Meeting the New Economy Head on Elmer Funke Kupper Australia and New Zealand Banking Group Ltd Wednesday, 30 August 2000

One of the ‘Big Four’ Australian banks: Provider of full range of financial services Leadership in Corporate Banking, Credit Cards and Trade Finance Emerging strong eCommerce position Offshore network in Asia and Pacific (following sale of ANZ Grindlays to Standard Chartered) AssetsA$167b Market CapA$20b Credit RatingAA-/Aa3 Profit (first half 00)A$817m ANZ Headquarters 100 Queen Street, Melbourne ANZ

Significant momentum in financial performance EPS ROE Lending Mix Cost Income Ratio % WBC CBA ANZ NAB % Emerging Markets Mortgages ¢ %

Group strategic direction built on specialisation, eTransformation and growth Proposition 1 Integrated financial services firms will lose to specialists over time 2 The rise of specialists and new technologies will deliver superior customer value and erode margins 3 For ANZ more value will be created through focus and leverage of intangible assets than traditional concentration plays Strategy 1 Reconceive and develop ANZ as a portfolio of specialist businesses 2 Become an “eBank with a human face” 3 Create a portfolio of high growth businesses which leverage capabilities and brands

Technology transforms what customers expect Cost of a 3-minute telephone call from New York to London 1996, $ Time required to find a high rate certificate of deposit Telephone www www with agent 25 min 10 min 1 min

A disaggregated approach is required House Purchase Product Manufacturing Sales & Marketing Credit Card Wealth Mgmt Cash Deposit Yodlee Quicken EDS IBM Distribution Channels & Processing Customer Need Fidelity Schwab Countrywide AHL MBNA NextCard Egg ING

Personal Corporate International/ eCommerce Leader (#1) CompetitiveWeaker Cards Corporate Structured Finance Foreign Exchange Asset Finance B2B eCommerce B2C eCommerce Wealth Management Mortgages General Banking Small Business Capital Markets Institutional Transaction Services Pacific Asia Funds Management Increase focus on specialist positions

Group strategic direction built on specialisation, eTransformation and growth Proposition 1 Integrated financial services firms will lose to specialists over time 2 The rise of specialists and new technologies will offer superior customer value and will erode margins 3 For ANZ more value will be created through focus and leverage of intangible assets than traditional concentration plays Strategy 1 Reconceive and develop ANZ as a portfolio of specialist businesses 2 Become an “eBank with a human face” 3 Create a portfolio of high growth business which leverage capabilities and brands

0 1 2 Traditional Retail Bank Internet Bank Internet Bank (at scale) CustomersSalesBranchesStaff Ratio Schwab to ANZ Retail We have no choice but to transform our economics Operating Costs %FUM

Technology vision Better Service Lower Costs Automated, seamless Straight-through Processing Single IP Network Customer Management Web enabled ChannelsStandard PlatformsCustomers

Straight through processing Personal Banking Loan Origination System Application Servers Backend Mortgage Managers Intranet ANZ Branch Network Customers Back-office Operations Web Servers ANZ’s Core A/C Processing System Credit Bureau MIS packaged solution IBM M/frame First implementation for Mortgage products scheduled 2000 Internet Service Provider Internet packaged solution Middleware ANZ Network

Proposition 1 Integrated financial services firms will lose to specialists over time 2 The rise of specialists and new technologies will offer superior customer value and will erode margins 3 For ANZ more value will be created through focus and leverage of intangible assets than traditional concentration plays Strategy 1 Reconceive and develop ANZ as a portfolio of specialist businesses 2 Become an “eBank with a human face” 3 Create a portfolio of high growth business which leverage capabilities and brands Group strategic direction built on specialisation, eTransformation and growth

The Web is at the heart of our growth and future Directors on line Sales & Service Platform ERP AST Real Time Loan Approvals B2C B2B Internal VIPS

anz.com is now leading the way in B2C 0 50, , , , , ,000 Oct-99Feb-00Jun-00 Australia New Zealand Internet Banking Signups ANZWBCNABSt GCBA Internet Banking Users % of Total Relationships Number of Products Index: 100 = average retail customer Lending Balance Deposit Balance ProfitAttrition Internet Banking Customers Online Applications - Credit Cards

myanz.com is the latest new offer

Two views of financial services in B2B Business in Own Right - Model 1 Facilitation of Other Businesses - Model 2 Direct Delivery Buyer Business Customer E-Products Supplier Financial Institution Business Customer Direct Product Delivery Trading Enablement Financial Institution

Existing online services ANZ OnLine Domestic, global payments Global reporting Trade FX Online 1999 Real-time pricing, deal execution reporting Spot, forward Esanda Auto Finance Assessment & approval of car finance 20,000 base stations, 80,000+ users 5M payments per month 75%+ business customer penetration $2.5bn turnover 250 users Largest auto finance provider Over 300 dealers connected Established support infrastructure provides: High volume capacity High reliability time critical processing

B2B example: eGate Key Features Multi-payment, multi-channel, multi-currency Secure gateway Covers B2B, B2C, C2C, e-procurement, e-tailing  Supports traditional payment channels

B2B example: eProcurement Key Features Transparent internet marketplace for both buyer and supplier Full range items including maintenance and repair supplies, stationery, computing equipment Click and go approach, pay for as you go  Integration with financial services  Currently in beta test  Leveraging corProcure alliance of 14 leading Australian companies Buyer Internet Clearing Merchant Issuing Other Supplier Internet MRO Buyer Workflow Author- isation Catalogues Punchout Messaging MRO Marketplace Supplier Interfaces ANZ eGate Card On Account Other

Taiwan Mass affluent market is emerging Thailand MalaysiaSingapore China 3 Korea Indonesia Philippines Japan Hong Kong

Dramatically reduce the cost of customer acquisition away from -Advertising only -High deposit rates Improve monetisation -Deposit and asset products -Non banking products Create loyalty The Challenges The challenges have little to do with banking Headline Net Interest Margin Egg Launched Halifax Lloyds/TSB Supermarkets Egg %NIM UK Interest Margins Regulatory hurdles

OCBC – ANZ Joint Venture Regional e-based financial institution + Internet Service Provider B2B and B2C Enabling Online Stockbroking Retail Alliances Leading Financial Portal Banking front end

ANZ in 3-5 years Leading positions in a number of specialist businesses in Australia, New Zealand and Asia Portfolio of businesses likely to be narrower and more focused A performance orientated driver of individual businesses Portfolio actively re-shaped by the corporate centre Multiple strategic alliances A range of growth businesses and options A leader in eCommerce Higher market to book ratio

Copies of ANZ strategy presentations available on

Contribution balanced between personal and corporate, and product and customer International Personal Corporate Other Cards Wealth Mgmt Mortgages Funds Mgmt General Banking Small Business Corporate Foreign Exchange Asset Finance Capital Markets Institutional Structured Finance Transaction Services Asia Pacific % % * Excluding Grindlays 738m* 37m* 368m 311m International Customer Businesses Shaded

The material in this presentation is general background information about the Bank’s activities current at the date of the presentation. It is information given in summary form and does not purport to be complete. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. These should be considered, with or without professional advice when deciding if an investment is appropriate. For further information visit or contact Philip Gentry Head of Investor Relations ph: (613) fax: (613)