Shareholder Update
Contact 08

www.anz.com

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Chairman’s Reportcharles goode

Dear Shareholders
Enclosed with this edition of Shareholder Contact is theadvice of your 2008 Interim Dividend of 62 cents per
share fully franked, unchanged on the March 2007 half.
Our net profit after tax of $1,963 million for the half year
ended 31 March 2008, was down 7%. The cash net profit
before provisions was up 11%. However the provisions for
credit costs were significant and the cash earnings per sharefor the half year were down 16%.
This is the first time our profits have fallen in a half since1998 and your Directors believe the decision not to increase
the dividend is prudent in the circumstances.
The global environment is much more uncertain with
continuing volatility in credit markets and economic growthslowing significantly in the US and Europe. In Australia and
New Zealand we are experiencing an economic slowdown.
However in addition to the change in the credit cycle, we havebeen impacted by some issues which are specific to ANZ.
These include our exposure to a US monoline insurer and theimpact on our reputation that has resulted from the collapseof Opes Prime and our involvement in Securities Lending.
While ANZ has made progress in reducing risk it is clear we
still have much more work to do. There are small areas ofnon-core activities over which there needs to be improved
controls and accountability.

Looking at our divisional performance, there were goodresults from our Personal Division in Australia with cash net
profit after tax growth of 11%.

This was achieved despite higher funding costs. The qualityof our Personal business continues to show through in highlevels of customer satisfaction.
In our Institutional Division profit fell 47% due to a sharp
increase in credit costs although profit before provisions was
up 18%. This result overall is not acceptable. Management
is now focussed on the necessary actions to restore
performance and reduce risk.
Profits from our New Zealand Businesses were up 6% ina slowing economic environment. The result in Asia Pacific
was a highlight with profit up 47% including the full half
contribution from our investments in AMMB in Malaysia
and Shanghai Rural Commercial Bank in China.
We are continuing our investment in the community
including help for those in most need with financial literacy
and savings programs, staff volunteering and local
community initiatives.
What is clear is that although we have a sound and profitablebusiness, there is still much for us to do at ANZ. We arecommitted to improving and growing our operations andproviding good returns to our shareholders.

Charles Goodepages 2 | 3

1 Chairman’s Report22 Chief Executive Officer’s Report 4
3 Shareholder information
5
4 Our People8
5 Our Customers
10
6 Our Community
12
7 Our Environment
14Your Board and our new Chief Executive Officer, Michael
Smith, are committed to taking the necessary action to
improve our financial performance, tighten the managementof risk, and build our reputation based on the Bank’s corevalues of integrity, trust, quality and service.

ANZ is committed to improving its financial performance,tightening the management of risk, and building our reputation
based on our core values of integrity, trust, quality and service.

2

Chief executive officer’s review
mike smith

We have a new aspiration to deliver growth and out
performance for our shareholders by becoming a superregional bank in Asia which will see us doubling profitsby 2012.

Dear Fellow Shareholder,
ANZ is currently undergoing a period of renewal
and change focussed on delivering growth and out
performance for our shareholders.
We have created a new aspiration to become a superregional bank over the next five years by doubling profits
of which around 20% will come from Asia, up from just
7% today.
Asia is now at the centre of global economic growth. Our
strategy builds on the natural linkages which exist between
Australia, New Zealand and Asia through business, migrationand geographic proximity, and ANZ’s historical andexpanding position in the region.
Continued investment and growth in our domestic
businesses is also a critical part of our aspiration. Australia
and New Zealand are our core markets and we have aclear plan to develop our business as a customer centricorganisation with a sales and marketing focus and driven bytechnology which improves the experience of our customers.

3
These reflect the impact of some specific legacy businesses,
particularly in Institutional, and we are looking closely at
our portfolio to ensure our exposures are carefully managed.
The difficulty this has caused is not only financial. The
collapse of Opes Prime for example, has also impacted
our reputation. We are currently conducting a review of ourinvolvement in the Securities Lending business and theevents surrounding the Opes Prime issue and we will reportback to shareholders on this matter later in the year.
We have again chosen to underwrite our Dividend
Reinvestment Plan this half. Together with our high collective
provision balance and increased liquidity position, this allows
us to significantly enhance our balance sheet and ensure weare continuing to operate from a position of strength.
Despite the challenges, what is also clear from ourperformance in the half is that ANZ has a very goodfoundation on which to build. There was strong underlying
momentum with revenue growth up 12% across the Group.
Since I joined ANZ in October 2007, I have spoken to over
10,000 staff and its clear we have great people who arecommitted to the direction we have set for ANZ andoperating as a winning team at every level of the business.
I believe we have the foundation, a clear direction and thecapacity to make ANZ extraordinary. We are in the right placein the Asia-Pacific region, at the right time with the rightpeople to deliver performance and value to our shareholders.

There is much that needs to be done at ANZ however for us
to deliver on our aspiration. That is all too clear in aspectsof our financial results this half.

Michael Smith

40th Annual General Meeting – Brisbane
Date:
Thursday, 18 December 2008
Venue: Ballroon Le Grand, Sofitel Hotel
Time: 10:00 am (AEST)ANZ Staff will be available outside the meetingroom should you wish to discuss banking services,
investment products or securityholder matters.
The Sofitel Hotel is located in the very heart ofBrisbane city and is easily accessed by the train
service to the Central station underneath the hotel.

Key Dates:
Annual General Meeting and Live Webcast,
Sofitel Hotel Brisbane
at 10:00 am (AEST)
Thursdsay, 18 December 2008
Announcement of Annual Results
Year ended 30 September 2008
Thursday, 23 October 2008
Ordinary shares
Final Dividend (2008) Payable
Thursday, 18 December 2008
Ex Dividend Date 6 November 2008
Record Date 12 November 2008

pages 4 | 5

Although we have been warning for some time credit costs
would increase from unsustainably low levels, credit costs
were unacceptably high compared to our domestic peers.

Shareholder
information

3

Shareholder
information

Results Summary

ANZ interim cash earnings per share down 16%
Profit after tax
Profit $1,963 million – down 7%
Cash* profit before provisions $3,335 million – up 11%
Cash* profit after tax $1,674 million – down 14%
Shareholder ReturnEPS 102.4 cents – down 10%
Cash* EPS 87.1 cents – down 16%
Interim dividend 62 cents – unchanged
Business highlights*
Record revenue growth of 12% (13% FX adjusted)despite difficult environment.
Provision charge significantly higher. Credit losses are
isolated and the broader business and consumer bookremain strong.
Individual Provision charge of $604 million (up$416 million), driven by $226 million US monocline
insurer provision which is expected to significantly
reverse over time, $51 million in lower recoveries,
and a mining company provision of $53 million
Collective Provision charge of $376 million (up$324 million), with $131 million due to lending growth,$125 million for an “economic cycle adjustment” and$103 million relating to the downgrading of a large
property company exposure.
Very strong growth in Asia Pacific where we have an
above average presence and which is less affected by
the market turmoil. Profit up 47%.

Renewed momentum in Institutional and across all
businesses in that division.
Ahead of target on term funding plans; continue to maintaina liquidity portfolio around 80% above normal requirements(excluding internal mortgage securitisation).

E-Communications
As an ANZ shareholder, you can choose to receive yourshareholder communications electronically and help savethe Australian environment. With every registration througheTree, a donation of $2 will be made to Landcare Australia
to go toward specified reforestation projects that will help
restore degraded plant, animal and water resources. To
register, please visit www.etree.com.au or www.anz.com/
shareholder/shareholder services/eTreeProgram/
Dividend Alternatives
There are a number of ways in which you can receive yourANZ dividends, which are normally paid in July and December.
Your dividend can be directly credited to your bank account,reinvested into further ANZ shares under the Dividend
Reinvestment Plan or forgone if you wish to participate in the
Bonus Option Plan. Shareholders may at any time change theway they receive their dividend by completing and returninga Plan Election Form available from the ANZ Share Registry.

Contact details

Shareholder Privilege Package:

Investor Relations
Level 22, 100 Queen Street
Melbourne VIC 3000 Australia
Telephone: +61 3 9273 6466Facsimile: +61 3 9273 4899
Email: investor.relations@anz.com

The Shareholder Privilege Package was discontinued,
effective 30 March 2007.

ANZ Share Registry
Australia
GPO Box 2975
Melbourne VIC 3001 Australia
Telephone: 1800 11 33 99+61 3 9415 4010
Facsimile: +61 3 9473 2500
Email: anzshareregistry@computershare.com.au
New Zealand
Private Bag 92119
Auckland 1020 New Zealand
Telephone: 0800 174 007
Facsimile: +64 9 488 8787
United Kingdom
PO Box 82, The Pavilions
Bridgwater Road Bristol BS99 7NH
Telephone: +44 870 702 0000
Facsimile: +44 870 703 6101

We are continuing to honour most of the ongoingproduct offers for eligible shareholders who are
currently using them.
For shareholders who are currently using the
package, benefits on facilities in place as at
30 March 2007 will continue until further notice,with the exception of bank cheques and travellers
cheques.
Discounts on bank cheques and travellers cheques
will now only be available to eligible shareholders
who hold a transaction or savings account with
ANZ as at 30 March 2007. To obtain the discounts
on bank cheques and travellers cheques customers
need to show you their 2006 Shareholder card.
These shareholder benefits will continue to apply
to those with more than 300 ANZ shares.
For any information regarding Shareholder
Privilege package please call Investor Relations
on +61 3 9273 6466 or email us on
investor.relations@anz.com

ANZ also offers a Dividend Charity Donation Program,enabling ANZ shareholders who are Australian resident
taxpayers to donate some or all their ANZ cash dividends
to one of a number of charities.
For more information about how to receive your dividends,
please contact the ANZ Share Registry (details on next page).

* Adjusted for non-core items (i.e. significant items and non-core
income arising from the use of derivatives in economic hedges
and fair value through profit and loss)
All figures compared to March 2007 unless otherwise indicatedpages 6 | 7

Personal impacted most by higher funding costs,
particularly in Mortgages business. Revenue growthof 11%, with profit up 11%.

New Zealand Businesses solid. Some early signs of
New Zealand economy slowing.

People4

We have a long-term focus on developing our people
and culture to create a highly engaged workforce anda strategic advantage that is difficult for other banks
to replicate.
Innovative workplace policies for a diverse workforce
including paid parental leave, guaranteed part time workfor over 55s and flexible work options
Increasing the number of women in management.
Employer of Choice for Woman for six consecutive
years (Equal Opportunity in the Workplace Agency)
100+ Indigenous trainees recruited to our branch network
in 2008 as part of our Indigenous employment strategy
20% reduction in Lost Time Injury Frequency Rate(a standard measure of effectiveness of occupational
health and safety programs) in Australia in 2007 andon track for a further 20% reduction in 2008

anz employee engagement
60% Banking &Finance Avg. 2008
40%

62% ANZ overall 2008

25%

Destructive Zone
Serious Zone
Indifferent Zone
High performance/best employer zone

Case study:
Building a diverse workforce to serve
our customers
A diverse and inclusive workplace will help us innovate,
attract the best people, identify new business and growin the region
ANZ aims to become a major force in Asian banking in the
coming years. A diverse and inclusive workplace, where ourpeople have access to international development
opportunities, will be essential to achieving this goal.
“Diversity in a business context is fundamentally about
valuing people’s unique experiences and attributes andmaking the most of them to achieve superior businessperformance,” says Mike Smith.
“It fosters innovation in the way we design and deliver our
products and helps us better understand and respond to
the needs of a diverse customer base, both in Australia
and New Zealand as well as in emerging markets in Asia.
“And we are more likely to attract a wider range of talented
people as an organisation that regards an individual’s
gender, background, age, disability or sexuality as an asset
rather than a limitation.”
In many ways, this involves changing the traditional viewof ‘what it takes’ to be successful in banking. Every two
years we check our progress with our employees to see if
our policies and programs to do this have been effective.
The results of ANZ’s second diversity census of employees
conducted at the end of 2007 again demonstrated theimportance of understanding and responding effectively
to the needs of our diverse workforce.

We have made a number of significant Executive appointmentsin the past year, bringing new and diverse local and internationalbanking experience to our leadership team:Mike Smith, former President and CEO of HSBC Limited, Chairmanof Hang Seng Bank Limited, Chairman of HSBC Bank Malaysia
Berhad and Global Head of Commercial Banking, HSBC Group was
appointed Chief Executive Officer
Alex Thursby, former Senior Managing Director and Group Headof Corporate and Institutional Client Relationships, Wholesale
Banking, Singapore for Standard Chartered Bank Group, wasappointed Managing Director, Asia PacificDavid Cartwright, former CEO of Intelligent Processing Solutions
Limited in the UK, was appointed Group Managing Director,
Operations, Technology and Shares Services
Susie Babani, former Global Head of Human Resources, HSBC
Insurance Group was appointed Group General Manager
Human Resources
Russell Shields, former Managing Director, Asia Pacific, Transport,
Construction and Infrastructure, Hong Kong at HSBC was appointed
Queensland Chairman
John Atkins, former Head of Office at Freehills, was appointed
Western Australian Chairman
Alistair Bulloch, former Head of Wholesale & Commercial Banking,Korea at Standard Chartered Bank was appointed CEO North East Asia
Joseph Abraham, former Chief of Staff, Client Relationships,
Singapore at Standard Chartered Bank was appointed CEO Indonesia
Jill Craig, former Director Investor Relations AMP Limited was
appointed Head of Investor Relations
Jennifer Fleming, former Head of Regional Development, Technology
at NAB, was appointed Head of Strategy for Operations, Technology
and Shared Services

top – bottom:
ANZ employees, Cameron and Kellie Stirling, use
ANZ’s flexible work arrangements so that they can spend
more time with son Darcy.

Alan Logan, former General Manager, National Practice Management
and Apogee Financial Planning, MLC, was appointed General
Manager, Financial Planning

Cathryn Carver, Managing Director, Corporate Finance,
and Chair of the Institutional Talent Council, is a strong
advocate of advancing women in the workplace.

pages 8 | 9The survey found high awareness and use of the workplacepolicies we have in place to support diversity. For example,
a third of employees are accessing flexible start and finish
time options and many see these policies as a key reason
to stay at ANZ.

Senior appointments since 2007

5

Customers

We continue to invest in measures to ensure our customers
receive simple, convenient and responsible products andservices and our lending and investment decisions are
guided by sound social and environmental standards.

New convenient retail products designed and delivered inline with customer needs, including mobile phone banking

Retail customer satisfaction remains the highest of all majorbanks in Australia

Forests Policy released to guide our decision-making intransactions with a potential impact on forests

More than 80 new branches and 2200 new ATMs opened
over the last three years

Case study:
Supporting Customers in Financial Hardship

Australia’s first responsible lending code protecting
vulnerable customers from unsolicited credit card limit
increase offers

We know that the vast majority of our customers want to
pay their debt and that better solutions can be achieved
if we and our customers work together.

Customer Connect, a new program to better identify andassist retail customers in financial difficulty

Customer Connect trains our people to be more proactivein identifying customers who may benefit from more timeand flexibility to manage their finances during a periodof financial instability or difficulty.

a leader in customer satisfaction(main financial institution: 6 months rolling*)

The program allows ANZ staff, where possible, to tailor
temporary repayment arrangements to what our customers
can afford to pay at the time and does not require themto ‘prove’ hardship, such as job loss, before they receive
assistance.

%
85
80
75
70
65
60
Feb 08Peer 3

Feb 07

Feb 06Peer 2

Feb 05

Feb 04Peer 1

Feb 03ANZ

Feb 02“This has been focused on strengthening the relationshipbetween the Bank and its customer,” says Sue Fraser,
Senior Manager Kildonan Uniting Care, a community-basedorganisation with expertise in consumer hardship. Kildonan
has worked with ANZ since early 2007 to develop the
Customer Connect training and review our customer
hardship policies.

While Customer Connect is designed to make it aseasy as possible for ANZ customers to get back on trackwith their repayments, it is also improving employee
engagement. Early feedback from our people suggests
they find it very rewarding helping customers to better
manage their financial circumstances.
“As a result of the Customer Connect training, in mostcases I am now able to turn a collections call into anoffer of assistance, helping a customer to make anaffordable arrangement,” says Jenny Vong from ANZ’s
Collections area.
“When you hear the sigh of relief in their voice, youcome away feeling like you have actually accomplishedsomething.”
Customer Connect is not a single program limited to one
team or area of the bank – it represents the new way ANZ
staff will support retail customers in financial hardship.
The service is being progressively made available tomortgage, credit card, personal loan and small businesscustomers, with implementation complete by the end of
this month.

Peer 4* Source: Roy Morgan Research – Aust MFI Pop’n aged 14+, % Satisfied(Very or Fairly Satisfied), 6 mth moving average^ Banking Products new transaction account numbers, includes new
Everyday Visa Debit accounts

pages 10 | 11

Josh Maddock, Vijay Satkunasingam and Daina Lambertfrom ANZ’s Project Finance team undertaking online
training on the Equator Principles.

Feb 01

top – bottom:
Branch Manager, Cameron Russell, serves a customer at
the Bathurst and Castlereagh Streets branch in Sydney.

Feb 0055

100% of project finance transactions screened under theEquator Principles“At its heart, Customer Connect’s philosophy recognisesthat the vast majority of customers want to pay their debt
and that better solutions can be achieved if ANZ and its
customers work together”.

6

Community

We work with our community partners to improve levelsof financial literacy, money management and financial
inclusion, especially among the most disadvantaged
people in society
70% of participants in ANZ’s Saver Plus matched savings andfinancial literacy program continue to save the same or an
increased amount 2 and 3 years after completing the program
Progress Loans, a small loans program for those who find
it difficult to access safe, affordable and fair credit frommainstream providers, has been recognised with the Prime
Minister’s Award for Excellence in Community Business
Partnerships (Large Business Category). 145 Progress Loanshave been approved in the last 6 months, on target for
300 by the end of 2008
55,000+ people have participated in our MoneyMindedfinancial education program through our community
partners since 2004
16,000+ hours of employee volunteering over the last
6 months
More than $500,000 donated by ANZ, ANZ staff, customers
and shareholders to over 100 community organisations
through our Community Giving program over the last
6 months

17.9

20

13.8

Aust/NZ
Global2003/04

2004/05

2005/06

2006/07

Saver Plus is helping people on low incomes develop
a long-term savings habit. 70% of participants are stillsaving the same amount or more two and three years after
completing the program“It makes me feel more in control and less stressed. I know
if something goes wrong or I have an unexpected expense
I now have savings to fall back on.”

Linda wasn’t sure what to make of Saver Plus when
she first heard about it through her daughter’s school.
“At first I thought “What’s the catch?”, but I was willingto give it a go – and at the time I was grateful for any
help I could get with my children’s school fees andother expenses”.
Saver Plus was created by ANZ and The Brotherhood of
St Laurence (BSL) – one of Australia’s most respected
community organisations – to help people on low incomes
improve their financial literacy, save money for education
expenses and establish a long-term savings habit.
As an incentive to join the program and start saving, ANZ
matches the savings made by participants dollar for dollar
up to a total of $1,000.
“Once I started the program, I realised there was no catch andit really was about helping people out. The financial education
classes gave me some great tips about money management
which I was able to put into practice straight away.

Like Linda, more than 90% of Saver Plus’ 2,500 participants
have achieved the savings goals they set themselves during
the program. However for ANZ and BSL, the real test of
Saver Plus’ success is whether it inspires a permanentchange in the savings and money management behaviour ofparticipants that continues long after the program supportand matched savings incentives have finished.

The latest research conducted by RMIT University shows
this is the experience of most people who complete theprogram. Around 70% of participants are continuing tosave at least the same amount per month two or three
years after completing the program with more than halfsaving more now than they did when on the program.
Many participants, including Linda, also comment on
how the program provides an opportunity to share better
financial management skills with their families.
“The program has meant my kids can see the benefit ofsaving – they have a computer, wear new school uniforms
and can join extra-curricular activities at school. So now
they save a little of their own money each week in theirown accounts.”
While stories like Linda’s and the RMIT research show
Saver Plus is delivering on its objectives, our nextchallenge is to expand the program’s reach, while ensuring
the core features which have made it a success to dateremain intact.
Financial sustainability is important to this objective andthere are now several examples of local investment toenable the establishment of Saver Plus in specific regions.
The Victorian Government has provided support, last year
contributing $1.5 million over three years for the program’s
expansion in Victoria.
In March, the Tasmanian Community Fund, established tosupport community improvement programs across thestate, announced a grant to assist The Smith Family launch
Saver Plus in Tasmania for the first time.

top – bottom:
Saver Plus participant Linda and her children Taylorand Amber.

International service consultant, Benson Saulo, presents
to the Reconciliation Action Plan Governance Group.

pages 12 | 13

0

Aust

8.3

5

6.6

10

“It’s a long time now since I finished Saver Plus, but I’m
still saving the same amount every week,” says Linda.

“With the savings I made, plus the amount matched by
ANZ, I was able to buy my children a computer for theirschoolwork.”

totalvalue of community investment ($M)$M

15Case study:
People on low incomes can save7

Environment andsupply chain

We set two-year environmental footprint reduction
targets and are working with suppliers to better
understand and manage the impact of the products
and services we purchase

Case study:
Smart meters help measure environmental impact

A solid start in achieving our new two-year footprint
targets in Australia:
electricity consumption down 5%
paper consumption up by 2%
waste down 1.6%
water usage down an estimated 6%

ANZ and property manager Jones Lang LaSalle (JLL) haveworked together to better understand the environmental
impact of our office buildings and branches.

205 suppliers in Australia and New Zealand screened
to understand their management of social andenvironmental issues
Assisting clients adapt to a carbon constrained future
through finance for carbon reducing measures and risk
management products for carbon markets

New energy and water meters are helping us measure
our environmental footprint more accurately‘Smart’ meters measuring the consumption of gas,
electricity and water, have been installed in 90% of ANZ’scommercial buildings in Australia, and will be placed in a
representative sample of ANZ branches throughout 2008.
The meters can be set up throughout each floor of a building
and provide a time-based analysis of resource use. This
enables us to determine the location and amount of energy
and water use at any given time of the day or night.

Facilitating investment in renewable energy projects
such as wind farms, bio-diesel and hydro-power throughinvestment trusts and direct project financing“The meters are useful in uncovering unnecessary energy
and water use, particularly after hours or on the weekend
when office buildings are largely unoccupied,” says Gary
Whatling, Associate Director, National Sustainability Teamat JLL.

progress against two-year goals (by 30 sept 09)“For instance they can help us identify if an air conditioning
system is being switched on too early in the day or switched
off too late at night or is not operating efficiently.”

Goal

Progress

As well as identifying opportunities to improve
efficiency, continual monitoring of energy and water
use can help compare the use of resources over time
and therefore quantify the benefits of measures thathave been implemented, both in terms of resourcesand dollars saved.
For David Cartwright, ANZ’s Group General Manager
Operations Technology and Shared Services, accurate
measurement of our use of resources is key to effectively
reducing the footprint of our current buildings.
“Many of the office buildings we occupy are 20 to
30 years old, some older, so we can’t always use thelatest environmental technology available to newbuildings, like solar power and recycled water.
“However we are determined to use our older buildings
as efficiently as possible – the smart meters will help
us do this, as well as achieve some cost savings along
the way”.
ANZ and JLL will continue to install the meters inbranches and our data centres throughout 2008.

Reduce electricity consumption by 5%
Reduce paper purchased by 10%
Reduce water usage by 5%
Reduce waste to landfill by 10%

Taking the new petrol-electric hybrid vehicle for atest drive.

Carbon neutral by 2009
On track

Behind schedule
pages 14 | 15

top – bottom:
Employees from ANZ and Lend Lease discuss plansfor ANZ’s environmentally friendly commercial officebuilding at Docklands, Melbourne.