FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Report of Foreign Private Issuer

 

Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934

 

 

For the month of August 2003

 

Australia and New Zealand Banking Group Limited

(Translation of registrant’s name into English)

 

Level 6, 100 Queen Street Melbourne Victoria Australia

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

 

Form 20-F  ý   Form 40-F  o

 

 

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

 

Yes  o   No  ý

 

 

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-

 

 



 

Signatures

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

Australia and New Zealand
Banking Group Limited

 

 

 

 

 

/S/ Garry White

 

 

 

 

(Registrant)

 

 

 

 

By:

Garry White

 

 

Assistant Company Secretary

 

 

 

 

 

Date 10 September 2003

 

 

2



 

 

 

 

 

 

Corporate Affairs

Level 22, 100 Queen Street

Melbourne Vic 3000

Facsimile 03 9273 4899

www.anz.com

 

For Release: 13 August 2003

 

New Zealand Commerce Commission submission

 

ANZ today announced that it has lodged a submission with the New Zealand Commerce Commission (NZCC) regarding its interest in the sale of the National Bank of New Zealand by Lloyds TSB.

 

The submission has been lodged as part of the sale process established by Lloyds TSB.  ANZ expects the submission will be made public by the NZCC.

 

ANZ has previously indicated it believes it is in shareholders’ interests to investigate the sale of the National Bank of New Zealand.

 

 

For media enquiries, contact:

 

Paul Edwards

Head of Group Media Relations

Tel:  03-9273 6955 or 0409-655 550

Email:  paul.edwards@anz.com

 

3



 

 

Company Secretary’s Office

Level 6, 100 Queen Street

Melbourne VIC 3000

Phone 03 9273 6141

Fax 03 9273 6142

www.anz.com

 

13 August 2003

 

 

Company Announcements Office

Australian Stock Exchange Limited

20 Bridge Street

SYDNEY NSW 2000

 

Dear Sir

 

General Meeting

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

 

As required by section 251AA(2) of the Corporations Act the following statistics are provided in respect to each motion on the agenda at the general meeting of Australia and New Zealand Banking Group Limited held at 9:00 am today.  In respect to each motion the total number of votes exercisable by all validly appointed proxies, and the results of each motion, were as follows:

 

Confirming member approval to the buy-back agreement relating to the redeemable preference shares issued by the Company in 1998

 

Votes where the proxy directed to vote ‘for’ the motion

 

619,759,581

 

Votes where the proxy was directed to vote ‘against’ the motion

 

738,431

 

Votes where the proxy may exercise a discretion how to vote

 

42,296,997

 

 

 

 

 

In addition, the number of votes where the proxy was directed to abstain from voting on the motion was

 

3,600,133

 

 

 

 

 

The result of voting on this motion was as follows:

 

 

 

 

 

 

 

The motion was carried on a show of hands as a special resolution.

 

 

 

 

 

 

 

Amendment to the Constitution

 

 

 

 

 

 

 

Votes where the proxy directed to vote ‘for’ the motion

 

614,357,318

 

Votes where the proxy was directed to vote ‘against’ the motion

 

2,098,776

 

Votes where the proxy may exercise a discretion how to vote

 

49,154,952

 

 

 

 

 

In addition, the number of votes where the proxy was directed to abstain from voting on the motion was

 

7,348,112

 

 

 

 

 

The result of voting on this motion was as follows:

 

 

 

 

 

 

 

The motion was carried on a show of hands as a special resolution.

 

 

 

 

4



 

Approval of the issue of reset convertible preference shares

 

 

 

 

 

 

 

Votes where the proxy directed to vote ‘for’ the motion

 

615,563,321

 

Votes where the proxy was directed to vote ‘against’ the motion

 

4,308,373

 

Votes where the proxy may exercise a discretion how to vote

 

49,050,872

 

 

 

 

 

In addition, the number of votes where the proxy was directed to abstain from voting on the motion was

 

4,031,920

 

 

 

 

 

The result of voting on this motion was as follows:

 

 

 

 

 

 

 

The motion was carried on a show of hands as an ordinary resolution.

 

 

 

 

 

Tim Paine

Company Secretary

 

5



 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

Searchable text section of graphics shown above

 



 

ANZ Stapled Exchangeable Preferred Securities

(ANZ StEPS)

 

August 2003

 

[LOGO]

 



 

Today’s presentation

 

1. Offer summary

 

2. ANZ - Update on operations and strategy

 

3. ANZ - Effect of the issue

 

4. Offer structure

 

5. Bookbuild process

 

6. Supplementary information

 

August 2003 ANZ StEPS Presentation

 

 

 

2



 

Offer summary

 

                  ANZ Stapled Exchangeable Preferred Securities (ANZ StEPS)

 

                  Offer of up to $750m with ability to accept oversubscriptions of up to $250m

 

                  Floating rate securities paying a distribution set at a margin over the 90 day bank bill rate

 

                  Issue credit rating

 

                  ‘A-’ by Standard & Poor’s

                  ‘A2’ by Moody’s

 

                  Qualifies as Tier 1 Capital

 

                  Part of ANZ’s ongoing capital management program

 

3



 

Today’s presentation

 

1. Offer summary

 

2. ANZ - Update on operations and strategy

 

3. ANZ - Effect of the issue

 

4. Offer structure

 

5. Bookbuild process

 

6. Supplementary information

 

4



 

Delivering sustainable profit growth

 

 

 

 

 

 

v Mar 02

 

2003 interim results

 

 

 

 

 

NPAT

 

$

1,141

m

8.7% é

 

EPS

 

72

cents

8.6% é

 

Cash EPS

 

74

cents

10.4% é

 

Interim dividend

 

44

cents

12.8% é

 

Net specific provisions

 

$

259m

 

29% ê

 

 

 

 

 

 

 

 

Before significant transactions

 

 

 

 

 

NPAT

 

$

1,141

m

7.0% é

 

EPS

 

72

cents

6.8% é

 

Cash EPS

 

74

cents

8.7% é

 

 

A track record of strong NPAT growth*

 

[CHART]

 


Excluding significant transactions

 

5



 

A diversified portfolio performing well

 

 

 

Mar 03

 

Mar 02

 

Change

 

Institutional Banking

 

145

 

119

 

22

%

Personal Banking

 

137

 

121

 

13

%

Mortgages

 

131

 

123

 

7

%

Transaction Services

 

84

 

76

 

11

%

SME

 

78

 

65

 

20

%

New Zealand

 

74

 

61

 

21

%

Asia Pacific

 

67

 

45

 

49

%

Asset Finance

 

60

 

48

 

25

%

Corporate Banking

 

55

 

55

 

0

%

Wealth Management

 

51

 

48

 

6

%

Treasury

 

49

 

63

 

-22

%

Consumer Finance

 

47

 

79

 

-41

%

Foreign Exchange

 

43

 

41

 

5

%

Corp Fin & Advisory

 

38

 

41

 

-7

%

Capital Markets

 

36

 

31

 

16

%

Structured Finance

 

36

 

40

 

-10

%

INGA JV*

 

21

 

n/a

 

n/a

 

 

1st half NPAT $M

 

[CHART]

 


*  Excludes funding costs but includes goodwill amortisation

 

6



 

On track in the second half

 

                  Consumer Finance – back on track

 

                  Corporate & SME - performing well, lending growth of 13% YTD

 

                  New Zealand – relatively flat

 

                  Mortgages – strong lending growth continues, up 17% YTD

 

                  Asset Finance – positive momentum continues

 

                  Personal Banking – good deposit growth, some margin pressure

 

                  INGA JV – performing well in a difficult market

 

                  Institutional – modest growth, continued de-risking

 

7



 

Outlook for 2004

 

                  Planning for 2004 not finalised, however most business units continue to perform well

 

                  Some external challenges in 2004

 

                  Credit card interchange

                  Unfavourable interest rate environment

                  Strong $A

                  Softening housing outlook

 

              Despite these challenges, we expect EPS growth to remain reasonable

 

8



 

Distinctive strategy and track record

Four themes going forward

 

              Leverage real capabilities to build sustainable strategic position

 

              Grow value by creating a rich portfolio of specialised businesses

 

              Become one of the most efficient and best-managed banks in the world

 

              Bold and different, leveraging a unique performance culture and business approach

 

ANZ relative TSR

 

[CHART]

 


*                 CBA, NAB, WBC

 

9



 

Today’s presentation

 

1.               Offer summary

 

2.               ANZ - Update on operations and strategy

 

3.              ANZ - Effect of the issue

 

4.               Offer structure

 

5.               Bookbuild process

 

6.               Supplementary information

 

10



 

‘AA’ category rating supported by strong capital position

 

Drivers of ACE ratio

 

[CHART]

 

Peer Comparison
ACE/RWA

 

[CHART]

 

11



 

Pro forma regulatory capital position

 

                  Issue forms part of ANZ’s ongoing capital management program and

 

                  Will strengthen ANZ’s balance sheet

                  Will increase financial flexibility

                  May be used to buy-back or redeem Series 1 and Series 2 TrUEPrS, or

                  May be used for other purposes

 

                  APRA has classified ANZ StEPS as Tier 1 Capital

 

                  ACE ratio unchanged following ANZ StEPS issue

 

12



 

Today’s presentation

 

1.               Offer summary

 

2.               ANZ - Update on operations and strategy

 

3.               ANZ - Effect of the issue

 

4.              Offer structure

 

5.               Bookbuild process

 

6.               Supplementary information

 

13



 

Offer structure - key terms

 

                  ANZ StEPS – a stapled security comprising

 

                  Interest paying note issued by ANZ (NZ)

                  Preference share issued by ANZ which does not pay dividends while ‘stapled’ to the note

 

                  Offer size

 

                  Up to $750m with the ability to accept oversubscriptions of up to $250m

 

                  Preferred non-cumulative quarterly distributions

 

                  Distribution rate = market rate (initially 4.85% p.a.) + margin p.a.

 

                  Certain terms can be changed on a reset date

 

                  First reset date = 15 September 2008

 

                  Expected to be ASX-quoted

 

14



 

Preferred non-cumulative distributions

 

                  Until the first reset date, floating rate distributions, paid quarterly

 

                  Distribution rate until reset date = 90 day bank bill rate + margin

 

                  Initial distribution rate = 4.85% p.a. + initial margin p.a.

                  Initial margin is set by bookbuild on 19-20 August

 

                  Until the first reset date, distribution rate changes quarterly with the 90 day bank bill rate

 

                  Distributions payable on 15 March, 15 June, 15 September and 15 December

 

                  First distribution payable on 15 December 2003

 

15



 

Payment tests, ‘dividend stopper’ and ranking

 

                  Distributions will not be paid if

 

                  ANZ does not comply with APRA’s guidelines

                  Total distributions are greater than distributable profits, or

                  APRA otherwise objects

 

                  If distributions are not paid, a ‘dividend stopper’ prevents ANZ from

 

                  Paying dividends, or

                  Returning capital,

on ordinary shares or any share capital ranking below ANZ StEPS

 

                  ANZ StEPS rank

 

                  In priority to ordinary shares

                  Pari passu with ANZ preference shares (including TrUEPrS)

 

16



 

Reset provisions

 

                  First reset date = 15 September 2008

 

                  Subsequent reset dates expected to be every 5 years

 

                  Terms that can be changed (subject to APRA approval) on reset dates

 

                  Next reset date

                  Market rate (from floating to fixed rate or vice versa)

                  Margin

                  Frequency and timing of distribution payment dates

 

17



 

Exchange by holder

 

                  Holders may require ANZ to exchange some or all of their ANZ StEPS on a reset date or trigger event

 

                  Key trigger events include

 

                  Non-payment of distributions (if payment tests satisfied)

                  Liquidation event

                  Acquisition event

                  ANZ StEPS or ordinary shares suspended from trading on ASX

                  Announcement of sale of substantially all of ANZ’s business

 

                  If holder requires exchange, at ANZ’s choice, holders will receive for each ANZ StEPS

 

                  Ordinary shares calculated in accordance with the conversion ratio, or

                  $100 cash (subject to APRA approval)

 

                  Conversion at 2.5% discount to the average of the 20 business day VWAPs prior to exchange

 

18



 

Exchange by ANZ

 

                  ANZ may require exchange of ANZ StEPS on

 

                  Acquisition event

                  Tax event

                  Regulatory event

                  Reset date

                  Aggregate amount on issue is less than $100m

 

                  If ANZ requires exchange, at ANZ’s choice, holders will receive for each ANZ StEPS

 

                  Ordinary shares calculated in accordance with the conversion ratio, or

                  $100 cash (subject to APRA approval)

 

                  Conversion at 2.5% discount to the average of the 20 business day VWAPs prior to exchange

 

19



 

Assignment events

 

                  If an assignment event occurs

 

                  Investors will continue to hold a preference share in ANZ, and

                  The note will be transferred to ANZ

 

                  Key assignment events include

 

                  Liquidation events

                  Non payment of distributions

                  APRA requirements

                  ANZ’s discretion

 

                  Preference share rights

 

                  Distributions paid at same rate as notes

                  Franked at the same rate as ordinary shares

                  Reset terms remain unchanged

                  Continue to be quoted on ASX

 

20



 

Today’s presentation

 

1. Offer summary

 

2. ANZ - Update on operations and strategy

 

3. ANZ - Effect of the issue

 

4. Offer structure

 

5. Bookbuild process

 

6. Supplementary information

 

21



 

Syndicate structure

 

 

 

[ANZ LOGO]

 

 

 

 

 

 

 

Joint Arrangers
& Bookrunners

 

[Deutsche Bank LOGO]

 

[UBS LOGO]

 

 

 

 

 

 

 

Joint Lead Managers

 

[ANZ Investment Bank LOGO]

 

[Deutsche Bank LOGO]

 

[UBS LOGO]

 

 

 

 

 

 

 

Co-managers

 

ABN AMRO Morgans

 

 

 

Deutsche Securities

 

 

ANZ Securities

 

 

 

Macquarie Equities

 

 

Bell Potter Securities

 

 

 

Ord Minnett

 

 

Citigroup Global Markets

 

 

 

UBS Private Clients

 

                  Institutional allocations can only be received from the Joint Lead Managers

 

22



 

Bookbuild process

 

                  An institutional and broker firm bookbuild will be conducted to determine the initial margin

 

                  Indicative bookbuild range of 100bps to 120bps over the 90 day bank bill rate

 

                  Bookbuild will close for co-managers and participating brokers

 

                  Through the Joint Arrangers only

                  At 10am on Tuesday 19 August

 

                  Bookbuild will close for institutions

 

                  Through the Joint Lead Managers

                  At 4pm on Wednesday 20 August

 

23



 

Indicative timetable

 

Announcement of offer

 

14 August

Bookbuild

 

19-20 August

Bookbuild close - co-managers

 

(10am) 19 August

Bookbuild close - institutions

 

(4pm) 20 August

Initial margin announced

 

21 August

Opening date

 

(9am) 22 August

Broker firm settlement date

 

16 September

Closing date

 

(5pm) 17 September

Institutional settlement date

 

23 September

Allotment date

 

24 September

Commence trading on a deferred settlement basis

 

25 September

Commence trading on a normal settlement basis

 

2 October

 

Dates are indicative only and may change. ANZ, ANZ (NZ) and the Joint Arrangers may extend the closing date or close the offer early without notice or withdraw the offer

 

24



 

Bookbuild contacts

 

                  ANZ Investment Bank

 

                  Joerg Koeppenkastrop                                                            +61 (2) 9226 6950

                  Angelos Giannakopoulos                                             +61 (3) 9273 1774

 

                  Deutsche Bank                                                                                                                                         

 

                  Paul Umbrazunas                                                                                         +61 (2) 9258 1306

                  Grant Bush                                                                                                                         +61 (2) 9258 2657

 

                  UBS

 

                  Guy Foster                                                                                                                          +61 (2) 9324 3603

                  Simon Maidment                                                                                           +61 (2) 9324 3948

 

25



 

Supplementary information pack

 

Australia and New Zealand Banking Group Limited

August 2003

 

[LOGO]

 

26



 

Outline

 

                  Strategy

 

                  Result review

 

                  Portfolio performance

 

                  Credit quality

 

27



 

Distinctive strategy and track record

Four clear themes going forward

 

Four core themes

 

              Leverage real capabilities to build sustainable strategic position

 

              Grow value by creating a rich portfolio of specialised businesses

 

              Become one of the most efficient and best-managed banks in the world

 

              Bold and different, leveraging a unique performance culture and business approach

 


*                 CBA, NAB, WBC

 

ANZ relative TSR

 

[CHART]

 

28



 

Leverage real capabilities to build sustainable strategic position

 

                  Leverage specialisation as a distinctive strategy

 

                  Leverage leading product capability to increase share

 

                  Leverage superior cost position

 

                  To give customers the best deal

                  To give shareholders sustainable and growing returns

 

                  Leverage ANZ’s emerging and distinctive “human face

 

                  Unique positioning against peers

                  Gain traction in earning the trust of the community

 

29



 

A rich portfolio of specialised businesses - material improvement in last 2 years

 

[CHART]

 

                  More sustainable portfolio foundation

                  Each business has clear differentiated approach

                  Systematically building capabilities to establish future growth options

 

30



 

Grow value by creating a rich and diversified portfolio of specialised businesses

 

[CHART]

 

Optimise portfolio for sustainability, growth and return

                  Raise revenue productivity in Personal Banking

                  Lift performance and productivity in Wealth Management

                  Develop sustainable post-interchange cards strategy

                  Regain position in Small Business

                  Develop Institutional while reducing risk concentrations

                  Leverage specialised distribution in Mortgages

                  Advance customer franchise in NZ through local approach

                  Turn Asset Finance into a sustainable growth proposition

 

Create a portfolio of growth options

                  Invest in high growth domestic franchises

                  Leverage capabilities with partners in Asia-Pacific

 

31



 

Aim to make ANZ one of the best managed and most efficient banks in the world

 

                  Make execution a distinctive capability

                  Accelerate revenue and productivity momentum in businesses

                  Rebalance higher risk segments

                  Simplify operations and technology infrastructure

 

World class efficiency

 

[CHART]

 

Lower relative risk

 

[CHART]

 

32



 

Bold and different, leveraging a unique performance culture and business approach

 

[CHART]

 

Coordination and control

 

[CHART]

 

Motivation

 

                  Systematic improvement

 

                  Aim to be distinctive

                  financial

                  values

 

                  Build on preferred employer status

 

                  Gain shareholder and community recognition

 

                  Raise our game in execution to minimise surprises

 


*                 Benchmark comprises 33 of Australia’s Top 50 companies

 

33



 

Continuing to develop our culture

 

High staff satisfaction maintained

 

[CHART]

 

Over 10,000 of our people have experienced Breakout program

 

[CHART]

 

34



 

Outline

 

                  Strategy

 

                  Result review

 

                  Portfolio performance

 

                  Credit quality

 

35



 

Result driven by asset & deposit growth, non-interest income impacted by one offs

 

[CHART]

 


*  Sep-02 excludes significant transactions

 

36



 

Higher interest income, driven by strong asset growth

 

Average Lending & Deposit Volumes

 

[CHART]

 


* Business Lending includes Corporate & Small Business, and Institutional Segments. Deposits includes Esanda retail debentures

 

Interest Margins

 

[CHART]

 

37



 

Underlying non-interest income reasonable, but dominated by one-offs

 

[CHART]

 


*  Sep-02 excludes significant items

 

#  higher loyalty costs reflects change in pricing, and does not include higher volume impact

 

38



 

Expenses well controlled, cost income ratio flat

 

[CHART]

 

                  Growth spend held back due to lower income growth

 

                  Underlying half on half cost growth of 1.4%

 

                  Includes $10m increase in software amortisation

 

                  Restructuring costs of $32m taken, in line with previous half

 

                  Continued focus on re-engineering “business as usual” costs

 

39



 

Provisioning charge reflects conservative management

 

ELP Charge

 

[CHART]

 

                  ELP rate down 3bps – reflecting strong mortgage growth & improved risk profile

 

                  ELP Portfolio adjustment continued

 

                  accruing higher level of ELP, reflecting ongoing global economic uncertainty

 

40



 

Dividend payout ratio likely to trend upwards

 

              A progressive lift in the payout ratio likely over next three years towards high 60’s

 

              Expect to maintain 100% franking

 

Interim Dividend has doubled in six years

 

[CHART]

 

41



 

Outline

 

                  Strategy

 

                  Result review

 

                  Portfolio performance

 

                  Credit quality

 

42



 

A diversified portfolio performing well

 

 

 

Mar 03

 

Mar 02

 

Change

 

Institutional Banking

 

145

 

119

 

22

%

Personal Banking

 

137

 

121

 

13

%

Mortgages

 

131

 

123

 

7

%

Transaction Services

 

84

 

76

 

11

%

SME

 

78

 

65

 

20

%

New Zealand

 

74

 

61

 

21

%

Asia Pacific

 

67

 

45

 

49

%

Asset Finance

 

60

 

48

 

25

%

Corporate Banking

 

55

 

55

 

0

%

Wealth Management

 

51

 

48

 

6

%

Treasury

 

49

 

63

 

-22

%

Consumer Finance

 

47

 

79

 

-41

%

Foreign Exchange

 

43

 

41

 

5

%

Corp Fin & Advisory

 

38

 

41

 

-7

%

Capital Markets

 

36

 

31

 

16

%

Structured Finance

 

36

 

40

 

-10

%

INGA JV*

 

21

 

n/a

 

n/a

 

 

1st half NPAT $m

 

[CHART]

 


* Excludes funding costs and goodwill amortisation

 

43



 

Consumer Finance – challenges, but good underlying performance

 

Improved underlying performance (NPBT)*

 

[CHART]

 

Diversifying revenue*

 

[CHART]

 

Growth in Acquiring share

 

[CHART]

 

Issues

 

                  Loyalty schemes increasingly costly to operate

                  Reduction in interchange and loyalty costs likely to impact 2004 NPAT by not more than $40m

 


* Adjusted for under-accrual of loyalty points

 

44



 

Mortgages – well placed to benefit from shift to mortgage brokers

 

Growing presence

 

And we are well placed to participate

 

 

Broker penetration of mortgage market

=>

Low cost income ratio – efficient processing platform

 

+

[CHART]

Leading broker distribution model, with high quality MIS

 

+

                  80% of broker originated customers new to ANZ

Award winning products

 

+

                  92% purchase additional ANZ products (89% for network originated customers)

 

Brokers strongest in states where ANZ has weaker branch presence

 

45



 

Institutional & Investment Banking – a leading franchise

 

Consistently strong NPAT growth

 

[CHART]

 

More focused single customer limits

 

[CHART]

 

46



 

Corporate and SME – well positioned for upswing in business lending

 

A very strong Corporate franchise

 

Market Share*

 

[CHART]

 

Customer Satisfaction*

 

[CHART]

 

                        Market advantage with “Wall St to Main Street” capability

                        Strong cross selling

                        Focus around total customer value to Group

 


* Roberts Research 2002 (customers with turnover between $10m-$100m)

 

Investment in SME has yielded strong balance sheet growth without loss of credit standards

 

FUM (loans & deposits)

 

[CHART]

 

              Risk grade profile has improved over past 6 months

              80% of portfolio fully secured

 

              Enhanced customer service proposition

 

              Disciplined business execution and a stronger performance culture

 

              Investment in an expanded business ‘footprint’ – customer facing staff up 10%

 

47



 

Personal banking – impacted by margin squeeze on deposits and fee changes

 

[CHART]

 


* Includes tax impact

 

                  Overall 16 bp decline in margins due to

 

                  Lower interest rates over the half

 

                  Increased flows to higher rate deposit products such as TDs

 

                  Fees lower due to new transaction account fee structure and lower honour fees

                  RCF rolled out in NSW & Vic, remainder of States over calendar 2003

 

48



 

but strong account and deposit growth

 

Access Accounts

 

[CHART]

 

New accounts

 

up 14%

 

 

 

 

 

Closed accounts

 

down 15%

 

 

 

 

 

Net new accounts

 

up 229%

 

 

 

Deposits ($b)

 

[CHART]

 

New deposit strategy launched in Aug 01

 

49



 

JV performance – good insurance and expense performance, offset by FM

 

ING Australia NPAT*

 

[CHART]

 


* Movements on a semi-annualised basis

 

              Life Insurance business performing well due to improved service, efficiency, and claims management

 

              Subdued equity market conditions continue to impact Funds Management business

 

              Improved capital investment returns, combined with hedge delivering cash rate of return

 

              Synergies being extracted in line with expectations

 

 

50



 

Valuation supports carrying value of investment in INGA JV

 

[CHART]

 

51



 

Outline

 

                  Strategy

 

                  Result review

 

                  Portfolio performance

 

                  Credit quality

 

52



 

Arrears profile close to historical lows

 

Arrears > 60 days

 

[CHART]

 

              Consumer sector in good shape, with continuing low levels of unemployment and low interest rates

 

              Mortgage arrears remain very low

 

              Ongoing focus on collections management

 

              Upwards movement in cards arrears expected, will be carefully managed

 

              Scorecards remain “tight”

 


* excl Asset Finance, Pacific, Asia

 

53



 

Mortgages portfolio healthy*

 

High quality arrears profile

 

Australia & NZ – 60 Days Past Due

 

[CHART]

 

Strong LVR profile

 

[CHART]

 

Increasing flexibility to service mortgage

 

Uncommitted Monthly Income at Application

 

[CHART]

 

Equity Loans remain modest

 

[CHART]

 


* Charts are for Australia only excluding Origin

 

54



 

Mortgages – low representation in inner city Sydney and Melbourne

 

Market Share by location

 

[CHART]

 


* limited sample size

# source: Roy Morgan

 

              Tightened assessment criteria for inner city investment properties

 

              Delinquency profile of inner city borrowers in line with average

 

55



 

Domestic corporates well placed

 

Domestic corporates remain lowly geared

 

Gearing ratio

 

(Debt to Equity)#

 

[CHART]

 


# source: ABS

 

Reflected in healthy risk grade profile*

 

[CHART]

 

B+ to CCC

 

3.2

%

2.5

%

2.9

%

 

 

 

 

 

 

 

 

CCC and Lower

 

1.2

%

0.9

%

0.8

%

 


* Institutional & Corporate Australia & NZ

 

56



 

US energy portfolio – some issues, remains containable

 

[CHART]

 

B+ to CCC

 

12.3

%

13.0

%

3.8

%

3.9

%

4.0

%

2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non Accrual

 

4.0

%

4.2

%

8.0

%

8.2

%

11.2

%

3

 

 

>BB-  = B+ B, B-, CCC & non-accrual

 

Excludes uncommitted facilities

 

Includes utilised guarantees and market related products

 

57



 

Deterioration in global electricity sector has stabilised

 

KMV Median Expected Default Frequency

 

[CHART]

 

                  Deterioration in US and European utility sectors largely occurred prior to our 2002 Annual Results announcement

 

                  In 2002, S&P ratings actions in US power industry resulted in 182 downgrades, against 15 upgrades

 

                  First half 2003 has seen some evidence of stabilisation

 

58



 

Global telco portfolio – no material issues expected

 

[CHART]

 

B+ to CCC

 

1.9

%

6.8

%

7.8

%

11.1

%

5

 

Non Accrual

 

4.8

%

3.5

%

4.3

%

7.2

 

3

 

 

>BB- = B+ B, B-, CCC & non-accrual

 

59



 

Institutional & Corporate Risk Grade Profiles

 

Institutional Banking (Outstandings)

 

[CHART]

 

Corporate Banking Aust. (Outstandings)

 

[CHART]

 

B+ to CCC

 

2.7

%

2.3

%

2.6

%

3.1

%

7.4

%

6.4

%

4.1

%

2.8

%

Non Accrual

 

1.6

%

2.0

%

1.8

%

1.7

%

1.7

%

1.7

%

1.3

%

1.4

%

 

60



 

Offshore SCCLs now in place

 

Comparative SCCL Customer Limits

 

[CHART]

 

Lending type SCCL % for offshore Corporates (excl. GSF)

 

[CHART]

 

GSF Direct Exposures capped at AUD 450m for > 100% Security and AUD 200m for < 100% Security

 

61



 

Top 10 exposures further reduced

 

Top 10 committed exposures

 

[CHART]

 

Limits represent total 7 month limits excluding uncommitted and non-recourse, net of credit derivatives

 

Top 10 exposures as % of ACE

 

[CHART]

 

excludes non-recourse and uncommitted facilities

 

62



 

Specific provisions down 29% – no large single provisions

 

Provisions

 

[CHART]

 

1st half Specific Provisions by size

 

[CHART]

 

                  No major individual specific provisions during the half

 

63



 

New non-accruals down 50% on March 2002

 

Geographic

 

New Non-Accrual Loans

 

[CHART]

 

New non-accrual loans by source

 

[CHART]

 

64



 

Non-accrual loans continue to fall, reflecting overall health of portfolio

 

Historic

 

[CHART]

 

Geographic

 

Gross Non-Accrual Loans

 

[CHART]

 

65



 

Existing and future problem loans well provided for

 

SP/NALs

 

[CHART]

 

GP/RWA

 

[CHART]

 

66



 

Important information

 

              This presentation relates to the offer of ANZ StEPS (Offer). The Offer will be made in, or accompanied by, a copy of the prospectus which was lodged with ASIC on 14 August 2003 (Prospectus).  Any investor wishing to acquire ANZ StEPS must read the Prospectus and complete the application form that will be in or accompanying the Prospectus.

 

              Australia & New Zealand Banking Group Limited (ABN 11 005 357 522) (ANZ), ANZ Holdings (New Zealand) Limited (ARBN 105 689 932) (ANZ (NZ)), and their respective directors, agents, officers, employees and advisers disclaim all liability for this presentation.  The only information that ANZ and ANZ(NZ) will assume responsibility for is set out in the Prospectus.

 

              This presentation is provided to potential investors for the sole purpose of assisting them to evaluate their interest in participating in the Offer and, being an overview, it does not contain all information necessary to an investment decision and does not purport to be a complete description of ANZ, ANZ(NZ) or the Offer.  Prospective investors must make their own independent evaluation of an investment in ANZ StEPS having consulted with their legal, tax, business and financial advisors.

 

              The pro forma financial information is provided for information purposes only and does not purport to accurately reflect the results that would have been obtained or the financial position that would have existed during and for the periods presented, and is not a forecast of operating results to be expected in the future.

 

              No representation or warranty, express or implied, is made as to the accuracy, adequacy or reliability of any statements, estimates or opinions or other information contained in this presentation including forward-looking statements.  To the maximum extent permitted by law, ANZ and ANZ(NZ) and their partners, directors, officers, employees and agents disclaim all liability and responsibility (including without limitation any liability arising from fault or negligence on the part of any of them) for any direct or indirect loss or damage which may be suffered by any recipient through use of or reliance on anything contained in or omitted from this presentation.

 

              This presentation is being supplied to you solely for your information, and may not be reproduced or distributed to any other person (including any distribution in the United States) or published, in whole or in part, for any purpose without the prior written permission of ANZ and ANZ(NZ).

 

67



 

For further information including a copy of this presentation visit

 

www.anz.com

 

68



 

 

13 August 2003

 

ANZ General Meeting of Shareholders

The Auditorium, Melbourne Exhibition Centre

Level 2, 2 Clarendon Street

Southbank, Melbourne

 

Address by:

 

Charles Goode, Chairman, ANZ

 

 

John McFarlane, Chief Executive Officer, ANZ

 

Ladies and gentlemen, good morning.  My name is Charles Goode.

 

As your Chairman, it is my pleasure to welcome you to this General Meeting of ANZ.

 

As a quorum is present I now formally declare this General Meeting open.

 

You should have all received a copy of the notice of meeting and if there is no objection, I propose to take it as read.

 

Extra copies of the Notice of meeting are available at the registration desk outside, if anyone would like them.

 

The purpose of our meeting today is to consider three resolutions which will allow us more flexibility in our capital management strategy.

 

Those resolutions are:

 

                  A resolution to confirm your approval to a buy-back of the preference shares issued in 1998.

 

                  A resolution to amend the Company’s Constitution to provide greater flexibility to issue preference shares.

 

                  And a resolution to approve a proposed issue by ANZ of stapled securities.

 

As we come to vote on each of these resolutions, I will open the meeting for questions or comments from the floor on matters related to each item of business.  We will then vote on that resolution.  Once we have considered and voted on the three resolutions, the formal part of this morning’s meeting will be concluded.

 

I will then ask John McFarlane to speak to you briefly about ANZ’s progress during the year.

 

1



 

At the end of the meeting, the directors and I would be pleased if you would join us for a cup of tea or coffee in the foyer.

 

Let me introduce you to the directors and some members of ANZ’s executive team who are here today.

 

Starting on your far left is Jerry Ellis.  Jerry has extensive mining and manufacturing experience in Australia and overseas, notably during his long career with BHP.  He is Chairman of Pacifica Group Ltd, the Australia-Japan Foundation, and is Chancellor of Monash University.  Jerry chairs the Risk Management Committee and he is a member of the Compensation Committee

 

Next to him is John McFarlane, the Chief Executive Officer.  This year is John’s sixth as Chief Executive.

 

On your right is Margaret Jackson.  Margaret is Chairman of Qantas Airways Limited and the Methodist Ladies College.  She is a Board member of John Fairfax Holdings Limited, the Howard Florey Institute and the Brain Imaging Research Foundation.  Margaret is a member of the Audit Committee, the Risk Management Committee, the Compensation Committee and the Nominations and Corporate Governance Committee.

 

The other directors of ANZ were unable to attend today’s meeting and give their apologies.

 

Now let me introduce the ANZ executives on the stage.  On my left is the Chief Financial Officer, Peter Marriott.  Behind me are Tim L’Estrange, Group General Counsel, and Tim Paine, Company Secretary and Deputy General Counsel.

 

Ladies and gentlemen, let me now move to the business of the meeting.

 

As part of ANZ’s capital management strategy, the Board regularly monitors and reviews the most cost efficient and effective forms of capital available.  As a result of such a review, the Board now wishes to ensure that ANZ has the flexibility to:

 

                  buy-back or redeem the preference shares issued by the Company in 1998 and

 

                  be able to issue suitable forms of capital as and when appropriate.

 

In fact, we intend to lodge a prospectus tomorrow for a new issue of stapled securities.

 

This stapled security will be made up of two different kinds of securities that may not be traded separately – which is why they are called “stapled securities”.  Each stapled security will comprise an unsecured note issued by a New Zealand subsidiary of ANZ, stapled to a preference share issued by ANZ.  In certain events or on certain dates each stapled security can be exchanged for the face value of a note, which is $100, or for ordinary shares in ANZ.

 

We have called these securities Stapled Exchangeable Preferred Securities, or “STEPS”.

 

2



 

It is intended that these securities would form part of the Company’s Tier 1 capital.

 

Tier 1 capital is the capital we as a bank are required to maintain under prudential standards set by the Australian Prudential Regulation Authority, or as it’s commonly known, APRA.

 

The proceeds will strengthen ANZ’s balance sheet, and increase its financial flexibility.  The proceeds may be used to partially fund any buy-back or redemption of the preference shares we issued in 1998.  The proceeds from the issue of these securities may also be used for other corporate purposes determined by the Directors.

 

Therefore, this general meeting was called to ensure the directors are able to pursue all available capital management options, and thereby enhance the benefits for all shareholders.

 

Delaying consideration of these resolutions for 4 months until the AGM may have eroded potential gains.

 

Before I introduce the first item of business, let me run through the procedures we will use to ensure each shareholder who wants to ask a question or make a comment has the opportunity to do so.

 

First of all it is important to note that this is a meeting to deal with three specific items of business.

 

Therefore, it is not appropriate for customers to ask questions about their personal banking arrangements at this meeting.

 

If you do have questions about personal banking issues please see one of the customer representatives or one of our executives in the foyer after the meeting and they will be pleased to help you.

 

Now, when you registered at the attendance desk this morning, you would have received one of three cards:

 

                  a BLUE Admission & Voting card if you are a shareholder, or a shareholder’s representative, proxy, or attorney. The BLUE card means you can vote and ask questions.

 

                  a YELLOW Admission card if you are a non voting shareholder.  The YELLOW card means you are entitled to ask questions but you cannot vote at today’s meeting.

 

                  a WHITE Admission card if you are visitor.  The WHITE card means you are not entitled to vote or to ask questions.

 

In the interests of all shareholders would you please ask all your questions when you are at the microphone and be as brief as your questions allow.  The attendants you see standing by the microphones are ANZ staff members.

 

3



 

If you have a question about the three resolutions we are considering today, I invite you to go to the nearest microphone  ...  show your BLUE or YELLOW admission card, and advise the staff member of your name.  The attendant will then introduce you to the meeting.

 

I will put all resolutions to the meeting for a vote on a show of hands.  However I reserve the right to call for a poll on any or all of the items. The poll would be held at the conclusion of the voting on all three items of business.

 

Let’s now move on to the first item of business.

 

The first item of business is to pass a special resolution permitting a buy-back of the preference shares issued by the Company in 1998.  The issue of these preference shares raised approximately US$775 million in additional Tier 1 capital.  They were issued in two series of approximately US$400 million and US$375 million.  The terms of these preference shares give ANZ the right to repay the capital by redemption or buy-back in certain circumstances.

 

In order to preserve flexibility, at the 1999 Annual General Meeting a special resolution was passed to permit a possible buy-back of those shares.  Given that nearly four years have passed since that resolution, we are now seeking your confirmation of that approval.

 

I therefore now move that the first resolution that “the Company approves the terms of the selective buy-back agreement relating to the preference shares issued by the Company in September 1998 and November 1998, as described in the explanatory notes” be passed as a special resolution.

 

(meeting procedures)

 

The second item of business relates to a proposed amendment to the Company’s constitution by inserting the terms set out in the notice of meeting to permit the issue of preference shares.

 

As I have already mentioned, the Stapled Exchangeable Preferred Security we propose to issue includes a preference share.  A preference share is a type of share that ranks ahead of ordinary shares for the purposes of dividends payments, or claiming on the assets of a company should it be wound up.

 

Since our current Constitution was adopted in 1999 ANZ has not issued any preference shares.  We now need to amend our Constitution to permit the issue of this type of security.

 

This is because the law requires that in order to issue preference shares, a company’s Constitution must set out certain rights in relation to those shares, including voting rights, rights to dividends and the basis on which the holders would participate on a winding up of the Company.

 

The rule we are proposing to insert in the Constitution is to deal with the last aspect, that is, the rights of preference shareholders in the unlikely event of a winding up of the company.

 

4



 

I now move the second resolution as a special resolution that rule 23 of the Company’s Constitution be amended as set out in the notice of meeting to enable the Company to issue preference shares.

 

(meeting procedures)

 

Resolution 3 is to approve as an ordinary resolution the issue of up to 12.5 million reset preferred securities substantially on the general terms and conditions as described in the explanatory notes to the notice of meeting.

 

This resolution is to approve the issue of the Stapled Exchangeable Preferred Securities I have referred to earlier.  I have already referred briefly to the main features of these securities.

 

Any specific or technical questions in relation to the terms of these securities are best answered by referring to the prospectus we propose to lodge with the Australian Securities & Investments Commission tomorrow.  You will see from the prospectus that we intend to offer up to 10 million preference shares with a value of $1 billion.

 

Over the next few days we will mail all ANZ shareholders a form regarding the offer. If you are interested in investing in the securities, simply complete the form, mail it to ANZ and we will send you a copy of the prospectus and an application form.

 

You will be eligible for a priority allocation of these securities over applicants from the general public.  If you are interested in investing in these securities, I would urge you to read the entire prospectus carefully.

 

Should you have any further questions you should consult your stockbroker, accountant or other professional adviser.  You may also call the ANZ StEPS Information Line – that telephone number will be in the prospectus.

 

I now move the third resolution as an ordinary resolution that “the Company approves the issue of up to 12,500,000 reset preferred securities substantially on the general terms and conditions as described in the explanatory notes”.

 

(meeting procedures)

 

Ladies and gentlemen, that concludes the formal business of today’s meeting.

 

But before I declare the meeting closed, I would like to invite our Chief Executive Officer, John McFarlane, to make some brief comments on ANZ’s current performance.  John McFarlane...

 

Thank you Charles.  Good morning

 

Now as you know we don’t normally say anything about our full year result this close to the end of the year … but … in light of today’s meeting and tomorrow’s shareholder information meeting in Adelaide we did issue a shareholder update this morning.

 

5



 

In that outlook we confirmed our earnings outlook for the year remained unchanged. Our earnings for the 2003 financial year would be around 8 per cent higher than last year excluding last year’s one-off profit on the sale to the ING Joint Venture of ANZ Funds Management.

 

The recent overall momentum at ANZ has been broadly consistent with market expectations and this has enabled us to stay on track.

 

Mortgage demand has remained strong, offset by a difficult interest rate climate and low institutional loan demand.

 

Strong asset growth in the April to July period saw our Consumer Finance business back on track after a difficult first half. Consumer Finance takes in our credit card and personal loan operations.  While the business faces a challenging period in 2004 associated with the reduction in interchange we are increasingly confident the impact of the changes is unlikely to be greater than our earlier estimates.

 

In line with the surprising strength in the Australian housing market, mortgage drawdowns by value were up 32 per cent in the April to July compared with the same period last year.

 

Through our ESANDA and UDC businesses we have a significant share of the motor vehicle and equipment leasing markets in Australia. In strong markets, they experienced good new business growth and together with a continuing a focus on productivity have seen positive earnings performance.

 

Our personal banking business has continued to grow deposits and I’m particularly pleased to say it has grown its market share in rural Australia. This improved performance has been eroded to some extent by continuing margin pressure in retail banking generally and the increased investment in our Restoring Customer Faith and Bank with a Human Face programs.  These programs are still in their early days.

 

ANZ ‘s joint venture with ING continues to perform reasonably well in a difficult market. In the June quarter, independent research showed ING Australia had established a solid top four position with $27.8 billion of retail assets under management.

 

In New Zealand our overall performance has been relatively flat although asset growth has been solid.

 

Fee and loan growth in our institutional business has been modest in Australia and New Zealand, against expectations that we would have had higher business loan demand. This has been offset by higher contributions from foreign exchange and a strong performance from our capital markets group.

 

A particular focus of ANZ has been small to medium sized business. I’m pleased to say we have seen a strong performance from our corporate and small business group who service this segment. Lending is up 13 per cent and deposit growth up 9 per cent.

 

6



 

Overall domestic credit quality remains sound. We do though continue to be cautious about parts of the offshore investment banking portfolio, including the US energy sector. While there have been some minor developments, these don’t affect our previously stated view of potential losses and we continue to believe these are containable.

 

As a result we expect specific provisions from our international investment banking businesses to have peaked and for specific provisions in 2003 to be lower than 2002. In general the overall quality of our loan portfolio continues to improve.

 

We will provide guidance on the year ahead when we release our 2003 full year results on 24 October. Early indications are that 2004 will be more challenging for the industry as a whole than 2003.  Credit card interchange reform, a difficult interest rate environment, the strong Australian dollar and a softening outlook for housing will all increase the challenge.

 

Having said that we expect 2004 earnings per share growth to remain reasonable.

 

Thank you ………..Charles

 

Thank you John.

 

Ladies and Gentlemen, as that concludes today’s meeting, I now declare the meeting closed.

 

Please join us for refreshments in the foyer.

 

Thank you for joining us here today and thank you for your patience.

 

(ends)

 

7



 

 

 

 

Corporate Affairs

Level 22, 100 Queen Street

Melbourne Vic 3000

Telephone 03 9273 6190

Facsimile 03 9273 4899

For Release: 13 August 2003

 

www.anz.com

 

ANZ confirms earnings outlook

 

ANZ today issued a shareholder update confirming an unchanged earnings growth outlook for the year of around 8%, broadly in line with market consensus for full-year 2003 bottom-line after tax profit growth (excluding significant transactions in the prior year).

 

The announcement has been made in the light of public shareholder meetings in Melbourne and Adelaide this week.

 

ANZ Chief Executive Officer Mr John McFarlane said: “Recent overall momentum has been broadly consistent with market expectations.  Mortgage demand has remained strong, offset by a difficult interest rate climate and low institutional loan demand.”

 

“We will provide guidance on 2004 at our 2003 Full Year Results in October.  Early indicators are that 2004 will be more challenging for the industry as a whole than 2003.  Credit card interchange reform, a difficult interest rate environment, the strong Australian Dollar and a softening outlook for housing all increase the challenge.  This said, we expect 2004 earnings per share growth to remain reasonable,” Mr McFarlane said.

 

Business Segment Update

 

Consumer Finance.  Strong asset growth in the April-July period has confirmed this segment is back on track with improved momentum following issues with the accrual of loyalty points in the first half.  The renewed momentum is based on growth in consumer spend and related improvements in net interest income following 10% growth in lending assets in the year to date (10 months to July 2003).

 

Consumer Finance however faces a challenging period in 2004 associated with the reductions in credit card interchange following the Reserve Bank of Australia’s announced reforms.  Changes will be required to credit card loyalty programs to ensure that in the new environment ANZ has sustainable products for its customers and a sustainable business for shareholders.  ANZ is increasingly confident that the impact of the changes is unlikely to be greater than our earlier estimate.

 

Mortgages.  Mortgage drawdowns by value were up 32% in the first four months of the second half compared with the same period in 2002.  This includes strong end of financial year demand and consumers considering the prospect that interest rates will remain low.  Demand is expected to ease gradually into 2004.

 

While ANZ’s branch network is continuing to perform well, third-party share of the overall market has steadily increased and this channel now accounts for 42% of ANZ drawdowns by value compared with 29% in the same period in 2002.  This reinforces the strength of ANZ’s third-party distribution model and product offering which continues to provide a solid share of growth in this channel.  Australian mortgage outstandings are up 17% year to date.

 

Australia and New Zealand Banking Group Limited ABN 11 005 357 522

 



 

Asset Finance.  Strong business conditions, good growth in new business writings based on the strength of Esanda and UDC market positions, and continued productivity improvement associated with a more focused business model continue to generate a positive earnings performance. Lending assets have grown 8% year to date.

 

Personal Banking.  Deposits have continued to grow, with liabilities up 6% in the year to date.  ANZ’s focus on developing its business in rural Australia continues to see growth in market share and improved business performance.  Revenue has been eroded to some extent by continuing margin pressure and increased costs associated with the ongoing Restoring Customer Faith program.

 

ING Joint Venture.  ANZ’s funds management joint venture with ING continues to perform reasonably well in a difficult market.  This is reinforced by the June Quarter ASSIRT Market Share Report, which shows that ING Australia has established a solid top four position with $27.8 billion of Retail Assets under management.  Business integration is on schedule with cost synergies expected to be towards the top end of estimates previously provided.

 

New Zealand.  Overall performance has been relatively flat.  Asset growth has been solid, offset by lower deposit margins, following recent cuts to Official Cash Rates and investment in growth initiatives.  Lloyds TSB has announced that it has entered discussions with a number of parties regarding the future ownership of its subsidiary, the National Bank of New Zealand.  ANZ is one of those parties.

 

Institutional Financial Services.  Fee and loan volume growth have been modest in Australia and New Zealand offset by higher contributions from Foreign Exchange, following recent volatility in the Australian Dollar and a strong performance from Capital Markets.  Structured Finance International continues to be subdued reflecting ANZ’s ongoing strategy to reduce non-core international corporate lending, which coupled with the weak $US, has seen overall lending for Institutional Financial Services decline by 3% year to date.

 

Corporate and Small-Medium Business.  Lending (up 13% YTD) and deposit growth (up 9% YTD) continue to underpin a strong performance, with positive trends in domestic business investment.

 

Credit Quality.  Overall domestic credit quality remains sound.  We continue to be cautious regarding parts of the offshore investment banking portfolio, including the US energy sector.  While there have been some developments, these do not affect our previously stated view of potential losses, and we continue to believe these are containable.  Accordingly, ANZ still expects specific provisions from its international investment banking businesses to have peaked and for specific provisions in 2003 to be lower than 2002.  In general, the overall quality of ANZ’s loan portfolio continues to improve.  In this more stable environment with uncertainty in its international lending portfolio reducing, there may be scope in 2004 to reassess the associated special Economic Loss Provision charge established in 2001.

 

ANZ will report its Full Year Results for the period ended 30 September 2003 on 24 October 2003.

 

For media enquiries contact:

 

For analyst enquiries contact:

 

 

 

Paul Edwards

 

Simon Fraser

Head of Media Relations

 

Head of Investor Relations

Tel:  03-92736955 or 0409-655 550

 

Tel:  03-9273 4185 or 0412-823 721

Email:  paul.edwards@anz.com

 

Email:  simon.fraser@anz.com

 

 

 

 

 

Stephen Higgins

 

 

Senior Manager Investor Relations

 

 

Tel:  03-9273 4282 or 0417-379 170

 

 

Email:  higgins@anz.com

 



 

 

 

 

Corporate Affairs

Level 22, 100 Queen Street

Melbourne Vic 3000

Telephone 03 9273 6190

Facsimile 03 9273 4899

www.anz.com

 

For Release: 14 August 2003

 

ANZ Stapled Exchangeable Preferred Securities offer

 

ANZ today announced an offer of up to $750 million of ANZ Stapled Exchangeable Preferred Securities (ANZ StEPS), with the ability to accept oversubscriptions of up to $250 million.

 

The announcement coincides with the lodgement today of the ANZ StEPS prospectus with the Australian Securities and Investments Commission.

 

ANZ Chief Executive Officer Mr John McFarlane said: “The ANZ StEPS offer forms part of ANZ’s ongoing capital management program.

 

“The proceeds from the offer will strengthen ANZ’s balance sheet and increase its financial flexibility.  The proceeds may be used to partially fund any buy-back or redemption of the preference shares that were issued in the United States in 1998 or for other purposes determined by the Directors,” Mr McFarlane said.

 

Key features of the ANZ StEPS offer include:

                  a quarterly floating distribution rate, calculated as the 90 day bank bill rate plus a margin;

                  distributions are payable in preference to any dividends on ANZ’s ordinary shares;

                  the ability for ANZ to change certain terms on reset dates, the first of which is 15 September 2008;

                  the ability for ANZ or investors to exchange ANZ StEPS for cash or ordinary shares in certain circumstances; and

                  ASX quotation, subject to successful application.

 

Investors wishing to acquire ANZ StEPS will need to complete and return the application form attached to or accompanying the prospectus during the offer period. The offer period is scheduled to open at 9:00am on 22 August 2003 and close at 5:00pm on 17 September 2003.

 

ANZ’s Australian ordinary shareholders will receive a priority allocation over applicants who are members of the general public if there is excess demand for ANZ StEPS. ANZ ordinary shareholders can call the ANZ StEPS InfoLine on 1 800 022 060 to receive a personalised shareholder application form and prospectus.

 

Full details of the ANZ StEPS offer are contained in the prospectus which is available from the ANZ website at http://www.anz.com/anzsteps or by calling the ANZ StEPS InfoLine on 1 800 022 060.

 

For media enquiries, contact:

 

For investor relations enquiries, contact:

 

 

 

Paul Edwards

 

Stephen Higgins

Head of Media Relations

 

Senior Manager Investor Relations

Tel:  03-92736955 or 0409-655 550

 

Tel:  03-9273 4282 or 0417-379 170

Email:  paul.edwards@anz.com

 

Email:  higgins@anz.com

 

Australia and New Zealand Banking Group Limited ABN 11 005 357 522

 



 

Additional information

 

ANZ StEPS structure

 

An ANZ StEPS is a ‘stapled’ security comprising an interest paying note (issued by ANZ Holdings (New Zealand) Limited, a wholly-owned subsidiary of ANZ) and a preference share on which dividends will not be paid while it is ‘stapled’ to a Note. The two securities may not be traded separately.  The issue price of each ANZ StEPS is $100.00, and applications must be for a minimum of 50 ANZ StEPS ($5,000).

 

ANZ StEPS floating distribution rate

 

The distribution rate for the period to 15 December 2003 will be set at the 90 day bank bill rate (of 4.85%) plus an initial margin.  The initial margin will be announced on 21 August 2003 following a bookbuild conducted on 19 and 20 August 2003.

 

ANZ StEPS external credit ratings

 

Standard & Poor’s and Moody’s have assigned an Issue Credit Rating of ‘A-’ and ‘A2’ respectively for the ANZ StEPS.  The ratings are not ‘market’ ratings nor are they a recommendation to buy, hold or sell securities (including ANZ StEPS).

 

Reset of ANZ StEPS

 

The distribution rate on ANZ StEPS and certain other terms may be changed by ANZ on reset dates. The first reset date is 15 September 2008.

 

Exchange of ANZ StEPS

 

Holders of ANZ StEPS may require exchange of their ANZ StEPS on any reset date. On exchange, holders of ANZ StEPS will receive for each ANZ StEPS, at ANZ’s choice, a number of ordinary shares in ANZ (calculated in accordance with a conversion ratio) or $100.00 cash (subject to APRA’s approval).  In certain circumstances, ANZ may also require exchange.

 

Joint Arrangers & Bookrunners

 

Deutsche Bank and UBS

 

Joint Lead Managers

 

ANZ Investment Bank, Deutsche Bank and UBS

 

Co-Managers

 

ABN AMRO Morgans Limited, ANZ Securities Limited, Bell Potter Securities Limited, Citigroup Global Markets Australia Pty Limited, Deutsche Securities Australia Limited, Macquarie Equities Limited, Ord Minnett Limited and UBS Private Clients Australia Limited.

 

On-line Broker

 

E*TRADE Australia Securities Limited

 

Key dates

 

Announcement of offer and lodgement of prospectus with ASIC

 

14 August 2003

Record date – for determining ordinary shareholders’ priority allocation

 

(7.00pm) 13 August 2003

Bookbuild to set initial margin

 

19-20 August 2003

Announcement of initial margin

 

21 August 2003

Opening date

 

(9.00am) 22 August 2003

Closing date

 

(5.00pm) 17 September 2003

Allotment date

 

24 September 2003

Start of trading of ANZ StEPS on ASX (deferred settlement basis)

 

25 September 2003

Dispatch of holding statements

 

1 October 2003

Start of trading of ANZ StEPS on ASX (normal settlement basis)

 

2 October 2003

First distribution payment date

 

15 December 2003

First reset date

 

15 September 2008

 

These dates are subject to change.

 



 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

 

Link to searchable text of slide shown above

 


 

Searchable text section of graphics shown above

 



 

ANZ Stapled Exchangeable Preferred Securities

(ANZ StEPS)

 

August 2003

 

[LOGO]

 



 

Today’s presentation

 

1. Offer summary

 

2. ANZ - Update on operations and strategy

 

3. ANZ - Effect of the issue

 

4. Offer structure

 

5. Bookbuild process

 

6. Supplementary information

 

August 2003 ANZ StEPS Presentation

 

 

 

2



 

Offer summary

 

                  ANZ Stapled Exchangeable Preferred Securities (ANZ StEPS)

 

                  Offer of up to $750m with ability to accept oversubscriptions of up to $250m

 

                  Floating rate securities paying a distribution set at a margin over the 90 day bank bill rate

 

                  Issue credit rating

 

                  ‘A-’ by Standard & Poor’s

                  ‘A2’ by Moody’s

 

                  Qualifies as Tier 1 Capital

 

                  Part of ANZ’s ongoing capital management program

 

3



 

Today’s presentation

 

1. Offer summary

 

2. ANZ - Update on operations and strategy

 

3. ANZ - Effect of the issue

 

4. Offer structure

 

5. Bookbuild process

 

6. Supplementary information

 

4



 

Delivering sustainable profit growth

 

 

 

 

 

 

v Mar 02

 

2003 interim results

 

 

 

 

 

NPAT

 

$

1,141

m

8.7% é

 

EPS

 

72

cents

8.6% é

 

Cash EPS

 

74

cents

10.4% é

 

Interim dividend

 

44

cents

12.8% é

 

Net specific provisions

 

$

259m

 

29% ê

 

 

 

 

 

 

 

 

Before significant transactions

 

 

 

 

 

NPAT

 

$

1,141

m

7.0% é

 

EPS

 

72

cents

6.8% é

 

Cash EPS

 

74

cents

8.7% é

 

 

A track record of strong NPAT growth*

 

[CHART]

 


Excluding significant transactions

 

5



 

A diversified portfolio performing well

 

 

 

Mar 03

 

Mar 02

 

Change

 

Institutional Banking

 

145

 

119

 

22

%

Personal Banking

 

137

 

121

 

13

%

Mortgages

 

131

 

123

 

7

%

Transaction Services

 

84

 

76

 

11

%

SME

 

78

 

65

 

20

%

New Zealand

 

74

 

61

 

21

%

Asia Pacific

 

67

 

45

 

49

%

Asset Finance

 

60

 

48

 

25

%

Corporate Banking

 

55

 

55

 

0

%

Wealth Management

 

51

 

48

 

6

%

Treasury

 

49

 

63

 

-22

%

Consumer Finance

 

47

 

79

 

-41

%

Foreign Exchange

 

43

 

41

 

5

%

Corp Fin & Advisory

 

38

 

41

 

-7

%

Capital Markets

 

36

 

31

 

16

%

Structured Finance

 

36

 

40

 

-10

%

INGA JV*

 

21

 

n/a

 

n/a

 

 

1st half NPAT $M

 

[CHART]

 


*  Excludes funding costs but includes goodwill amortisation

 

6



 

On track in the second half

 

                  Consumer Finance – back on track

 

                  Corporate & SME - performing well, lending growth of 13% YTD

 

                  New Zealand – relatively flat

 

                  Mortgages – strong lending growth continues, up 17% YTD

 

                  Asset Finance – positive momentum continues

 

                  Personal Banking – good deposit growth, some margin pressure

 

                  INGA JV – performing well in a difficult market

 

                  Institutional – modest growth, continued de-risking

 

7



 

Outlook for 2004

 

                  Planning for 2004 not finalised, however most business units continue to perform well

 

                  Some external challenges in 2004

 

                  Credit card interchange

                  Unfavourable interest rate environment

                  Strong $A

                  Softening housing outlook

 

              Despite these challenges, we expect EPS growth to remain reasonable

 

8



 

Distinctive strategy and track record

Four themes going forward

 

              Leverage real capabilities to build sustainable strategic position

 

              Grow value by creating a rich portfolio of specialised businesses

 

              Become one of the most efficient and best-managed banks in the world

 

              Bold and different, leveraging a unique performance culture and business approach

 

ANZ relative TSR

 

[CHART]

 


*                 CBA, NAB, WBC

 

9



 

Today’s presentation

 

1.               Offer summary

 

2.               ANZ - Update on operations and strategy

 

3.              ANZ - Effect of the issue

 

4.               Offer structure

 

5.               Bookbuild process

 

6.               Supplementary information

 

10



 

‘AA’ category rating supported by strong capital position

 

Drivers of ACE ratio

 

[CHART]

 

Peer Comparison
ACE/RWA

 

[CHART]

 

11



 

Pro forma regulatory capital position

 

                  Issue forms part of ANZ’s ongoing capital management program and

 

                  Will strengthen ANZ’s balance sheet

                  Will increase financial flexibility

                  May be used to buy-back or redeem Series 1 and Series 2 TrUEPrS, or

                  May be used for other purposes

 

                  APRA has classified ANZ StEPS as Tier 1 Capital

 

                  ACE ratio unchanged following ANZ StEPS issue

 

12



 

Today’s presentation

 

1.               Offer summary

 

2.               ANZ - Update on operations and strategy

 

3.               ANZ - Effect of the issue

 

4.              Offer structure

 

5.               Bookbuild process

 

6.               Supplementary information

 

13



 

Offer structure - key terms

 

                  ANZ StEPS – a stapled security comprising

 

                  Interest paying note issued by ANZ (NZ)

                  Preference share issued by ANZ which does not pay dividends while ‘stapled’ to the note

 

                  Offer size

 

                  Up to $750m with the ability to accept oversubscriptions of up to $250m

 

                  Preferred non-cumulative quarterly distributions

 

                  Distribution rate = market rate (initially 4.85% p.a.) + margin p.a.

 

                  Certain terms can be changed on a reset date

 

                  First reset date = 15 September 2008

 

                  Expected to be ASX-quoted

 

14



 

Preferred non-cumulative distributions

 

                  Until the first reset date, floating rate distributions, paid quarterly

 

                  Distribution rate until reset date = 90 day bank bill rate + margin

 

                  Initial distribution rate = 4.85% p.a. + initial margin p.a.

                  Initial margin is set by bookbuild on 19-20 August

 

                  Until the first reset date, distribution rate changes quarterly with the 90 day bank bill rate

 

                  Distributions payable on 15 March, 15 June, 15 September and 15 December

 

                  First distribution payable on 15 December 2003

 

15



 

Payment tests, ‘dividend stopper’ and ranking

 

                  Distributions will not be paid if

 

                  ANZ does not comply with APRA’s guidelines

                  Total distributions are greater than distributable profits, or

                  APRA otherwise objects

 

                  If distributions are not paid, a ‘dividend stopper’ prevents ANZ from

 

                  Paying dividends, or

                  Returning capital,

on ordinary shares or any share capital ranking below ANZ StEPS

 

                  ANZ StEPS rank

 

                  In priority to ordinary shares

                  Pari passu with ANZ preference shares (including TrUEPrS)

 

16



 

Reset provisions

 

                  First reset date = 15 September 2008

 

                  Subsequent reset dates expected to be every 5 years

 

                  Terms that can be changed (subject to APRA approval) on reset dates

 

                  Next reset date

                  Market rate (from floating to fixed rate or vice versa)

                  Margin

                  Frequency and timing of distribution payment dates

 

17



 

Exchange by holder

 

                  Holders may require ANZ to exchange some or all of their ANZ StEPS on a reset date or trigger event

 

                  Key trigger events include

 

                  Non-payment of distributions (if payment tests satisfied)

                  Liquidation event

                  Acquisition event

                  ANZ StEPS or ordinary shares suspended from trading on ASX

                  Announcement of sale of substantially all of ANZ’s business

 

                  If holder requires exchange, at ANZ’s choice, holders will receive for each ANZ StEPS

 

                  Ordinary shares calculated in accordance with the conversion ratio, or

                  $100 cash (subject to APRA approval)

 

                  Conversion at 2.5% discount to the average of the 20 business day VWAPs prior to exchange

 

18



 

Exchange by ANZ

 

                  ANZ may require exchange of ANZ StEPS on

 

                  Acquisition event

                  Tax event

                  Regulatory event

                  Reset date

                  Aggregate amount on issue is less than $100m

 

                  If ANZ requires exchange, at ANZ’s choice, holders will receive for each ANZ StEPS

 

                  Ordinary shares calculated in accordance with the conversion ratio, or

                  $100 cash (subject to APRA approval)

 

                  Conversion at 2.5% discount to the average of the 20 business day VWAPs prior to exchange

 

19



 

Assignment events

 

                  If an assignment event occurs

 

                  Investors will continue to hold a preference share in ANZ, and

                  The note will be transferred to ANZ

 

                  Key assignment events include

 

                  Liquidation events

                  Non payment of distributions

                  APRA requirements

                  ANZ’s discretion

 

                  Preference share rights

 

                  Distributions paid at same rate as notes

                  Franked at the same rate as ordinary shares

                  Reset terms remain unchanged

                  Continue to be quoted on ASX

 

20



 

Today’s presentation

 

1. Offer summary

 

2. ANZ - Update on operations and strategy

 

3. ANZ - Effect of the issue

 

4. Offer structure

 

5. Bookbuild process

 

6. Supplementary information

 

21



 

Syndicate structure

 

 

 

[ANZ LOGO]

 

 

 

 

 

 

 

Joint Arrangers
& Bookrunners

 

[Deutsche Bank LOGO]

 

[UBS LOGO]

 

 

 

 

 

 

 

Joint Lead Managers

 

[ANZ Investment Bank LOGO]

 

[Deutsche Bank LOGO]

 

[UBS LOGO]

 

 

 

 

 

 

 

Co-managers

 

ABN AMRO Morgans

 

 

 

Deutsche Securities

 

 

ANZ Securities

 

 

 

Macquarie Equities

 

 

Bell Potter Securities

 

 

 

Ord Minnett

 

 

Citigroup Global Markets

 

 

 

UBS Private Clients

 

                  Institutional allocations can only be received from the Joint Lead Managers

 

22



 

Bookbuild process

 

                  An institutional and broker firm bookbuild will be conducted to determine the initial margin

 

                  Indicative bookbuild range of 100bps to 120bps over the 90 day bank bill rate

 

                  Bookbuild will close for co-managers and participating brokers

 

                  Through the Joint Arrangers only

                  At 10am on Tuesday 19 August

 

                  Bookbuild will close for institutions

 

                  Through the Joint Lead Managers

                  At 4pm on Wednesday 20 August

 

23



 

Indicative timetable

 

Announcement of offer

 

14 August

Bookbuild

 

19-20 August

Bookbuild close - co-managers

 

(10am) 19 August

Bookbuild close - institutions

 

(4pm) 20 August

Initial margin announced

 

21 August

Opening date

 

(9am) 22 August

Broker firm settlement date

 

16 September

Closing date

 

(5pm) 17 September

Institutional settlement date

 

23 September

Allotment date

 

24 September

Commence trading on a deferred settlement basis

 

25 September

Commence trading on a normal settlement basis

 

2 October

 

Dates are indicative only and may change. ANZ, ANZ (NZ) and the Joint Arrangers may extend the closing date or close the offer early without notice or withdraw the offer

 

24



 

Bookbuild contacts

 

                  ANZ Investment Bank

 

                  Joerg Koeppenkastrop                                                            +61 (2) 9226 6950

                  Angelos Giannakopoulos                                             +61 (3) 9273 1774

 

                  Deutsche Bank                                                                                                                                         

 

                  Paul Umbrazunas                                                                                         +61 (2) 9258 1306

                  Grant Bush                                                                                                                         +61 (2) 9258 2657

 

                  UBS

 

                  Guy Foster                                                                                                                          +61 (2) 9324 3603

                  Simon Maidment                                                                                           +61 (2) 9324 3948

 

25



 

Supplementary information pack

 

Australia and New Zealand Banking Group Limited

August 2003

 

[LOGO]

 

26



 

Outline

 

                  Strategy

 

                  Result review

 

                  Portfolio performance

 

                  Credit quality

 

27



 

Distinctive strategy and track record

Four clear themes going forward

 

Four core themes

 

              Leverage real capabilities to build sustainable strategic position

 

              Grow value by creating a rich portfolio of specialised businesses

 

              Become one of the most efficient and best-managed banks in the world

 

              Bold and different, leveraging a unique performance culture and business approach

 


*                 CBA, NAB, WBC

 

ANZ relative TSR

 

[CHART]

 

28



 

Leverage real capabilities to build sustainable strategic position

 

                  Leverage specialisation as a distinctive strategy

 

                  Leverage leading product capability to increase share

 

                  Leverage superior cost position

 

                  To give customers the best deal

                  To give shareholders sustainable and growing returns

 

                  Leverage ANZ’s emerging and distinctive “human face

 

                  Unique positioning against peers

                  Gain traction in earning the trust of the community

 

29



 

A rich portfolio of specialised businesses - material improvement in last 2 years

 

[CHART]

 

                  More sustainable portfolio foundation

                  Each business has clear differentiated approach

                  Systematically building capabilities to establish future growth options

 

30



 

Grow value by creating a rich and diversified portfolio of specialised businesses

 

[CHART]

 

Optimise portfolio for sustainability, growth and return

                  Raise revenue productivity in Personal Banking

                  Lift performance and productivity in Wealth Management

                  Develop sustainable post-interchange cards strategy

                  Regain position in Small Business

                  Develop Institutional while reducing risk concentrations

                  Leverage specialised distribution in Mortgages

                  Advance customer franchise in NZ through local approach

                  Turn Asset Finance into a sustainable growth proposition

 

Create a portfolio of growth options

                  Invest in high growth domestic franchises

                  Leverage capabilities with partners in Asia-Pacific

 

31



 

Aim to make ANZ one of the best managed and most efficient banks in the world

 

                  Make execution a distinctive capability

                  Accelerate revenue and productivity momentum in businesses

                  Rebalance higher risk segments

                  Simplify operations and technology infrastructure

 

World class efficiency

 

[CHART]

 

Lower relative risk

 

[CHART]

 

32



 

Bold and different, leveraging a unique performance culture and business approach

 

[CHART]

 

Coordination and control

 

[CHART]

 

Motivation

 

                  Systematic improvement

 

                  Aim to be distinctive

                  financial

                  values

 

                  Build on preferred employer status

 

                  Gain shareholder and community recognition

 

                  Raise our game in execution to minimise surprises

 


*                 Benchmark comprises 33 of Australia’s Top 50 companies

 

33



 

Continuing to develop our culture

 

High staff satisfaction maintained

 

[CHART]

 

Over 10,000 of our people have experienced Breakout program

 

[CHART]

 

34



 

Outline

 

                  Strategy

 

                  Result review

 

                  Portfolio performance

 

                  Credit quality

 

35



 

Result driven by asset & deposit growth, non-interest income impacted by one offs

 

[CHART]

 


*  Sep-02 excludes significant transactions

 

36



 

Higher interest income, driven by strong asset growth

 

Average Lending & Deposit Volumes

 

[CHART]

 


* Business Lending includes Corporate & Small Business, and Institutional Segments. Deposits includes Esanda retail debentures

 

Interest Margins

 

[CHART]

 

37



 

Underlying non-interest income reasonable, but dominated by one-offs

 

[CHART]

 


*  Sep-02 excludes significant items

 

#  higher loyalty costs reflects change in pricing, and does not include higher volume impact

 

38



 

Expenses well controlled, cost income ratio flat

 

[CHART]

 

                  Growth spend held back due to lower income growth

 

                  Underlying half on half cost growth of 1.4%

 

                  Includes $10m increase in software amortisation

 

                  Restructuring costs of $32m taken, in line with previous half

 

                  Continued focus on re-engineering “business as usual” costs

 

39



 

Provisioning charge reflects conservative management

 

ELP Charge

 

[CHART]

 

                  ELP rate down 3bps – reflecting strong mortgage growth & improved risk profile

 

                  ELP Portfolio adjustment continued

 

                  accruing higher level of ELP, reflecting ongoing global economic uncertainty

 

40



 

Dividend payout ratio likely to trend upwards

 

              A progressive lift in the payout ratio likely over next three years towards high 60’s

 

              Expect to maintain 100% franking

 

Interim Dividend has doubled in six years

 

[CHART]

 

41



 

Outline

 

                  Strategy

 

                  Result review

 

                  Portfolio performance

 

                  Credit quality

 

42



 

A diversified portfolio performing well

 

 

 

Mar 03

 

Mar 02

 

Change

 

Institutional Banking

 

145

 

119

 

22

%

Personal Banking

 

137

 

121

 

13

%

Mortgages

 

131

 

123

 

7

%

Transaction Services

 

84

 

76

 

11

%

SME

 

78

 

65

 

20

%

New Zealand

 

74

 

61

 

21

%

Asia Pacific

 

67

 

45

 

49

%

Asset Finance

 

60

 

48

 

25

%

Corporate Banking

 

55

 

55

 

0

%

Wealth Management

 

51

 

48

 

6

%

Treasury

 

49

 

63

 

-22

%

Consumer Finance

 

47

 

79

 

-41

%

Foreign Exchange

 

43

 

41

 

5

%

Corp Fin & Advisory

 

38

 

41

 

-7

%

Capital Markets

 

36

 

31

 

16

%

Structured Finance

 

36

 

40

 

-10

%

INGA JV*

 

21

 

n/a

 

n/a

 

 

1st half NPAT $m

 

[CHART]

 


* Excludes funding costs and goodwill amortisation

 

43



 

Consumer Finance – challenges, but good underlying performance

 

Improved underlying performance (NPBT)*

 

[CHART]

 

Diversifying revenue*

 

[CHART]

 

Growth in Acquiring share

 

[CHART]

 

Issues

 

                  Loyalty schemes increasingly costly to operate

                  Reduction in interchange and loyalty costs likely to impact 2004 NPAT by not more than $40m

 


* Adjusted for under-accrual of loyalty points

 

44



 

Mortgages – well placed to benefit from shift to mortgage brokers

 

Growing presence

 

And we are well placed to participate

 

 

Broker penetration of mortgage market

=>

Low cost income ratio – efficient processing platform