Page 1 What do our customers want? - their top 3 needs are CB to focus on: Wall St to Main St Cross sell products from the Personal businesses into our.

Page 1

What do our customers want? - their top 3 needs are

CB to focus on:

• Wall St to Main St

• Cross sell products from the Personal businesses into our customer base:

• Corporate portal to lower cost to serve

Corporate Banking

• ‘Balance Sheet’ on reasonable terms

• Partner & trusted advisor• Smart products / customised

solutions

Institutional Banking

• Industry Knowledge• Creative ideas and solutions• High quality service proposition

IB’s focus will be:• Leverage the success of

Industry Specialisation to our institutional customers

• Client servicing• Corporate Portal – helps

customers streamline operations

Page 2

…supported by world class customer value management systems like MARS

Management Analysis Reporting System

Relationship expense

Transaction details

Product & pricing details

Risk profile

Key Inputs Key Outputs

Customer profitability

“What if” scenarios

Product profitability

Risk based pricing

Share of overheads

Page 3

Summary

• The pre-eminent domestic corporate banking franchise

• Our cross sell focus is embedded in the sales network, driven to growing non-balance sheet product solutions for customers

• Optimising overall customer value is driving new revenue opportunities

• The business will continue to build industry specialisation

Goals• Double digit earnings

growth

• Continue growth and

diversification of

customer revenue

mix

• Maintain customer

satisfaction ratings

• Performing loans

remain at 99% of

total book

Global Capital Markets

David HorneryGlobal Head of Capital Markets

Australia and New Zealand Banking Group Limited 20 July 2001

Page 5

Leveraging capabilities for high growth segments

• What do we do?

• Financial performance

• Low risk profile

• Realising our growth opportunities

• Goals for Global Capital Markets

Page 6

Capital Markets means different things to different people

• Derivatives trading and sales, interest rate & equity

• Credit:

– Underwriting

– Trading and sales activities

– Short and long dated securities

– Government and non-government credit derivatives

• Primary Markets activities:

– Securitisation

– Syndication

– Origination

Page 7

6871

80

50

55

60

65

70

75

80

85

Mar-00 Sep-00 Mar-01

Operating Income

1618

24

0

5

10

15

20

25

30Profit After Tax

Mar-00 Sep-00 Mar-01

176

183

180

165

170

175

180

185

190

53.8

59.2

61.8

50

52

54

56

58

60

62

64

We are delivering strong performance

Mar-00 Sep-00 Mar-01 Mar-00 Sep-00 Mar-01

FTE Cost Income

50% Growth

18% Growth

$m $m

%

Page 8

Debt Securities

DerivativesPrimary Markets Group

Corporate Sales

Structured Product

…generated from a broad-based mix of products and clients...

Debt Securities

DerivativesPrimary Markets Group

Corporate Sales

1996 Portfolio 2001 Portfolio

Page 9

Credit Risk• Risk limits unchanged• The majority is MTM on

Derivatives books• Residual is typically Investment

Grade Securities Inventory• Netting and collateral

management are important initiatives

Market Risk• Risk managed under global

books• Market Risk (VaR) limits and

usage unchanged

…while adopting a low risk profile

Source: Group Market Risk

Limit US$5.2m

Avg use US$1.9m

Daily Value at Risk Trends

0

1

2

3

4

5

6

Daily

VaR

Dec 99 Mar 01

US$m

Page 10

We are a leader in Capital Markets

League Tables

• #1 Interest Rate Products in Australia 2001 (Asia Risk)

• #2 Bank Australian Equity Derivative Product (Asia Risk)

• Runner Up Debt House of the Year (INSTO)

• #1 Commercial Paper Australia (Asia Money)

• Lead & Arranger Debt Issuer of the Year (INSTO)

• Arranger & Lead Mgr Securitisation Deal of the Year (INSTO)

• #1 Lead Arranger Australian Syndicated Loans (IFR)

• #2 Lead Arranger New Zealand Syndicated Loans (IFR)

• Lead Arranger Project Deal of the Year 1999 & 2000 (INSTO)

• #1 Issuer Put Warrants, #3 Overall Equity Warrants (ASX turnover statistics)

Page 11

Our future growth lies with complex, high margin products...

Strong & sustainable market positions

• Interest Rate Derivatives

• Long-Dated Aust & NZ Credit Product

• Syndication, Securities, Origination

Commoditised, cost & volume-driven economics

• Cash, Short-Dated Securities, FRAs

• AusMarkets.com• ANZ Futures • ANZ Mees Pierson• Clearing Services

• Securitisation • Credit & Equity

Derivatives • Complex Hybrids • Advice & Structured

Solutions

High IP, complex,higher margin fee-based business

Volume & cost game

Margin & skill game

SellExit

e-enable

Page 12

…such as securitisation...

• Principal finance/structured• investment vehicles

• Corporate bonds/loans• CBO/CLO/CLN• Project finance CLO• Margin loans• Commercial loans• Insurance premium loans• Consumer loans• Future flows• Credit cards• Trade receivables• Auto loans & inventory leases• Big ticket leasing (eg aircraft)• Equipment loans/leases• CMBS/credit lease• Sub-prime mortgages• Residential mortgages

Incre

asin

g c

om

ple

xity

Track Record

• Securitisation Deal of the Year - Kingfisher 2000-1D (Insto Magazine)

• 1st Non-Credit Lease CMBS

• 1st & Only Term Trade Receivables Transaction

• 1st & Only Private Label Credit Card Transaction

• 1st Consumer Loans Transaction

• 1st & Only IPF Funding Loans

• Global 1st & Only Asset-Backed A-3 CP Program (almost 100% market share in A-2 & A-3)

Page 13

…and equity derivatives

Basic Core Competencies(people, risk, systems,

reputation)

Trading Business

Investor Services

Structured Investment

Corporate Investment & Stock Option Management

Full suite of structured/customisedHigh net worth product

Listed equity

warrants

Second

generatio

n

derivativ

es

Full pro

duct

toolbox

Leadership in

stru

cture

d

wealth pro

duct

CREA

TE

DIS

TR

IBU

TE

PROTECT

GrowthCycle

• Higher c

omplexity

• Incre

ased value

• Gre

ater f

ranch

ise le

verage

Page 14

Summary

• Our areas of strong & sustainable competitive advantage are the Australian & New Zealand Credit & Derivative product suite

• Our growth will come from:

– e-enabling, selling or exiting those businesses subject to commoditisation and scale economics

– Growing our core businesses at 10%-15% compound, consolidating our top 3 status

– A clear focus on select, high growth, high IP businesses, in which we have already built a strong pipeline

Goals• 15% +

earnings growth

• Global leadership in Australian and NZ credit & derivative products

Page 15

ANZ Corporate is a growth business

• Strongly positioned:

– 30%+ of earnings come from outside Australia

– The leading corporate bank – top ranked in the eyes of customers

– Excellent financial performance

• Platforms for growth

– Each business has strong growth potential

– Leading edge intellectual capital to drive fee income

• On track to double profit by 2004

Page 16

The material in this presentation is general background information about the Bank’s activities current at the date of the presentation. It is information given in summary

form and does not purport to be complete. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment

objectives, financial situation or needs of any particular investor. These should be considered, with or without professional advice when deciding if an investment is

appropriate.

For further information visit

www.anz.com

or contact

Philip GentryHead of Investor Relations

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

Page 17

Copy of presentation available on

www.anz.com