Washington, D.C. 20549


Report of Foreign Private Issuer


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


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-                  






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/ John Priestley




Company Secretary







Date 14 May 2004



* Print the name and title of the signing officer under his signature.





Media Release


Corporate Affairs

Level 22, 100 Queen Street
Melbourne Vic 3000
Facsimile 03 9273 4899


For Release: 22 April 2004


ANZ organises for growth with personal customers


ANZ today announced Mr Brian Hartzer will become Group Managing Director Personal Banking, to head a new division, which clusters all of ANZ’s specialised businesses primarily serving personal customers in Australia.


Mr Elmer Funke Kupper will become Group Managing Director Asia-Pacific and will oversee our diverse geographic activities across the Asia-Pacific region.


The divisional clusters are designed to accelerate organic growth and build market share.  This is based on harnessing synergies between specialist businesses to broaden and deepen the offering to customers, while maintaining the integrity and vitality of ANZ’s specialisation model.


The move completes a program of clustering specialist businesses around customer segments.  ANZ’s Institutional, Corporate and New Zealand businesses have already adopted this approach.


                  Personal.  Businesses that primarily serve retail customers in Australia.  It comprises Personal and Wealth Distribution, Mortgages, Credit Cards, Merchant Services, Banking Products and Rural Banking.  Mr Brian Hartzer, formerly Managing Director Consumer Finance, will head the division.  Mr Greg Camm, formerly Managing Director ANZ New Zealand, will become Managing Director Personal and Wealth Distribution, reporting to Mr Hartzer.  He replaces Mr Satyendra Chelvendra (Chelvi), who is joining Group Development to focus on new retail growth initiatives, reporting to Mr Peter Hawkins.


                  Institutional.  Businesses that primarily serve major corporate and institutional customers.  It comprises Institutional Banking, Trade and Transaction Services, Foreign Exchange, Capital Markets, and Corporate and Structured Finance.  Institutional has responsibility for these segments worldwide, with direct responsibility for ANZ’s activities in Europe and North America, and with matrix responsibility for businesses in New Zealand and Asia-Pacific.  Mr Steve Targett has been appointed Group Managing Director Institutional and is in the process of joining ANZ from Lloyds TSB plc where he is an executive director.


                  Corporate.  Businesses that serve corporate and small business customers in Australia.  It comprises Corporate Banking and Business Banking, which now includes small to medium enterprises previously part of Personal Banking.  Mr Graham Hodges becomes Group Managing Director Corporate, with this enhancement of his current responsibilities.


                  New Zealand.  Businesses in New Zealand under Sir John Anderson, Managing Director of ANZ New Zealand, and Chief Executive of The National Bank of New Zealand.


                  Asia-Pacific.  A new division that brings group level focus to ANZ’s diverse and geographically spread businesses and customers across the region, headed by Mr Funke Kupper, who was previously Managing Director Personal Banking and Wealth Management Australia.


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




These divisional executives will report to the Chief Executive Officer and the Chief Operating Officer, along with Esanda, ING Australia and Private Banking, a new high growth specialist business headed by Mr Michael Saadie, Managing Director Private Banking.


ANZ Chief Executive Officer Mr John McFarlane said:  “Our unique specialisation approach and culture have provided focus and vitality.  ANZ is now a very different bank.


“Retail banking has never been a traditional strength for ANZ, but we are beginning to show real progress and the retail businesses are performing well.


“In recent years we have developed successful specialist consumer businesses in mortgages and cards.  In retail banking, we have improved customer and staff satisfaction and advocacy.  We now have some of the leading transaction and deposit products in the sector.  Our approach to distribution has been innovative, and we have substantially invested in people, training, branch premises and telling systems.


“However, we remain substantially under-represented in this segment, and now need to take it to the next level and advance our position across the personal segment as a whole, while leveraging the success we have had in selected segments such as Consumer Finance.  We have already seen the clustering model work very successfully in our Institutional and Corporate divisions and in The National Bank of New Zealand.


“We now have the foundation for the next step in our corporate evolution.  Our new structure takes the strong foundation and energy of our specialist businesses and puts our customers first,” Mr McFarlane said.


The changes are effective 1 May 2004.



For media enquiries contact:

For analyst enquiries contact:



Paul Edwards

Simon Fraser

Head of Media Relations

Head of Investor Relations

Tel:  03-9273 6955 or 0409-655 550

Tel:  03-9273 4185 or 0412-823 721






ANZ Business Divisions 2004






ANZ Specialist Business Structure 2004







ANZ Group Management Structure 2004





Company Secretary’s Office
Level 6, 100 Queen Street
Melbourne, VIC 3000
Phone 03 9273 6141
Fax 03 9273 6142



30 April 2004



The Manager

Company Announcements

Australian Stock Exchange

Level 10, 20 Bond Street

SYDNEY  NSW   2000


ANZ Interim Dividend 2004


Australia and New Zealand Banking Group Limited advises that the following dates will apply for its interim dividend payment in 2004.


Ex dividend date

14 May 2004

Record date

20 May 2004

Interim dividend payment date

1 July 2004



John Priestley

Company Secretary





Rule 2.7, 3.10.3, 3.10.4, 3.10.5


Appendix 3B


New issue announcement,
application for quotation of additional securities
and agreement


Information or documents not available now must be given to ASX as soon as available.  Information and documents given to ASX become ASX’s property and may be made public.


Introduced 1/7/96.  Origin: Appendix 5.  Amended 1/7/98, 1/9/99, 1/7/2000, 30/9/2001, 11/3/2002.


Name of entity




11 005 357 522


We (the entity) give ASX the following information.


Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).



+Class of +securities issued or to be issued


Ordinary Shares






Number of +securities issued or to be issued (if known) or maximum number which may be issued








Principal terms of the +securities
(eg, if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)


306,433 Fully Paid Shares


Do the +securities rank equally in all respects from the date of allotment with an existing +class of quoted +securities?


Yes, pari passu with existing ordinary shares






If the additional securities do not rank equally, please state:




                  the date from which they do




                  the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment




                  the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment




+ See chapter 19 for defined terms.





Issue price or consideration




at Nil consideration






at $10.48 each






at $11.09 each






at $12.98 each






at $13.91 each






at $14.20 each






at $14.61 each






at $16.33 each






at $17.34 each






at $17.55 each






at $17.60 each






at $18.03 each






at $18.55 each








Purpose of the issue
(If issued as consideration for the acquisition of assets, clearly identify those assets)


306,433 shares issued on exercise of options.








Dates of entering +securities into uncertificated holdings or despatch of certificates




01 April 2004




05 April 2004




06 April 2004






07 April 2004






08 April 2004






13 April 2004






14 April 2004






16 April 2004






19 April 2004






20 April 2004






21 April 2004






22 April 2004






23 April 2004






26 April 2004






27 April 2004






28 April 2004






29 April 2004






30 April 2004














Number and +class of all +securities quoted on ASX (including the securities in clause 2 if applicable)




Ordinary fully paid












2003 ANZ Stapled Exchangeable Preferred Securities














Number and +class of all +securities not quoted on ASX (including the securities in clause 2 if applicable)




Options on issue












2003 Redeemable Preference Shares.












2003 Redeemable Preference Shares (Series 2).








Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)


Same as existing fully paid ordinary shares.




Part 2 - Bonus issue or pro rata issue



Is security holder approval required?






Is the issue renounceable or non-renounceable?






Ratio in which the +securities will be offered






+Class of +securities to which the offer relates






+Record date to determine entitlements






Will holdings on different registers (or subregisters) be aggregated for calculating entitlements?






Policy for deciding entitlements in relation to fractions






Names of countries in which the entity has +security holders who will not be sent new issue documents






Note: Security holders must be told how their entitlements are to be dealt with.






Cross reference: rule 7.7.






Closing date for receipt of acceptances or renunciations






Names of any underwriters






Amount of any underwriting fee or commission






Names of any brokers to the issue






Fee or commission payable to the broker to the issue






Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of +security holders






If the issue is contingent on +security holders’ approval, the date of the meeting






Date entitlement and acceptance form and prospectus or Product Disclosure Statement will be sent to persons entitled



+ See chapter 19 for defined terms.





If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders






Date rights trading will begin (if applicable)






Date rights trading will end (if applicable)






How do +security holders sell their entitlements in full through a broker?






How do +security holders sell part of their entitlements through a broker and accept for the balance?






How do +security holders dispose of their entitlements (except by sale through a broker)?






+Despatch date



Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities


34                          Type of securities
(tick one)


(a)                           ý                                    Securities described in Part 1


(b)                          o                                    All other securities

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities


Entities that have ticked box 34(a)


Additional securities forming a new class of securities

(If the additional securities do not form a new class, go to 43)


to indicate you are providing the [ILLEGIBLE] or documents


35                               o                                    If the +securities are +equity securities, the names of the 20 largest holders of the additional +securities, and the number and percentage of additional +securities held by those holders


36                               o                                    If the +securities are +equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over


37                               o                                    A copy of any trust deed for the additional +securities




(now go to 43)


Entities that have ticked box 34(b)






Number of securities for which +quotation is sought






Class of +securities for which quotation is sought






Do the +securities rank equally in all respects from the date of allotment with an existing +class of quoted +securities?






If the additional securities do not rank equally, please state:

                  the date from which they do

                  the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment

                  the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment






Reason for request for quotation now






Example: In the case of restricted securities, end of restriction period






(if issued upon conversion of another security, clearly identify that other security)









+ Class


Number and +class of all +securities quoted on ASX (including the securities in clause 38)





(now go to 43)





All entities Fees





43                                    Payment method (tick one)


o                                    Cheque attached


o                                    Electronic payment made


Note: Payment may be made electronically if Appendix 3B is given to ASX electronically at the same time.


ý                                    Periodic payment as agreed with the home branch has been arranged


Note:  Arrangements can be made for employee incentive schemes that involve frequent issues of securities.


Quotation agreement


+ See chapter 19 for defined terms.




1                                         +Quotation of our additional +securities is in ASX’s absolute discretion.  ASX may quote the +securities on any conditions it decides.


2                                         We warrant the following to ASX.


                                          The issue of the +securities to be quoted complies with the law and is not for an illegal purpose.


                                          There is no reason why those +securities should not be granted +quotation.


                                          An offer of the +securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.


Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty


                                          Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any +securities to be quoted and that no-one has any right to return any +securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the +securities be quoted.


                                          We warrant that if confirmation is required under section 1017F of the Corporations Act in relation to the +securities to be quoted, it has been provided at the time that we request that the +securities be quoted.


                                          If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the +securities be quoted.


3                                         We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.


4                                         We give ASX the information and documents required by this form.  If any information or document not available now, will give it to ASX before +quotation of the +securities begins.  We acknowledge that ASX is relying on the information and documents.  We warrant that they are (will be) true and complete.



Sign here:


Date: 04 May 2004










Print name:

John Priestley





Australia and New Zealand Banking Group Limited
Level 6, 100 Queen Street
Melbourne, VIC 3000
Phone 61 3 9273 4310
Fax 61 3 9273 0552


7 May 2004



Company Announcements

Australian Stock Exchange

Level 10, 20 Bond Street




Appendix 3Y – Increase in shareholding: John McFarlane


The attached Appendix 3Y notice discloses Mr McFarlane’s total holdings of ANZ shares has increased by 82,388 shares from 1,499,965 to 1,582,353 shares.


The increase in Mr McFarlane’s shareholding follows the purchase of 82,388 shares on 4 May 2004 through the ANZ Director’s Share Plan at an average price of approximately $18.6357.



Yours faithfully



John Priestley

Company Secretary




Appendix 3Y

Change of Director’s Interest Notice


Name of entity

Australia and New Zealand Banking Group Limited


11 005 357 522


Australia and New Zealand Banking Group Limited gives ASX the following information under listing rule 3.19A.2 and as agent for the director for the purposes of section 205G of the Corporations Act.


Name of Director

Mr John McFarlane

Date of last Notice

17 February 2004


Part 1 – Change of director’s relevant interest in securities


Ordinary Shares:



Direct interest






Indirect interest












Nature of indirect interest


Number & Class of Securities




                  Bank of New York (as nominee for Self Invested Personal Pension Scheme)


ordinary shares










                  ANZEST Pty Ltd






•     ANZ Employee Share Acquisition Plan (ESAP)


ordinary shares




•     ANZ Directors’ Share Plan (DSP)


ordinary shares










No of securities held prior to change






Date of change


04 May 2004






Ordinary shares




Number acquired (Indirect)












ANZ Directors’ Share Plan (DSP)


ordinary shares




Number disposed of (Direct)






Nature of Change


On market trades










Number of securities held after change






Direct Interest – Unchanged






Indirect Interest – Increased (by 82,388)






Total of Interest







Options over unissued ordinary shares:


Direct Interest






Indirect Interest






No of securities held prior to change






Date of change












Number acquired – Direct Interest






Number disposed of









Nature of Change












Number of securities held after change






Direct Interest – Unchanged






Indirect Interest – Unchanged






Total of Interest







Part 2 – Change of director’s interests in contracts - Nil





John Priestley

Company Secretary

Australia and New Zealand Banking Group Limited


07 May 2004





Media Release

Corporate Affairs
Level 22, 100 Queen Street
Melbourne Vic 3000
Facsimile 03 9273 4899



For Release: 10 May 2004


ANZ receives RBNZ agreement for amalgamation


ANZ today announced it had received written advice from the Reserve Bank of New Zealand confirming its forthcoming consent for legal amalgamation of ANZ New Zealand and The National Bank of New Zealand (NBNZ).


The Reserve Bank of New Zealand’s formal consent involves the issue of a new banking license to ANZ National Bank Limited, which the Reserve Bank has advised will be provided on or just prior to legal amalgamation.  Legal amalgamation, which is expected to occur at the end of June 2004, is a formal step required before integration of the two businesses can commence.  ANZ’s strategy remains to run the ANZ and NBNZ brands and branch networks separately.


The Reserve Bank of New Zealand’s consent will be subject to a number of formal undertakings made by ANZ.  These include:


                  Ensuring the primacy of the New Zealand board of directors in overseeing management of the bank and ensuring staff have primary responsibility to the New Zealand managing director and board of the bank.

                  Location and operation of the bank’s domestic systems in New Zealand and with the New Zealand board having the practical ability to control the management and operation of domestic and other systems on a standalone basis in the event of a crisis.


ANZ Chief Executive Officer Mr John McFarlane said: “We have had a constructive dialogue with the Reserve Bank of New Zealand over recent months in order to meet both the regulator’s requirements and our business needs.


“Integration is on track.  Last month, we confirmed revenue synergies have been upgraded while cost synergies are in line with those disclosed in the rights issue prospectus with newly identified cost synergies being offset by some increased processing costs in New Zealand.


“We have an outstanding leadership team in New Zealand led by Sir John Anderson.  Our integration plan delivers on our commitment for the New Zealand business to be managed and staffed locally and associated closely with the community in New Zealand, while at the same time having the benefits of being a close family member of the ANZ Group,” Mr McFarlane said.


For media enquiries contact:


Paul Edwards

In New Zealand:

Head of Group Media Relations


Tel: +61-3-92736955 or +61-409-655 550

Cynthia Brophy


General Manager Corporate Affairs, NBNZ


Tel: +64-4-802 2382 or +64-21-832 500




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




2004 May Roadshow


Australia and New Zealand Banking Group Limited


May 2004





Table of contents



ANZ 2004 Interim Results






NBNZ Update



Result Review



Business Performance



Credit Quality



Other Financial Issues



Issues Raised post Results







ANZ 2004 Interim Results




ANZ Interim Results Summary






v Mar 03


v Sept 03






















•  Headline











       Excluding significant transactions


































76.8 cents








Cash EPS(1)


78.9 cents








Dividend fully franked(2)


47 cents









(1)   EPS excluding significant transactions and goodwill amortisation

(2)   March 03 dividend of 44c adjusted for bonus element of rights issue (@0.9597)

(3)   Excludes significant items, NBNZ and adjusts base for TrUEPrS swap




ANZ now has a strong foundation


Successful specialist business model


                  Model now enhanced by clustering around customers;

                  Personal - Key driver of future growth

                  Institutional - A leading business with lower risk

                  Corporate - Strong organic growth


Risk reduced and sustainability improved


                  Credit concentrations almost to optimal levels

                  International risk exposure contained

                  Business mix now more domestic and sustainable

                  Trading risk modest


NBNZ acquisition brings New Zealand leadership


                  NBNZ acquisition cash EPS accretive

                  Two-phase implementation plan

                  Integration and cost synergies are on track

                  Revenue attrition better than expected

                  Customer numbers are now growing











ANZ systematically optimises variables to create value





After six years of risk reduction we are now approaching optimal levels



*excludes significant and abnormal items


# Average daily Value at Risk at 97.5% confidence interval




Our strategy is to grow sustainable earnings at low volatility


              NZ makes our earnings less volatile

              Although NZ alone is more volatile than group, diversification results in NZ creating lower overall volatility at a group level



              Wealth management’s susceptibility to globalisation and rapid fade likely to impact future returns

              Wealth management earnings are more volatile than banking

              Global scale base is important to develop systems, platforms, and brands

              The ING JV delivers a sustainable position with scale, with low volatility to ANZ, particularly with equity risk hedged



*as measured by one standard deviation from mean half yearly profit growth (or exchange rate movement) over past 10 years


# Wealth management includes listed wealth management companies and WM operations of major banks, and excludes AV uplift and goodwill




We have transformed ANZ into a more sustainable, lower risk business


Reduction in risk and movement towards domestic consumer businesses


Has significantly reduced earnings volatility


And has not had a material impact on earnings



* Standard deviation in six monthly NPAT growth for ANZ, excluding abnormal/significant items




Value of focus and specialisation


Specialisation and focus yields better return than generalisation from the perspective of individual challenges and tasks, as this Olympic example demonstrates



Average out-performance 23%




The Specialists


The Generalists


“Specialist Premium”




9.87 s


10.68 s




110m Hurdle


13.00 s


14.48 s






42.84 s


46.71 s






3 m 32.07 s


4 m 29.48 s






69.3 m


43.66 m






21.29 m


15.11 m




Long Jump


8.55 m


7.76 m




High Jump


2.35 m


2.00 m




Pole Vault


5.90 m


5.00 m







Coherence already achieved in Institutional by clustering businesses…


              Businesses established as distinct units to unleash energy & innovation


              In 2002, businesses brought together under Institutional


              Very high levels of cross sell achieved, with deep engagement with the customer


              Low reliance on trading income





…as it has been in both our Corporate and New Zealand businesses…






…now our focus is on building coherence with personal customers


              Retail not a traditional strength for ANZ. Creation of specialist businesses necessary:


              brought focus to this area

              unleashed energy and innovation

              prevented smaller network constraining growth through third-party and specialist distribution


              Product businesses have grown strongly and achieved scale


              Businesses now have sufficient strength and momentum that synergies and growth are possible, but coherence against customer now vital





ANZ Group Structure 2004




ANZ Specialist Business Structure 2004







ANZ has successfully mastered each stage from performance through to specialisation.  Focus now on coherence, growth and sustainability







A solid result with good foundation and prospects


We remain confident about our prospects for the year as a whole


                  Solid first half, clean result


                  Accretive New Zealand acquisition. Market leadership in all segments. Integration and synergies on track


                  Business mix inherently domestic, more sustainable


                  Economic environment positive with global upturn. Housing and consumer segments softer, institutional, corporate and SME stronger


                  Risk radically reduced towards optimal


                  ANZ’s execution capability a strength


                  Businesses now clustered around customers for revenue enhancement with emphasis on growth






NBNZ Update




A low risk approach to NBNZ integration


Phase one: quick wins

                  RBNZ approval expected early May

                  Legal amalgamation into ANZ National, targeted for 30 June 2004

                  Maintain both brands to enhance customer retention

                  Rapidly integrate activities that are not systems dependent

                  Idea sharing already begun for franchise growth


Phase two: full integration

                  Full plans already submitted to RBNZ. Discussions well progressed

                  Systems strategy:

                  Domestic – NZ stand-alone

                  International – Group systems

                  Common systems suite in both Australia and New Zealand

                  Full systems integration expected by end 2005




Net customer acquisition rebounding well


NBNZ Personal


                  acquisition of customers continues to rebound from 2003, and continues to be a net acquirer


ANZ Personal


                  net outflow continues, but at a much lower level in March compared to February 2004 and March 2003


NBNZ Business & Rural


                  net acquisitions remain positive, however down on year earlier levels


ANZ Business & Rural


                  net outflow continues but at a substantially reduced rate compared to twelve months prior


ANZ Corporate


                  maintains a net inflow



* 3 month moving average removes impact of monthly volatility




Current integration plans project a positive outcome from 2006



              Cost synergies in line with business case, however newly identified synergies offset by increased processing costs in NZ


              Revenue attrition improved modestly on business case


              Revenue synergies substantially upgraded from business case


              Integration costs $230m


        ~10% will be met by restructuring charge included in the calculation of goodwill

        ~10% relates to equipment that will be capitalised

        ~10%-15% relates to the cost of existing resources



*Synergies are based on percentage of 2007 benefits




Integration timetable*



*selected business units






Results Review




A good underlying result, driven by strong income growth and improved credit quality



* Reflects StEPS being reinvested in AUD whereas TrUEPrS was invested in USD

# Reflects loss of earnings on TrUEPrS hedge




NBNZ acquisition and TrUEPrS-related significant transactions further increased profit



NBNZ Earnings (NZD)*


4 months


Pro Forma








Non Interest






Operating Income












Profit before debt provisions












Profit before tax



















Significant transactions




Swap Income & interest




Tax expense




P&L Impact








Cash Dividend (EPS impact only)





* excludes integration costs




Strong balance sheet growth across most businesses…


              End of period lending assets grew by $41.4b (25%) for the half.  Excluding NBNZ, lending grew $8.8b (5%)


              Excluding NBNZ, growth was largely in Mortgages $6.8b (10%) and Corporate $1.7b (11%) for the half, reflecting favourable market conditions for both businesses



              End of period deposits increased to $128.4b (29%) for the half. Excluding NBNZ deposits volumes grew to $104.9b (5%)


              Strong growth was seen across the board, with Personal Banking & Wealth up $1.7b (5.3%), Institutional up $1.5b (5.8%), and Corporate up $0.7b (5.5%)



*Other deposits include Esanda retail debentures




…partly offset by margin pressure, particularly in 2nd quarter




             Mortgage margins were down 12bp over the half, driven principally by the cyclical impact of wholesale rates moving up ahead of the cash rate during the half


             Average spread between Cash rate and rolling 30 day rate: Jun-03 6bp, Sep-03 6bp, Dec-03 8bp, Mar-04 21bp


             Mortgage broker costs accounted for just 1.5bp of the 12bp mortgage margin decline





Growth in underlying non-interest income reflects volume growth





Expenses well controlled, providing scope for re-investment


Underlying operating expenses increased by 2.8% over the half. Key drivers were:


             Operating costs were up 4% in Personal Banking as a result of increased staff training, the cost of rolling out the new telling platform, and increased depreciation resulting from further investment in technology and branch refurbishments


             SME expenses up 8% over the half, reflecting substantial investment in this business as we expand the footprint


             Volume related costs in the mortgages business drove expenses up 8% over the half



The cost to income ratio remains comfortably within our stated target range of “mid 40’s”.


             Both the NBNZ acquisition and TrUEPrS redemption impacted the ratio in the half


             The ratio was also impacted by investment in the franchise in the first half



*includes Acquisition, Funding & Integration Costs




Doubtful Debts Provision reflects improved underlying portfolio


             Standard ELP charge (as a % of average lending assets) has remained stable at 31bps (32bps September 2003)


             inclusion of higher quality NBNZ portfolio reduces ELP rate by ~1bp


             reduction in headline ELP charge due to 4bps reduction in ELP central adjustment


             ELP top up is being unwound in line with the improved credit quality of the offshore lending book, driven by the de-risking strategy







Business Performance




Our consumer and corporate businesses were the key driver of underlying profit growth, offsetting de-risking impact in IFS




PCP Growth


Key Drivers

Consumer Businesses








•   Personal Banking Australia up 13% due to growth in consumer deposits, lending and sales commissions

             Consumer Finance up 39%* due to strong customer growth and turnover in the merchant business

             ING JV up 18%









*after adjusting for cards under accrual in 1H03










Institutional Financial Services









             Fall in NPAT reflects de-risking within the lending portfolio and the impact of the appreciation of the AUD on USD earnings



















             Strong lending growth in both Corporate and SME driving profit

             Revenue offset by the cost of expanding the geographic footprint in SME franchise











New Zealand Business








             Strong lending growth in NBNZ offset reduced volumes in Corporate & Institutional

•   ANZ (NZ) down largely due to margin pressure and continued investment in the franchise




















             11% growth in Esanda resulting from buoyant new car market and efficiency gains

•   4% contractions in both Asia Pacific and Treasury driven by exchange and interest rate environments respectively




We now have a strong position in the domestic consumer market


We now have a combined retail customer base across Australia & New Zealand of approximately 5.1m customers


             We have a scale position


             Following the NBNZ integration, all retail customers will be on a Hogan platform


             Relative market shares indicate the capacity to derive profit from retail banking


Retail Market Share in Australia & New Zealand*



* source: ANZ - weighted average of Australian and New Zealand market shares, based on Roy Morgan data in Australia (share of traditional banking) and ACNeilson data in NZ (share of main bank customers)




Our Australian consumer businesses have improved their position


In 2002, we set out to revitalise our branch network, with the aim of growing our market share and our share of wallet


             We have grown market share by more than each of our peers. Specialisation has helped with this.


             We have grown our share of wallet, but remain well below peers. Clustering of consumer businesses will help grow share of wallet going forward




Source – Roy Morgan Research


*traditional consumer banking is defined as transactions, deposits, personal/other loans, mortgages and credit cards, rolling 12 months. Peers include CBA, NAB, WBC




Personal Banking Australia: strong foundation delivering results


A continued commitment to investing in our franchise has seen strong growth in the half with NPAT up 8%. The result was built upon:


             Strong revenue growth up 5% on the half driven by robust deposits growth up 5%, solid growth in Rural lending up 8%, and continued growth in our margin lending business up 39%.

             Net interest margin increased 4bps following increases in the cash rate, but was partly offset by growth in lower margin deposits

             Increase in non interest income reflecting 4% growth in sales and retention payments received from sale of ANZ products.

             Expenses increased 4% largely due to our continued investment in the franchise, including:

             Continued investment in sales training

             The successful roll out of the new telling platform to the entire branch network

             Ongoing commitment to branch refurbishments and improving the risk profile of our branch network.

             Opening of four new branches in the half


The investment in our franchise is delivering results



*Peers include CBA, NAB, WBC




Consumer Finance: interchange impact well managed; offset by growth initiatives


Strong profit growth, up 9% for the half driven by:


             Well managed changes to credit card programs following Interchange Reform

             Significant reduction in loyalty expense following the restructuring of our product suite

             Customer attrition minimised; concentrated in high transacting customers

             Leading loyalty product – ANZ Frequent Flyer (“AFF”) - remains attractive

             Majority (52%) of customers not impacted

             Only Big 4 Bank still offering $1 spend to earn 1 QFF point on standard and Gold VISA/MasterCards

             New products/services– Diners; Low Rate MasterCard - have been successful; on-line Personal loan approval

             Strong growth in the merchant customer base with 6% increase in the half year

             Increased merchant turnover over the Christmas period

             Strong expense control: up 1% on prior half







Mortgages: strong volume growth more than offset by interest rate environment


NPAT reduced 7% for the half despite continued strong volume growth, key drivers included:


             A 10% increase in mortgage volumes during the half resulting from record sales volumes being written through all key channels was offset by a 12 basis point reduction in margin due to higher funding costs following two interest rate increases.


             Sales and retention commissions paid to personal Banking increased due to growth in sales through the branch network


             Operating expenses increased 8% largely driven by volume growth, along with costs associated with the business investing for the future


In the half the Mortgages business has significantly improved customer and staff satisfaction, maintained product leadership in Cannex Awards (independent mortgage analysts), and continued to focus on channel diversity, including development of the ANZ Mortgage Solutions franchises


Cannex Product Awards March 2004



Margin impact on NPAT substantial






IFS: subdued result driven by focus upon de-risking


The IFS profit was adversely affected by revenue constraints imposed by the de-risking strategy, and the strength of the AUD affecting offshore earnings. Positive aspects of the result include:


              Specific provision charge has decreased A$32m (34%) to A$62m for the half, reflecting the improving quality of the portfolio and AUD appreciation


              Continued underlying cost discipline was evident across the business with operating expenses up 3% for the half, largely attributable to increased pension costs in the UK and increasing our FX and Capital Markets capabilities in the UK and Asia.


              Maintained our leading domestic market position


              IFS offshore lending reduced by 47% since September 2001.  At March 2004 IFS offshore lending comprise ~ 3% of Group balance sheet


NPAT composition shifted towards less volatile and more sustainable earnings





*End of period NLA’s




Corporate: continued strong growth and investment in the business


Continued growth in Corporate NPAT with the half year result up 5%, key highlights include:


Corporate Banking Australia


              4% revenue growth driven by growth in average lending volumes of 10%, coupled with solid growth in average deposit volumes of 8%


              Wall St to Main St activity increased, with revenue from these deals up over 50% in the half


              46% of total profit generated from Corporate customers is recorded in other business units results


              Operating expenses were up 4% as we invested for growth, including increased frontline FTE


              Net specific provisions down significantly from 2H03.


Small to Medium Enterprises Australia


              7% revenue growth driven by 14% average lending growth, and 9% increase in average deposit volumes


              Continued growth reflecting effective investment in the business and a focus on delivering a superior customer proposition, including;


              expanding our geographic business footprint: frontline FTE up ~ 200 in last two years


              more FTE committed to industry specialisation


              effective use of 3rd party originated loans to ensure full capacity utilization of relationship teams and continuing introduction of quality customers to ANZ


              Operating expenses up 8% reflecting the above mentioned investments and on-going business infrastructure


              Sound credit quality, which is closely monitored


Strong, low risk lending growth



*Non accrual loans as % of net loans and advances





Esanda: operational excellence and improved business economics, partly offset by margins pressure


Esanda’s profit grew 3% for the half, key drivers and initiatives included;


Operational excellence and improved economics


             Esanda has made substantial progress in improving the efficiency of its business

             Expenses continue to be well managed, CTI down to 40%

             Other operating income increased by 9% due mainly to changes in the fee structure for business lending

             Our Australian debenture portfolio grew by 5% in 1H04, reaching $7b

             Signed an alliance with Pratt Water, allowing Esanda to provide funding for irrigators seeking to convert to water saving drip and sprinkler irrigation – valued at $10m per year for 10 years

             Strong growth in the equipment leasing segment in particular in IT and mining equipment


Interest Margin


             Net Interest Margin declined by 4 basis points due to run off of higher yielding loans during the half


Branding & Advertising


             Esanda promoted as easy to deal with, progressive and forward thinking

             New ad campaign launched in March 2004 to position Esanda = Car Finance

             3 year sponsorship deal agreed with Wheels Magazine ‘Car of The Year’






Pacific & Personal Banking Asia: a strong franchise adversely affected by strengthening AUD


Solid underlying NPAT performance up 3% (pre exchange rates) reflective of our strength in the region:


              ANZ holds either number 1 or 2 market position in all the Pacific markets in which we operate


              The Pacific’s income is dominated by our Fiji and PNG businesses.


              Notwithstanding our dominant position growth opportunities remain in existing and new markets


              Our centralised Pacific processing hub in Fiji, ‘Quest’, continues to develop its capacity and provision of services to the region.



The strengthening AUD reduced NPAT by $A4m over the half, key drivers included:


              Panin has strong momentum in Indonesia.


              Solid growth in Personal Banking Asia due to strong focus on customers requiring Australia and New Zealand related transactions.


              Strong NPAT growth in PNG due to increase in foreign exchange earnings


              Fiji earnings adversely affected by the suspension of forward foreign exchange trading by the Reserve Bank of Fiji





ANZ New Zealand (ex NBNZ): result affected by inclusion of mortgage business, margin pressure and exchange rates


ANZ (NZ) result was adversely affected by reduced net interest income from mortgages business (mortgage business included for the first time which was previously reported in ANZ’s specialist Mortgages business) and exchange rates.


As a result, NPAT was down 3% for the half, however excluding Mortgages, NPAT increased 1%


             Personal - strong growth in deposit FUM offset by a decline in fee income, due partly to the removal of non-ANZ ATM fee for NBNZ customers, and lower punitive fee income. The half also saw continued re-investment in the franchise, with the opening of two branches and increased spend on brand image. This increased investment offset net interest income growth of 2% resulting in a flat profit for Personal in the half.


             Mortgages – after several halves of stable margins, an adverse yield curve in the current half resulted in a 13bp margin contraction in the mortgages business, more than offsetting the good volume growth.


             Other – solid performance principally from Corporate, driven largely by strong interest income from robust lending and deposit growth and growth in fee income



*includes Business, Rural and Corporate Banking





ING JV benefits from markets upturn


NPAT increased 5% over the half driven by:

             Higher fee income arising from growth in funds under management (“FUM”)

             Higher capital investment earnings, up 7% due to strong equity markets and rising interest rates. These were partially offset by ANZ’s capital hedge losses.

             Costs remained flat due to tight expense control

INGA maintained its number four Retail FUM position as measured by ASSIRT

Most recent review of valuation model and assumptions performed by Ernst & Young at September 2003 confirmed current carrying value.

Valuation will be performed at least once a year and more often if there is a significant change in circumstances that is likely to impact the value


Current JV Valuation










ANZ Contribution to JV








Equalisation payment








Unrecognised profit on sale of ANZ FM








Equity accounted profit since inception








Carrying value ay Mar-04











Credit Quality




Quality of Consumer & SME portfolios again better than expected


             Mortgage delinquencies (60 days) improved over the half


             Delinquency for customers new to SME since September 2002 is in line with delinquency on legacy SME portfolio


             Strong economic conditions and prudent credit practices have continued to see our Retail delinquency and loss rates remain very low



             Delinquency for Mortgage products have flattened over the half


             delinquencies on RILs and Broker introduced loans have remained in line with the wider portfolio


             Australia’s low unemployment rate should continue to help maintain the quality of the portfolio




TPMI – third party mortgage introducers

O/O – owner occupied


*Excludes NBNZ




Mortgages portfolio remains sound


             Mortgages Portfolio continues to experience strong growth.

             ANZ “Lo Doc” policy requires a maximum LVR of 60%, maximum loan size $450k and is only available for standard residential and minimum credit standards.







Low exposure to Inner City residential mortgage lending


Inner City


             Total Lending for inner city property at 3.7% of Australian Mortgages portfolio, with 2.1% for investment purposes.  Tight policies to control emerging risks include:

             valuations required on all new properties

             rental income allowable in debt servicing calculation 60%

             non-inclusion of negative gearing benefit in serviceability calculation for first time investors

             inner city is broadly defined, and extends well beyond CBD


             Exposure to Melbourne Docklands area ~0.06% of the Australian mortgages portfolio, or <2% of the inner city lending portfolio



             only 19 customers nationally with arrears >90 days

             no delinquencies in the Melbourne Docklands book


Mortgages Australia



Location of inner city lending



OO – Owner Occupied

RIL – Residential Investment Loan




Offshore power exposure reducing, with markets showing signs of improvement


Total Limits Split by Geography




              ANZ’s exposure to offshore Power companies has reduced by 23% in the past six months, with the portfolio becoming increasingly Australasian-centric.  Domestic markets will continue to be buoyed by traditional non-diversified, regulated, investor-owned businesses.


              Furthermore, KMV Median Expected Default Frequencies indicate that offshore power markets are recovering.  Credit quality erosion is now abating, with the liquidity crunch faced by merchant energy companies in 2002/03 from the backlog of debt rescheduling now largely alleviated.




US power exposures continue to reduce, although lagged credit effects continue to affect the portfolio


Total US Limits(1)



US: March 2004


             Outstandings: $0.6bn (70%)

             Other Committed: $0.2bn (25%)

             Uncommitted: $0.1bn (5%)




             Investment Grade: 10

             Non Accrual:  4

             Total:  19


             We continue to actively manage our exposure to the US Energy sector.

             Over the past 18 months, exposure to the merchant energy sector and other non-core segments has reduced substantially through repayments, sell-downs and restructuring.

             Whilst Non Accrual Loans have increased in the US portfolio as a result of the lagged credit effect, prudent management has resulted in a lower level of expected losses from the portfolio.  Any further losses can be readily absorbed within existing ELP levels.


(1)           Excludes Settlement Limits but includes Contingent and Market-Related products domiciled in the US.




The quality of the Telcos book continues to improve


Total Telcos Limits(1)



March 2004


             Outstandings: $1.69bn (49%)

             Other Committed: $1.01bn (29%)

             Uncommitted: $0.78bn (22%)


KMV Median Expected Default Frequency





(1)        Excludes Settlement Limits but includes Contingent and Market-Related products.




Specific provisions down 27% on 2H03 – no large single provisions


Specific Provisions



1H04 Specific Provisions by size





New Specific Provisions down 16% on 2H03


Geographic Specific Provisions



Specific Provisions by Source





Non-accrual loans to Loans & Advances less than half the level of two years ago


New Non-Accrual Loans relatively
stable, default rate down…



…Non-Accrual Loans as a % of the
portfolio down to just 0.45%





Existing and future problem loans are well provided for


              The period 1998 through March 2004 has seen Group GP trend down to 98bps, consistent with the sustained de-risking of the Group lending book.


              As at March 2004, gross non-accrual loans were 45bps of GLAs. Of this, 44% was covered by specific provisioning.


              Group levels of general provisioning and specific provision cover compare favorably with Australian banking peer group.





(1).    As per most recent company financial reports for CBA, NAB and WBC




Proactive reduction in volume of “Top 10” client committed exposures


•  Implementation of credit management policies to diversify the loan book exposure, has resulted in reducing the client concentration risk, despite the inclusion of NBNZ exposures.  This has been achieved through reducing the volume of “Top 10” client committed lending.


•  Sustained management of client exposures has reduced the sensitivity of the capital base of “Top 10” clients (to 68% of ACE in March 2004 from 75% of ACE September 2003).




(1).                               March 2004 derivative exposures were calculated using a Monte Carlo model to calculate ANZ’s potential credit loss. The impact in moving to this methodology reduced the above ratio by 4.4 percentage points in comparison to ANZ’s previous methodology.




Concentration risk addressed in business and corporate lending book through management cap on industry exposure


              Management has reduced concentration risk in ANZ’s business/corporate loan book by limiting industry exposure to 10% of ANZ Group GLAs


              Increased diversification of business/corporate lending portfolio across industry segments since 1993 has been accompanied by reallocation of business/corporate lending capacity to retail lines of business


% of ANZ Group Lending Assets

(Australia and New Zealand)





RWA to Total Assets not an accurate measure of risk


              RWA/Total Assets under the existing accord is a simplistic measure of risk

             RWA/Total Assets is distorted by Life company assets not appearing within RWA

             does not consider the default risk of individual lending assets, or security profile

             peer banks have higher levels of on-balance sheet derivative revaluations and trading securities which reduce their ratios relative to ANZ


              More relevant is the impact of Basel II, which takes a more sophisticated and granular approach

              Based on QIS3 results, ANZ is likely to receive a benefit greater than peers, reflecting the underlying quality of our book

              Notwithstanding this, APRA unlikely to allow significant capital reductions


(1).    The reduction in RWAs using Advanced IRB outcomes (excluding operational risk) when compared with current accord capital requirements can be used as an indicator of the relative riskiness of a bank’s assets.


(2).    RWA calculations were performed using the capital functions used in QIS 3.0 These may change upon the finalisation of Basel II




*Information as at CBA – 30/6/03, WBC – 30/09/03, NAB – 30/09/03






Other Financial Issues


      Revenue Hedging

      Tax Risk

      Capital Position


•     Outlook




Revenue hedging undertaken when appropriate


              Revenue hedging only undertaken when currency is believed to be outside its normal trading range and inconsistent with their value


              Revenue from FX hedges are reported as Interest Income within the Group Centre






from hedge






Expiry date

March 2004











USD Revenue Hedges










September 2005

NZD Revenue Hedges










September 2008












September 2003











USD & GBP Revenue Hedges











NZD Revenue Hedges















Tax risk substantially lowered


             Tax risk is an ongoing business risk

             We have established a constructive working relationship with the ATO and the IRD

             Some higher risk aspects of the operations of the multi-jurisdictional ANZ Investment Bank have been substantially wound back in recent years

             NBNZ Structured Finance book will be substantially reduced, with the focus going forward on more sustainable business. NBNZ pre-acquisition tax risk is covered by an indemnity from Lloyds TSB


Projected NPAT impact from
NBNZ Structured Finance book



Proportion of NZ 1H04 NPAT
from Structured Finance Deals*



* Geographic profit adjusted for goodwill and funding costs




Capital position remains strong, and towards the top end of our range


              With the acquisition of NBNZ further reducing the risk in the balance sheet, the Group lowered its ACE target range by 50bpts in the half to 4.75% to 5.25%


              Capital position is strong, but will be impacted by new APRA treatment of intangibles

             this is likely to reduce ACE by approximately 20bp from June onwards


Drivers of ACE ratio





A record interim dividend


              The record interim dividend of 47 cents per ordinary share represents an 11.1% increase on the 2003 interim dividend adjusting for the bonus element of the rights issue*


              Policy is to increase dividend in line with cash earnings per share growth


              Cash payout ratio is calculated against core cash earnings (defined as earnings after hybrid distributions, but before goodwill and significant items)


              Expect to sustain full franking capacity for the foreseeable future, despite the lower percentage of Australian profits



*2003 interim dividend discounted by 0.9597 representing the dilution impact of the bonus element of the rights issue




Impact of unwinding TrUEPrS and issuing StEPS














  Sept/Nov 1998


  27 Sep 2003






  Cost of dividend


  8% Fixed


  BBSW Floating











P&L impact







Swap (difference between 8%


  No impact



fixed and BBSW plus margin)










  Tax on swap income


  Credit for dividend paid



  Credit for dividend paid










Net swap income


  No impact






EPS Impact





  Preference Dividend


8% Fixed








Net Cost


BBSW + Margin


  BBSW + Margin






Issued Raised post Results


                  Is the margin decline driven by asset margin pressures?


                  Is the growth in trading income sustainable?


                  Is the balance sheet really lower risk? Why hasn’t sub-investment grade lending fallen?


                  Performance of consumer banking





Margins – very low asset margin compression


Material asset margin compression not
evident, with only 2bp of the margin
decline attributable to competition



Asset growth 2.6% greater
than deposit growth



Shortfall is funded primarily by higher cost wholesale funding, which is the principal driver of the 5bp “funding & mix impact”


It is misleading to measure changes in yield
on average lending assets against the cash
rate, with 25% of assets repricing over
terms of 2 months or greater


Repricing of Australian lending assets





Trading income represents a sustainable source of income





Growth in sub-investment grade lending largely reflects strong SME growth


Change in sub-investment grade



             Sub-investment grade lending has grown over the past 12 months, primarily reflecting growth in Corporate/SME

             It is rare for SME lending to be investment grade, with only ~15% of the overall portfolio investment grade. However loss given default is low, with average security cover on the SME portfolio of 98%

             Key drivers of “Other” growth were Esanda, where lending is secured by the asset being financed, and other areas which tend to be low risk, including Rural and the Pacific

             In IFS, which has been the key focus of our de-risking strategy, sub-investment grade lending has fallen by $1b over the past 12 months


             The best measure of credit risk is the ELP rate, which is a function of expected default rate over the cycle and expected loss given default (which in turn is impacted by the level of security held)

             Since March 02, the underlying ELP rate has fallen from 39bp to 31bp, reflecting the significant improvement in the quality of our portfolio


             It should also be noted that the $250m GP top up taken in March 02 has had zero impact on ongoing ELP charge




ANZ Australian consumer businesses* out performing peers


Consumer NPAT growth
superior to peers (pcp)



Customer satisfaction at top of
major peer group



Deposit volume growth on
par with peers (pcp)



ANZ mortgage FUM growth
superior to peers (pcp)



Source: Roy Morgan Research for the 12 months ended Feb 2004. Peer average includes Westpac only, CBA and NAB. Data based on rolling 12 month averages. Respondents hold transaction account at their nominated main financial institution. Satisfaction is defined as “very” or “fairly” satisfied. “Can’t says” are included in the base.


*ANZ includes PBA, Consumer Finance and Mortgages, NPAT adjusted for cards under accrual

WBC includes Consumer Distribution and Consumer Products

SGB includes Personal Customers (excludes BankSA)




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


For further information visit


or contact


Simon Fraser

Head of Investor Relations


ph: (613) 9273 4185   fax: (613) 9273 4091  e-mail: