ANZ Wealth Strategy
Delivering performance throughgrowth, innovation and productivity

AUSTRALIA AND NEW ZEALAND
BANKING GROUP LIMITED
28 November 2012

Joyce Phillips
CEO Global Wealth and Private Banking

Agenda Global Wealth and Private Bank Growth segments and markets - the opportunity in wealth Our strategic agenda – innovation and productivity
 Focus on performance
 Q&A

1

Renewed focus as a global business
2002

2007

2009

2010

2012

May 2002

June 2007

September 2009

Throughout 2010

March 2012

Joint venture with
ING Group - funds
management and life
insurance - Australia
and New Zealand

ANZ acquires
E*Trade Australia

ANZ moves to fullownership of ING
Australia and New
Zealand joint ventures

Integration with
Australia and New
Zealand divisions

Renewed focus as aseparate division –Global Wealth &Private Banking

ANZ acquires selected
RBS Asian businesses

Geographic Segments

Australia

New Zealand

RetailBanking
Australia

Global Segments
China

Corporate &Commercial
Banking
Australia

RetailBanking
New ZealandCommercial& AgriNew Zealand

RetailBanking
Asia PacificCommercial
Banking
Asia PacificTaiwanHong
Kong
Singapore

Global
WealthandPrivateBankingGlobalInstitutional

Indonesia

Australia

International

Priority wealth markets
Home markets
2

New
ZealandOpportunity and capability to change the game Growing markets in Australia, New Zealand and Asia
 An attractive and loyal customer base
 Leading position in Life Insurance
 Leading position in KiwiSaver
 Profitable Private Bank in Australia and New Zealand and presence in highgrowth Asian countries
 Improved salaried planner channel +1,100 active aligned dealers Innovation – new ways for customers to engage with their wealth and ANZ
 Regulatory and other changes support our new customer engagement
models3

Growing wealth markets in Asia and Australasia
Global Private Wealth(2011-16F, $T)
151

Forecast Super(Australia, FUM $T,
CAGR 2011-21F)

23.6

Eastern Europe
Latin America
Middle East, Africa

3.1

123
Asia-Pacific
27% (ex Japan)

19%
15%

27%

31%

North
27%
America

Direct 10%

Retail Super
2%
Retail Pension
10%
Direct /EmployerSuper 16%

15.8
Retail 9%

1.9

12% Japan

24% Western
EuropeForecast Life Risk
(Australia, In-force $B,
CAGR 2011-21F)

SMSF‟s
10%

1.3

10.0

Industry 9%Group 9%Corporate 0%
Public 6%

2011

2016F

2011 2016F 2021F

Source: BCG Global Wealth Management Database 2012, Rice Warner Actuaries
42011 2016F 2021F

Attractive opportunity in our existing franchise
Bank customers with a wealthproduct from their bank1

Customer Attrition
-45%

20%

18%

Peer 1
Peer 2
ANZ customer
without wealth16%

ANZ customer
with wealth

Revenue per Customer

Peer 3

+65%
14%

12%
Jul 10 Jan 11 Jul 11 Jan 12 Jul 12 Jan 13
ANZ customer
without wealth

ANZ customer
with wealth

1. Source: Roy Morgan Research. Aust Pop'n aged 14+, rolling 12 months. Traditional Banking Consumer Market (Deposits, Cards & Loans)
Peers: CBA Group (excl. Bankwest), NAB Group (incl AVIVA), Westpac Group (incl. St George).
Wealth defined as Wealth or Insurance (Superannuation, Managed Investments & Insurance).
5

Industry changes support our strategy
Industry Shifts

Our Opportunity

Regulatory Changes

Raise the bar in advice

Technology &Consumer Behaviour

Digital and directchannels

Attitudes to Advice

Self directed customer

Demographic Shifts„Boomers‟ into
retirement

6

Our Objective

Finding new ways forcustomers to engage
with their wealth and
ANZ

Competing with adistinctive and uniqueposition in the fastest
growing segments ofthe market

Our strategic agenda

Guiding Principles

 Grow relationships
with existing ANZ
customers Drive higher returns
and value fromexisting businesses
 Simplify thebusiness andleverage global
capabilities

Productivity

 Synergies from theglobal model― Leveraging ourleading life
insurance businessacross geographies
 Increasing
productivity andcapacity in advice
 Fit for purpose
platforms

7

Innovation

 Smart Choice directsuper Advice transformation
 Building a distinctive,
regional Private Bank
 New approach to
growth segments New digital solutions
 Physical WealthInvestment Centres

Productivity - synergies from the global model
ANZ Wealth is contributing to ANZ Group’s productivity agenda
Synergies within GW&PB

Synergies with the ANZ Group Leveraging product and platform
capabilities in Australia across theregion Continuing to leverage ANZ's global
operations hubs
 Building capacity to penetrate the
ANZ customer base Integrating operations acrossAustralia and New Zealand Integrating new digital propositions
with ANZ's online and mobilebanking offer

 Process improvement andautomation, to maximise straight
through processing
 Consolidating technical experts incentres of excellence

Early progress - headcount reduced 11% YoY;
Operating Expenses reduced 3% 2H12 v 1H12
8

Our leading life insurance capability
In-force premiums($m)

Life Insurance ROE(indexed)

4%

2,000

200
General
9%

1,500
1,000

Individual
11%

500

Group
(14%)

0
FY11

FY12

150
100

183

50

100

0
In-force Book

FY12
Marginal Return

Insurance Embedded Value
($m)
3,000

Economic Assumption
Cumulative free cashflow

22%

2,500
2,000

Value of future free cashflow

1,500
1,000
FY10

FY11

FY12

9

 Growing premiums in
the profitable areas ofgeneral and individual
risk while maintaining
financial discipline inGroup Returns on the new
business are
significantly better
than our in-force book
 Total value creation of
the Life business up
19% CAGR excluding
economic assumptions
over 2 yearsIncreasing planner productivity and capacity
S&I FUM / ANZ adviser(Australia only ($m))

Risk production /ANZ adviser(Australia only ($k))

Total owned & aligned
advisers(# Advisers, Australia & NZ)

+13%
7

6.4

100

NZ

6
5

60

4
3

1,500

74

80

+37%

1,439
30

Australia

40

1,109
Targetcapacity

2
20

1

300
0

0
ANZ
2011

ANZ
2012

Industry
median

ANZ
2011

ANZ
2012

Industry
median

ANZ

1

Peer
2
average

Aligned advisers
Salaried advisers
Source: Comparator Quarterly Benchmarking for Financial Planning Businesses; ANZ internal data; Money Manager Top 100
Advisor Survey
Note: Total GW&PB advisors of 2,109 as disclosed in Results Announcement includes New Zealand and Private Bank advisers(1) Active aligned advisers only, excludes inactive and CAR advisers; (2) Source: Money Management top 100 Adviser survey
2012. Peer Average based on Australian advisers only
10

Investment platforms – simplify and focus
Launched 2012

Simplification

In progress

Client Need

Making SMSF
simplerComplex
AdviceSelf Managed
Super Funds

E*TradeWrap
Mastertrust

Low/NoAdviceIndustry FUM
Growth1(Aust. 2011-16F)

Mass Retail Super:
Employer & Direct

Extending
functionality$113 billion$43 billion
Simplifying from 8 registries to 2

1: Source: Rice Warner Actuaries

11

Solution
sophistication$164 billion

Innovation - Smart Choice Super
Visibility

Choice & Control

Great ValueANZ Smart Choice fees vs othersuper funds

$716

$521
$300

 See your superalongside otheraccounts
 Never lose your superagain

 Life stage investments
 Choose how involved you
want to be with quality
investment options

ANZ
Smart
ChoiceSuper

Average
Industry
Fund

Average
Australian
Super
Fund

 One low investmentfee (0.50%)
 Low $50 annual
administration fee 24/7 access
Source: SuperRatings „Fees Analysis‟ 21/11/12, based on analysing fees on ANZ Smart Choice Super – 1960‟s diversified
investment option as of 1/12/12 and 319 superannuation products in Australia (including 126 industry funds) as at 30/9/12, on a
$50,000 account balance. See anz.com/smartchoice for full documents and assumptions.
12

Innovation – raising the bar in advice

 Our customers are demanding greater value in advice

Quality

Consistency

Well informed
personalised advice
from highly
qualified WealthManagers with
innovative tools

Streamlined,
consistent advice
experience acrossall channels andregions

Alignment
Long-term ANZ
Adviser relationships

Advice Transformation Initiatives
New Advice
Academy andaccredited ANZ
Wealth Managers

Centre ofexcellence forgovernance andrisk management

Development of a
new tied agency
model

13

Valued Advice

Building a distinctive regional Private Bank

In alliancewith...

Strong domestic
franchises and affluent
customer base acrossAustralia & New Zealand=

A compelling newPrivate Banking
proposition+

World-class investments
capabilities=

Robust cross-bordercapabilities, for agenuinely super regional
private bank+

Global advisory &discretionary mandate
capability=

Ability to meet all of ourcustomers product needs
for the HNW segment+

Highly regarded Swiss
Private Bank

Growing distribution
footprint & customer
base in Asia

Mature deposits & lending
capability, with banking
licenses in key markets

14

Growth segments: Women and Wealth
Wealth controlled by women (%)

 55% of affluent women feel their WealthManager could better meet the specificneeds of women in wealth management

33
31
29
27

 Women tend to take a longer-term viewof performance and have longer-termgoals Women respond differently to some life
events, such as inheritance or divorce Women tend to value simplicity andrequire advisors to make effective use of
their time
 Women tend to value long-lasting
relationships based on personal trust

North
America

Source: BCG, 2010

Australia &Asia
New Zealand (ex Japan)

Global Women tend to be more open tofinancial education
15

New ways to engage with our customers

Digital WealthInvestment Centres

Technology-enabledadvisers

16

Wealth Investment
Centres

Focus on performance
Global Wealth and Private Banking
Operating income($m)

Cost to Income
Ratio (%)

+3%

-3.5%

Clear Focus on Returns

Net profit after Tax
($m)
+19%

 Value of new business significantly
exceeds the Group‟s cost of capital

750

728

245
60
56

1H12

2H12

 Deploying capital to products andchannels that deliver appropriate
returns

1H12

2H12

 Support growth opportunities withsustainable reduction in operating
expenses from other areas

206

 Further synergies available within
Wealth and more broadly with ANZ

1H12

2H12

17

 Comprehensive reinsurance review
in progress to improve returns

What does success look like?
 A material contribution to the total profit and market value of ANZ

 Changing the way our customers engage with their Wealth and with ANZ

 Using innovation to deliver our strategy – investing $80-$100m per annum Addressing our underweight position in Superannuation & Investments

 Industry-leading customer penetration

 Building a distinctive regional Private Bank
 Improve Return on Equity through productivity gains and leveraging the
global operating model

18

ANZ Wealth Strategy
Delivering performance throughgrowth, innovation and productivity

AUSTRALIA AND NEW ZEALAND
BANKING GROUP LIMITED
28 November 2012

AppendixGlobal Wealth and Private Banking Division
Underlying profit growth

FY12 v FY11

Global Wealth and Private Banking Division
Underlying profit-1%
Insurance annual in-force premiums

$m

1,822

$m

457

451

1,758
1,722

2H11

245
206

1H12

2H12

Cost to income ratio
59.8%
57.4%

58.0%
56.3%

FY11

FY12

1H12

2H12

FY11

20

FY12

1H12

2H12

Global Wealth and Private Banking – Financial
Performance
Underlying NPAT movement – FY12 v FY11
$m

457
5
12

17

451

Tax and
OEI

FY12

4

245

Tax and
OEI

2H12

4
12

Down 1%FY11NetInterest

Other
IncomeExpenses

Provisons

Underlying NPAT movement – 2H12 v 1H12
$m

27

206

13

-

5

Up 19%
1H12

Net
Interest

Other
IncomeExpenses

21

ProvisonsKey business drivers: Super and Investments
Funds Under Management
($b)
49

+6%

Investment flows from salaried &aligned planners (Australia $m)52

 FuM up 6% YoY

84
41

43

8

9

FY11
New Zealand

-456

FY12
Australia

Superannuation market share1(Australia, Qtr to June 2012, %) ANZ owned advice
channels have
improved; open
market stillin outflow

FY11

FY12

KiwiSaver(New Zealand, Customers)

 Share ofsuperannuation net
flows above shareof FuM in Q2 2012

22%

15%
9%

FUM

368

269
Net Flows

FY09

433

FY10
FY11
Customers '000

1. Source: Plan for Life
22

494

FY12

 Continue to be the#1 provider in the
KiwiSaver market

Key business drivers: Private Bank
Continuing to “Up tier” our Private Bank
customer base, a key driver of our businessstrategy

Australian business relatively underweight inInvestments; significant opportunity for
growthBusiness Mix in Private Bank(%)

Avg. FUM/Client in Private Bank
(YoY change, %)
FY11

FY12

Lending Assets

+18%

44%

+33%

Investments

51%

Deposits

61%

+12%

43%

18%

9%

31%

30%

Asia

Australia

13%
New Zealand

Asia

Australia

New Zealand23

Key business drivers: E*Trade
E*Trade Annual Trades (Australia)

 Online broking and investment
lending critical to our wealthvalue proposition

Volume „000s

-27%

8,000

50,00040,0006,000

30,0004,000

20,0002,000

10,0000 Challenged in the past 4 years
by market conditions and lackof investment in customer
experience0
FY09
Annual Trades

FY10

FY11

FY12

Online trading market volume (RHS)

1

E*Trade Annual Investment Loan Volume
Outstanding (Australia)
$b

$b

-11%

2.0

 Investment Lending market
share up from 8% in 2009 to
10% today

20

1.5

15

1.0

10

0.5

5

0.0

0
FY09
FY10
FY11
FY12
Avg. Investment Loan volume outstanding
Total IL market FUM (RHS)

2

1. Source – IRESS 2. Source - RBA
24

Global Wealth and Private Banking Division (GWPB)• A new division that combines Global Wealth and Private Banking across Australia, New Zealand and theAsia Pacific• Responsible for delivering investment, superannuation, insurance and advice solutions and privatebanking services to our customers• The business is managed on a global basis to ensure an aligned approach and leverage ourtalent, systems and operations

Global Wealth and Private Banking
Australia

New Zealand

Asia Pacific

Business Units
Global Pension &Investments

Global Insurance

Global Private
BankingGlobal Channels
Direct Channels
Advice & Distribution

25

GlobalWomen’s
Segment

E*TRADEGlobal Wealth and Private Banking - Leadership TeamCEO Global Wealth &Private Banking
Joyce Phillips

Acting Global
Chief Risk
Officer
Alison Larsson
DeputyManaging
Director
Gavin Pearce

MD Global
DirectChannels & GM
Marketing
Steve Sheppard

Chief
Investment
OfficerStewartBrentnall

MD Global
Advice andDistribution
Paul Barrett

MD Wealth
New Zealand andActing MD Global
Private Banking
John Body*

GM Global
DigitalSolutionsPeter Dalton^

Acting MD
GlobalInsurance
Gavin Pearce

MD Wealth
Asia
Bret Packard

Chief
Operating
Officer
Graeme Hosking

Chief Financial
OfficerJohn Frechtling

MD Global
Pensions &Investments
Craig Brackenrig

GeneralCounselLawrence
Hastings* Geographic reporting line to David Hisco CEO, New Zealand^ In addition to this role, will continue to maintain Group Innovation
position
This role reports into Nigel Williams, Chief Risk Officer
26

GM Strategy
and MD
E*TRADEPeter Mullin

GM BusinessControl & QA
Therese McGrath

GM Global
Women’s
Segment
Catherine
McDowell

GM HumanResources
Morag Eyles

CEO Global Wealth and Private Banking Joyce Phillips
Joyce Phillips is CEO, Global Wealth and Private Banking
and Group Managing Director and Management Board
member at ANZ responsible for marketing, innovation anddigital. Prior to joining ANZ in 2009, Joyce was President
and Chief Operating Officer at American Life Insurance
Company (ALICO) a subsidiary of American International
Group, Inc. (AIG) which had operations in 55 countries.
Joyce joined ALICO from Citigroup, where she was head ofInternational Retail Banking. In that role she was
responsible for strengthening product distribution andexpansion in Citigroup‟s global retail banking franchise in
42 countries. Business lines under her leadership included
online banking, loans, deposits, investments andinsurance.
Previously, she held various senior positions in CitigroupJapan, including Country Business Manager andRepresentative Director of Citibank‟s Retail Bank, as wellas President and CEO of Citicorp Diners Club Japan.
Joyce was named to the U.S. Banker “25 Most Powerful
Women in Banking and Finance” list in 2006, 2007 and2008.
She has an MBA from the Stern School of Business, NewYork University and is fluent in Japanese.
27

KEY DATES
2012
Appointed CEO, Global Wealth and Private
Banking, as well as retaining responsibility forMarketing, Innovation and Digital as GroupManaging Director and Management Board Member.
2009
ANZ Group Managing Director, Strategy, Mergers &Acquisitions, Marketing, Innovation and Online
Banking
2007
President & Chief Operating Officer, AmericanLife
Insurance Company (ALICO)
2005
Head of International Retail Banking, New
York, Citigroup 2001 Country Business
Manager, Japan, Citigroup
1999
President & CEO, Citicorp Diners
Club, Japan, CitigroupGlobal Wealth and Private Banking - TeamPaul Barrett
MD Global Advice andDistribution

Paul Barrett has over 17 years experience working in banking and wealth management.
Prior to joining ANZ Paul was the General Manager of Colonial First State Advice
Business.

John Body
MD Wealth NZ

John has worked for ANZ‟s markets business for 22 years and was Managing Director
Private Banking New Zealand before the New Zealand Wealth business was set up in2010.

Craig Brackenrig
MD Global Pensions andInvestments

Craig has over 25 years experience in financial services. Prior to joining ANZ Craig worked
for Aviva plc as Financial Director, Asia Pacific Region and previously as Chief Financial
Officer for Aviva (formerly Norwich Union) in Australia

Stewart Brentnall
Chief Investment Officer

Stewart has worked in the investment management industry for over 20 years, in boththe UK and Australia, managing Australian and Global Equity portfolios as well as Multimanager and diversified funds.

Peter Dalton
GM Global Digital
SolutionsPeter was previously ANZ's Group CIO. He has also worked as a software engineer for
Foxborough L&N and as an electronic systems engineer at Mount Isa Mines. Peter holds
a Bachelor of Electronic Systems Engineering and a Bachelor of Applied Science.

Morag Eyles
GM Human Resources

Morag commenced employment with ANZ in 2004 and has held a number of senior
management and executive HR positions within Australia and Asia. Morag has worked in
HR for 17 years in the USA, UK and Asia for financial services, banking and professional
services organisations.

John Frechtling
Chief Financial Officer

John has over 20 years experience in financial services, having worked as Chief Financial
Officer for BT Financial Group and the retail divisions of the Westpac Banking Corporationin Australia and New Zealand.

Lawrence Hastings
General Counsel

Prior to joining ANZ in 2011, Lawrence was a Partner in the Financial Services Practice ofa top tier law firm and has particular expertise in superannuation, life
insurance, distribution, investments and regulatory compliance.

28

Global Wealth and Private Banking - Team
Graeme Hosking
Chief Operating Officer

Graeme Hosking has been with ANZ for six years. Prior to this appointment, Graeme
spent four years managing Operations, Technology, Project Delivery and Business
Execution across the Institutional Division at ANZ, and a further two years as the
MD, Operations for ANZ.

Catherine McDowell
GM Global Women‟s
Segment

Catherine has been with ANZ for six years. Prior to her appointment to the Women‟s
Segment, Catherine was the Managing Director of ANZ Private for Australia and New
Zealand, including ANZ Trustees, E*TRADE, Investment Lending, and SuperConcepts.

Therese McGrathGM Business Control &QA

Therese McGrath is an international executive having held senior finance, strategy &operations positions within companies such as Diageo plc, Thomson Reuters, SAP &Microsoft. Therese joined the ANZ Group in 2009 and the Global Wealth & Private
Banking division in June 2012.

Peter Mullin
MD E*Trade

Peter commenced employment with ANZ in 2005 and has held a number of executive
positions across ANZ in both Business Divisions and the Group
Centre.

Bret Packard
MD Wealth Asia

Bret Packard was appointed to the role of Managing Director Wealth Asia, Global Wealthand Private Banking in October 2012. Bret has more than 24 years in senior global
banking and wealth management roles.

Gavin Pearce
Deputy MD/ MD Global
Insurance

Gavin Pearce has more than 30 years of extensive financial services experience. Prior tojoining working at ANZ, Gavin was Chief Executive Officer of the Australian Investment
Division of Tower Australia Group.

Steve Sheppard
MD Direct Channels &GM Marketing

Steve joined ANZ in 2009 as part of ANZ‟s acquisition of INGA Australia. He has over 20
years‟ experience in the financial industry, the majority of those in Wealth Management.

29

The material in this presentation is general background information about the Bank‟s activities current at thedate 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 theinvestment objectives, financial situation or needs of any particular investor. These should beconsidered, with or without professional advice when deciding if an investment is appropriateThis presentation may contain forward-looking statements including statements regarding our intent, belief
or current expectations with respect to ANZ‟s business and operations, market conditions, results ofoperations and financial condition, capital adequacy, specific provisions and risk management practices.
When used in this presentation, the words“estimate”, “project”, “intend”, “anticipate”, “believe”, “expect”, “should” and similar expressions, as they
relate to ANZ and its management, are intended to identify forward-looking statements. Readers are
cautioned not to place undue reliance on these forward-looking statements, which speak only as of the datehereof. Such statements constitute “forward-looking statements” for the purposes of the United States
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the result of any revisions to these forward-looking statements to reflect events or circumstances after thedate hereof to reflect the occurrence of unanticipated events.
For further information visit

www.anz.com
or contact
Jill Craig
Group General Manager Investor Relations
ph: (613) 8654 7749 fax: (613) 8654 9977

e-mail: jill.craig@anz.com