A Strategic Overview

1. A Strategic Overview Presentation to CSFB Australian Financial Services ConferenceMelbourne, 27 September 2001 John McFarlane Chief Executive Officer Australia and New Zealand Banking Group Limited

2. Five key factors are driving ANZ’s current and future performance • Improving sustainability of earnings • Revenue growth • Productivity enhancements • Risk reduction • Perform Grow Breakout program Improved financial outcomes: • Return on Equity – target 20%+ • Earnings per share – target 10%+

3. 1. Sustainability of earnings continues to improve Lending Profile Focus on lower risk, more sustainable activities • Investment and emphasis on Personal Financial Services • lower risk • more sustainable • higher growth • Corporate balance sheet growth restricted • Focus on fee income • Higher quality corporate book Business Consumer

4. 2. Significant revenue growth over five years $m Revenue growth • Revenue CAGR for • PFS ~ 8.8%, • CFS ~ 10.7%, • International and subsidiaries ~ 0.2% • Interest income CAGR over the five year period is ~ 5.7% and ~ 8.2% for non interest income CAGR ~ 6.7% H2 estimate

5. 3. Productivity improvement is providing scope to invest for growth Clear leadership on Cost Income ratio Return on Assets % % Target Mid 40’s

6. 4. We have a continuing focus on reducing risk Exited higher risk activities Implementation of a range of measures which have reduced risk • emerging markets trading • retail stockbroking • Latin America • Grindlays • Emerging marketscorporate lending • greater portfolio diversification • commercial property down from 24% in early 90’s to 8% today • early introduction of EVA/NIACC methodologies • significantly enhanced sophistication of credit, market and operating risk management • more open/transparent disclosure

7. Risk profile of the corporate book is within expectations and remains sound Corporate risk grade profile Risk actively managed • Quarterly strategy reports prepared for all high risk accounts • All BB rated & high risk accounts reviewed regularly • Single customer concentration limits lowered AAA to BBB+ BBB to BBB- BB + to BB BB- > B >B = B, B-, CCC & non-accrual

8. Consumer portfolio has improved Arrears > 60 days % • improved collections activity • low interest rates and • stable employment conditions (up to August) Delinquency levels have improved, driven by: Closely monitoring in light of recent events

9. Provisioning is in line with expectations $m Actual SP v ELP charge - Corporate Financial Services • Slowing domestic economy will increase specific provisions for 2H01 • ELP is a function of volume (on and off balance sheet), risk grade profile, and level of security • Specific Provisions tend to be less volatile in Personal businesses and track more closely to ELP ELP charge SP charge

10. Group’s capital adequacy ratio is strong at 10.4% % Capital Ratios • Inner Tier 1 and Tier 1 ratios for September 2001 expected to be broadly in line with September 2000 • Ratios were managed down in first half by $1bn buy back (completed in May) • No AASB 1038 Appraisal Value accounting • Target Inner Tier 1 is 6.0%

11. e-Transform Perform Grow & Breakout 5. Building for the future - a distinctive strategy • Proposition • Entrepreneurial specialists create more value • Corporations must embrace new technologies • Value depends on performance, growth and breaking out • Strategy • ANZ as a portfolio of 16 specialist businesses • An e-Bank with a human face • Drive results, invest in growth businesses and create new paradigms/culture • Implications • Specialist approach to customer and product businesses • Transform the way we do business with IP technology • Meet expectations, fund growth by cost reduction, transform Specialise

12. Transforming ANZ through Perform, Grow and Breakout • Focus: corporate transformation • Benchmark: global industry/players • Looking for: dramatic change • Horizon: 3-10 years • Success: dramatic market cap increase Break out • Focus: specialisation and out-growing the market • Benchmark: competitors in each business • Looking for: breakout moves in key • businesses (eg QTV, TPMO’s) • Horizon: 2-5 years • Success: 4-5 moves taking share and • worth ~AUD1bn+ market cap each Grow • Focus: performance • Benchmark: market expectations • Looking for: six monthly delivery • Horizon: 1-3 years • Success: meet/exceed expectations • consistently Perform

13. Looking forward we are targeting further improvement in each key factor • asset growth biased towards consumer and small business • corporate focus on increasing ROA Improving earnings sustainability • annual investment in growth businesses • revenue growth at least equal to nominal GDP growth Revenue growth • targeting mid 40’s by 2003 • consistent improvement half on half Lower cost-income • reductions in single customer limits • portfolio risk management approach Risk reduction • breakout cultural change program • values based leadership Perform Grow Breakout program

14. We are performing well and on track to deliver on our commitments Measure EPS growth ROE Cost-income ratio Inner Tier 1 Credit rating 2003 Commitments > 10% > 20% mid 40’s 6% maintain AA category As at Mar-01 13% 19.6% 49.4% 6.2% maintained • Outlook – 2001 • Specific provisions should be marginally above ELP • Earnings expected to be towards the top end of analyst forecasts

15. The material in this presentation is general background information about the Bank’s activities current at the date of the presentation. It is information given in summary form and does not purport to be complete. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. These should be considered, with or without professional advice when deciding if an investment is appropriate. For further information visit www.anz.com or contact Philip Gentry Head of Investor Relations ph: (613) 9273 4185 fax: (613) 9273 4091 e-mail: gentryp@anz.com