking relationship strength[*]

• Overall customer service

• Trade Services lead relationship

Relationship Market Penetration (%)

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72 70
67 68
65 64 64
60 54 54 52 50
47
45 44 44
37 37 35 37
18 18
13 13
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Institutional lending growth (Institutional Net Lending Assets)

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Conduit
funding –
15.8%
now in
decline
12.7%
$b
82 Additional
$16b in RWA
since Mar-07
78
74
70
66
62
58
54
50
46
42
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New Zealand – very strong market position

Continuing to generate revenue at almost twice that of major peers * (Share of Revenue )

Mortgage market share now growing (Mortgages market share)**

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40%
30%
20%
10%
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0% Dec-04 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07

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30%
25%
20%
15%
10%
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5%

Asia – key growth business over 3-5 year time horizon

New Asia Pacific Structure

Unrealised gains on Asian partnerships

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partnerships
Personal Asia Pacific Institutional
Division Division Division A$m
4,000 Chinese
Institutional -
Retail - Asia banks now
Asia
trading up to
3,500
~30x-50x PE
South & South North East
Pacific 3,000 ?
East Asia Asia
Indonesia, China, American
India, Vietnam, Hong Kong, Samoa, Cook 2,500
Singapore, Taiwan, Islands, Fiji,
Cambodia, Laos, South Korea, Guam, Kiribati,
2,000
Malaysia, Japan New Caledonia,
Thailand, the Papua New
Philippines Guinea, Samoa,
1,500
Solomon
Islands, Timor
Leste, Tonga
1,000
and Vanuatu.
500
0
for ANZ shareholders
Significant value created
Cash Invested Potential Value
Gain on non-listed
Gain on other partnerships
Chinese partnerships
Gain on listed partnerships
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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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Acquisitions and
Includes 7% disposals impacting
FTE growth expense growth
83 4,932 29 28 (25) 4,953
(11)
244
4,605
7.1%
7.6%
FX impact ETrade
Fleet Partners
Other Operating Stadium Australia
Personnel
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10.2%
9.7%
8.4%
7.6%
7.1%
6.1%
Jaws
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Individual Provisions increased in line with ex ectations p

Consumer IPs trending up with volume growth

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$m
400
360
349
350
300
255
250 229
197
200 182
150
100
50
0
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“New & Increased” commercial IP’s
higher as expected…
$m
500
424
400 347
285 290
300 255
200
100
0
FY03 FY04 FY05 FY06 FY07
With more normalised levels of
commercial writebacks and recoveries
$m Unusually large
200 179 recovery not
165
160 repeated
150 105
100
100 80
60
50
0
1H07 2H07
FY03 FY05 FY07
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Well ositioned with li uidit and fundin p q y g

Funding

ANZ has progressively reduced reliance on short term wholesale funding

• Limited impact on ability to access short 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

• Strong Institutional deposit inflows ($14.8b, ~27% pa growth)

Stable and diversified funding base (Group funding profile September 2007 )

Short term 26% total wholesale debt short 14% term Commercial funding Bills 4% Term - resid. mat <12 mths 8%

Liquidity

Personal ~ 36% Institutional ~ 40% New Zealand ~ 20% Other ~ 4%

• Strong Liquidity Portfolio ~$22b

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• Sufficient cover against maturing short dated wholesale debt and increased asset growth

Term - resid.

Group

Basel II impacts – reduction in RWA expected in 2008, but how much benefit offset b ca ital chan es? y p g

CAPITAL Capital = Ratio

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

DRP underwrite – reinstates capital ratios for recent ac uisitions and enhances flexibilit at low cost q y

The rationale

• $1.5b investments in past 12 months funded internally

ACE Ratio

+

• Stronger than expected growth in RWA towards end of year (~$8b above expectations in past 6 months)

+

• Lower expected benefits from Basel II

+

• Enhances strategic flexibility

• Ability to make modest infill acquisitions if opportunities arise (eg E*TRADE & Saigon Securities Incorporation)

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Preferred
operating range
%
5.00
4.81 (0.52)
0.35 4.64
4.75
4.50
4.29
4.25
4.00
3.75 ACE
target
3.50
3.25
3.00
2007 2007
Pro
pre-acquisitions Actual forma
Net acquisitions
DRP Underwrite
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• Ability to take advantage of

Summary

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Digging a little deeper in to where we performed (or not)
Wealth / AsiaPartnershipsInstitutional Growth/BusinessPBPRetail45%15%6%Wealth / AsiaPartnershipsInstitutional 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% InstitutionalCorp & Comm New Zealand37%27%4% -13% Institutional Corp & Comm New Zealand7%20%13%13%-13%7%20%13%13<1%14%4%4%Asia/Pac % 21017%15%26% <1% 14% 4% 4%Asia/Pac3%1%3% % 210%Other17%-15%26%27%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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Personal – continues to provide superior performance
85807570656055 (Main performanceInstiNew Zealand –As South & South Cambodia, Laos, Aug-India, Vietnam, A leader in customer satisfaction %00PersoThailand, the I Relationshi • •••DivisionEast AsiaSingapore, Philippines Indonesia, nsti Malaysia, Lar Lead customers Transaction bankin ia – Overall customer service No.1 in 9 categories Trade Services lead relationshiTotal cu Relationship Banking survey^Transaction Banking survey^New 377'0665 No.1 in 11 categories ••• ANZ 2 8580757065 6055 Financial Institution: 6 months rolling Aug- nal (Main Financial Institution: 6 months rollingperformancePersonal – Institutional –Ne Asbank status maintained South & South Cambodia, Laos, UnMo Knows Company's Industry Best Aug01 g India, Vietnam, tA leader in customer satisfaction tu % 70 '070037Personal Thailand, the 64 I Relationship Market Penetration • •••DivisionEast AsiaRetail - e utional – Singapore, Philippines Indonesia, derstands Offshore Bankingst Trusted Adviser nstitutional Malaysia, Corporate & Institutional ANZPeer 3- Asia Pacific Structure % S Large Corporate & Institutional tional No. 1 Relationship Lead customers Transaction bankin ia – Overall customer service No.1 Trade Services lead relationshi * No.1 of big 4 competitors ^ P Total customers Key growth busine stomers Relationship Banking survey^ Source: Roy Morgan Research – w ZTransNew Asia Pacific Structure 3772'65 No.1 in 11 categories • ••06 A Aug- eatisfied Aug-02 NZ bank status maintained ter Understands Offshore Banking Most Trusted Adviser Knows Company's Industry Best 01 p 6435 Peer 1 '066770'37Asia6407 * Retail - L Market ee Associates, 2007 in 9 categories ANZPeer 3 eala Asia Pacific (Very or FairlSource: Roy Morgan Research –% Satisfied (Very or Fairly Satisfied), 6 mth moving averag South Korea, * No.1 of big 4 competitors^ P actioKe North East Hong Kong, 6837'0760Aug-DivisionAug03Taiwan, e China, 02Japan Asia ter g 64 35 Peer 1 '67 relationshi Asia06 y -Peer 1Peer 4 L Si ee Associates, 2007 n Ban Asia Pacific nd – Aug-South Korea, g a good franchise, needing to lift financial North East Hong Kong, Institutional -1854'06 gPeer 2 6837'6047Aug-04 continues to provide superior performance P Division07 Very strong market nificant customers y Satis No. 1 Relationship including:03 Taiwan, China, e including: rowth busine Japan Asia g 455418'07 n relationshi AsiaPeer 1Peer 4Significant customers fied), 6 mth m etratio king Aug- Aust MFI Pop pAug-05 a good franchise, needing to lift financ p Institutional -1854' P 470604 Ver including: strength Guam, Kiribati,American Samoa, Cook Islands, Fiji, e Guinea, Samoa, New Caledonia, I including:Islands, Timor er 2 nstitutional and Vanuatu [] Leste, Tonga 45 1352 Peer 3 '06 survey^ Peer 2Papua New 544418'Division07AsiaSolomon Aug-PacificAug-06 n Aust MFI Pop’n aged 14+, p y 055013 oving '0744 p ’ n aged 14+, strength Guam, Kiribati, (%) American Samoa, Cook Islands, Fiji, stron Guinea, Samoa, New Caledonia, IIslands, Timor [] nstitutional and Vanuatu [] Leste, Tonga average Peer 3 5213'Peer 2Papua New 44 ss ove 06Aug-DivisionSolomon Aug-07Pacific . [] 06 ) 5013'4407 (%) [] ss ove Aug-2,0001,5001,0004,0003,5003,0002,500 g 07$b. [] 8278747066 62 5854504642A$m provisioning charge 500 )r 5 yInstitutional lending growth m NPAT benefiting e 0 Sep-0 15% (Institutional Net Lending Assets)And a track record of strong Unrealisedfrom lower arket FY041,0004,0003,5003,0002,5002,0001,500 Profit Before Provisions $b 82 7874 70 666258545046 42 A$m provisioning charge 500 p 16% financial performancer 5 year time horizonInstitutional lending grNPAT benefiting e6 ositionSep-06(Institutional Net Lending Assets) 15% And a track record of strong Unrealisedar time horizonfrom lower Mar-07 FY04 Profit Before Provisions p 14% artnershi p 16% financial performance FY05 $16b in RWA since trading up to ~30x-50x PEosition 15% Additional banks now Mar-07 Chinese gains on Asian partnerships 14% Jul-07 Mar-07 FY0515.8%12.7%17% $16b in RWA since Mar-07trading up to ~30x-50x PE 15% Additional banks now FY06 Chinese gains on Asian p Jul-07 22% Aug-07 s ? 15.8%12.7%17%FY06 NPAT 17%22% Aug-07 FY07 ?Sep-07 16% NPAT 17% owthConduits –declinenow in FY0710 89 Sep-07 1 ial 6% Conduits –declinenow in 1089
0
11
11
Well positioned with liquidity and funding
• Funding •• Liquidity ••• US Sub-Prime crisis However cost of term wholesale debt has increased materially LiFocus on customer deposits short or long term wholesale fundingmaintained:crisisSufficient cover against maturing No direct impact from the sub-prime Strong Liquidity Portfolio ~$22b increased asset growthshort dated wholesale debt and mited impact on ability to access – Growth rate in Personal deposits – Strong Institutional deposit inflows Funding ••• Liquidity •• USWell approaching ($14.8b, ~27% pa growth)20% annualised in Aug/Sep-07Limited impact on ability to access However cost of term wholesale short or long term wholesale fundingdebt has increased materially Focus on customer deposits maintained:Sufficient cover against maturing Strong Liquidity Portfolio ~$22b increased asset growthshort dated wholesale debt and Sub – Growth rate in Personal deposits – Strong Institutional deposit inflows approaching 20% annualised in Aug/Sep-07($14.8b, ~27% pa growth) pPrimeositioned with licrisis quidit New Zealand ~ 20%Other ~ 4%Personal ~ 36%Institutional ~ 40% ANZ has progressively reduced reliance 40%35%30%25%20%15%10% yStable and diversified funding baseon short term wholesale funding 2000 and fundin (Group fundinPersonal ~ 36%Institutional ~ 40%New Zealand ~ 20%Other ~ 4% ANZ has progressively reduced reliance Customer 40%35%30%25%20%1510%FundingGroup Ratio of short-dated wholesale 53%funding to net external assets Stable and diversified funding base % on short term wholesale funding 2000(Group funding profile September 2007Customer2002ANZGroup Ratio of short-dated wholesale funding to net external assets g pr 2002ofile ANZSHEwholesale debtPeer average g Short term 2004 Sept 14%Hybridswholesale debtember 2007Peer averageCommercial 1%Short term mat >12 mths2004Bills 4%Term - resid. 14%mat <12 mthsTerm - resid. 200614%8%Commercial Term - resid. Bills 4%mat <12 mthsTerm - resid. 26% total t ) funding2006short term 128%th26% total ) fundingshort term
Significant value created for ANZ shareholders
Significant value created for ANZ shareholders
Cash Invested Potential Value
Cash Invested Potential Value
Gain on other partnerships Gain on non-listed Chinese partnerships
Gain on listed partnerships Gain on other partnerships Gain on non-listed Chinese partnerships
Gain on listed partnerships
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Majority of businesses performing very well - underperformance in isolated pockets

Personal – great franchise, positive outlook

Institutional – good franchise, upside ahead New Zealand – very strong position, solid performance Asia/Pacific – performing well, expected to accelerate

Well positioned with capital, liquidity and funding

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