ANZ3843 SForm_FA 2.11.qx

3/11/05

12:29 PM

Page 1

Inspired people.
Outstanding results.

2005 Shareholder Review

ANZ3843 SForm_FA 2.11.qx

3/11/05

12:29 PM

Page 2

2005 INVESTOR SNAPSHOTMEASURING PROFIT AND RETURN
2005 has been another good year for ANZ as we continue to deliver for all our stakeholders.
We have rewarded shareholders with strong returns and built a unique culture that
continues to deliver leading staff engagement and customer satisfaction. Our community
involvement and recognition has increased significantly. Our focus remains on building
a sustainable business to deliver long term for all stakeholders.

01 2005 Investor Snapshot

10 The Board of Directors

02 Chairman’s Report

12 Director and Executive

NET PROFIT AFTER TAX ($m)

DIVIDEND (cents)

3,018

110

Remuneration 200504 Chief Executive Officer’s Report
06 Our Business Performance

13 People, Community and the Environment

08 Five Year Summary

14 Information for Shareholders

TOTAL SHAREHOLDER RETURN (%)

CUSTOMER SATISFACTION (%)

MARKET SHARE (%)

STAFF ENGAGEMENT (%)

33

76.5 73.5

11.1

63

60

101
10.3
2,815

17

Australianretail customer
satisfaction withMain Financial
Institution1

Share priceappreciation
plus dividends
05

04

7.2%

05

04

8.9%

05

04

05

04

1 Source: Roy Morgan Research% Satisfied (Very or Fairly),
6 monthly moving average

Share oftraditional retailbanking productin Australia205

ANZ has themost engaged
workforce of alllarge Australiancompanies3
05

04

2 Source: Roy Morgan Research04

3 Source: Hewitt Best Employers
survey2005 HIGHLIGHTSAwarded ‘Bankof the Year’ for thesixth year in a row(as voted by Personal
Investor Magazine)

02

Awarded Best
Call Centre andnow open 24/7

The leadinglarge Australianorganisation for
the Advancementof WomenAwarded New Zealand
Bank of the YearEARNING COMMUNITY TRUSTMANAGING RESPONSIBLY

Our community investment strategy seeks toincrease the financial literacy and inclusion of
adult Australians and enable our people to support
the causes important to them. More than 18% of
our people contributed 24,000 hours of volunteer
time in 2005 and 28% of our staff have donatedfunds through workplace giving.

ANZ ranked in the top 10 of top 10% banks globallyon the Dow Jones Sustainability Index. We scored
100% for our Community Management Practiceon the Corporate Responsibility Index and we
maintained our membership on the FTSE4Good
Global Index.

2005 investor snapshot01

ANZ3843 SForm_FA 2.11.qx

3/11/05

12:29 PM

Page 4CHAIRMAN’S REPORTA MESSAGE FROM CHARLES GOODE

The achievements of the past year would not have been possible without thecommitment and dedication of our people. On behalf of my fellow Directors and allshareholders, I thank them for their contribution to ANZ’s success and look forward
to their continuing support.

ANZ has once again met its commitment
to shareholders, producing a record profit,a 17.3% return on shareholder equity anda strong capital position.

Both our Corporate business and Esanda
continued to deliver solid and consistentearnings growth in an increasinglycompetitive environment.

For the year ended 30 September 2005, profit
after tax was up 7% to a record $3,018 million.
Excluding significant items and integration
costs associated with the National Bank of
New Zealand, our profit was up 12% to$3,056 million.

In New Zealand, the competitive environment
coupled with our continued investment in the
ANZ retail business offset a good performanceby the National Bank of New Zealand franchise.

The Directors were pleased to increase thedividend by 9% to 110 cents per share fully
franked. This was the 12th consecutive increasein our annual dividend.
Our Australian businesses performed well,particularly our Personal business which
recorded growth above that of the financial
services sector. We are now, on many criteria,
the best performing major retail bank inAustralia, a noteworthy achievement given
ANZ’s heritage as a predominantly
corporate bank.
Our Institutional business recorded a solid
performance in what has been a highly
competitive year. This business is undergoinga period of reinvigoration following a numberof years of relatively flat earnings and low asset
growth, arising from our de-risking program.

02

Our Asia Pacific business delivered a goodunderlying performance and we have continued
to invest in the region, establishing newpartnerships this year in Vietnam andCambodia. We are making good progressin establishing partnerships in China.
We are managing risks well and are seeing
the results from the de-risking program
undertaken in recent years. Net specificprovisions were down by 19% to $357million.
Our capital position is strong, with the Group’s
adjusted common equity ratio at 5.1% of risk
weighted assets, above our target range of
4.5% to 5.0%.

demonstrate the benefit of having some
Directors with long-standing institutional
knowledge of the company and the experienceof all phases of the economic cycle. We
thank them sincerely and wish them wellin their retirement.
Outlook
It is likely that we are moving into a periodof slightly lower economic growth and a morecompetitive environment. This calls for asystematic focus on costs and revenue growthand I believe that ANZ is well placed to meet
future challenges.
In the coming year we should continue tobenefit from the momentum we have built in
our Australian businesses. In the medium term,
we expect to see improved returns from theintegrated business in New Zealand, while
over the longer term our position in Asia should
become of more importance.
We are focused on delivering sustainable
returns for our shareholders.

Board changes
Directors Brian Scott and John Dahlsen, bothof whom were on the ANZ Board for 20 years,
retired during the year.
Their wise counsel and insightful contributions
to Board deliberations over many years

Charles Goodechairmanchairman’s report03

ANZ3843 SForm_FA 2.11.qx

3/11/05

12:29 PM

Page 6CHIEF EXECUTIVE OFFICER’S REPORTA MESSAGE FROM JOHN McFARLANE

For over a decade now, shareholders and other stakeholders
have benefited from the strategic expansion and strength of our
financial performance. Profits now exceed $3 billion, and we have
expanded our position in Australia, become the leading bankin New Zealand and the South Pacific, and we are the leading
Australian bank in Asia. We can be proud of these achievements.

Growth and Transformation
That is now, but what of the future? We haveset ourselves a new challenge of becoming
Australasia’s leading bank. This requires a
new agenda with two principal themes–
Growth, and Transformation.
Growth is about expansion of our franchiseand building leadership positions in our core
domestic businesses in Australia and New
Zealand and expanding into Asia and thePacific, as well as serving our clients fromthese geographies across the world. We expect
Australia will initially drive our growth andperformance as it did in 2005. Later we
expect our leadership position in New Zealand
to bear fruit, and over the longer term, Asia
will become increasingly meaningful.
Growth also means delivering strong
returns for shareholders by raising our annual
revenue growth to 7% – 9% over the coming
years. We made good progress in 2005 witha substantial increase in our investment
spending; adding over 2,200 people in theyear, mainly to increase our footprint andto expand our service to customers.

Transformation is about maintaining
world-class productivity, demonstrated bya cost-income ratio of 40% or below. Last
year, we also put plans in place to transform
ANZ into a leaner, sharper, more agile, andmore externally focused competitor. This
will involve shifting our priorities towards
customers and reallocating resources frominternal activities. It means increased
automation, redesign of our operational
platforms, and leveraging low-costoffshore capabilities owned by ANZ.

and capital. They are much more than this.
A vibrant company is more than the sum of its
pieces. It serves its customers well, it cares for
its employees, it is part of the community inwhich it operates and these strengths create
the foundation for success with shareholders.

These and other initiatives give us confidence
that we will achieve our stated targets.

So in taking our corporations forward, weneed to think of advancing not a company
but a community. This means a very different
agenda for companies going forward andparticularly for ANZ in the years to come.

Sustainability involves a longer-term focus
To be successful long-term, our focus cannot
exclusively be on today, but also on thelonger-term. Winners, over time, will not be
those who maximise short-term results, but
those who invest wisely to produce superior
returns tomorrow. Companies neverthelessneed to produce reasonable results in the
short-term to survive, while they pursue
their long run ambitions.
The highest performing companies are notsimply a financial construction of land, labour04

Beyond this, a truly successful company isalso a community that is interdependent
with other communities. It takes on thecharacteristics of those it engages with and,in turn, influences them.

John McFarlane
chief executive officer

chief executive officer’s report05

ANZ3843 SForm_FA 2.11.qx

3/11/05

12:29 PM

Page 8PERFORMANCE OF OUR
MAJOR DIVISIONS (NPAT $m)
Australia

923

857

Middle East &South Asia

883

Asia – NPAT $98m

Pacific
American Samoa
Cook Islands
East TimorFiji
Kiribati
Papua New Guinea
Samoa
Solomon Islands
Tonga
Vanuatu

Asia
Cambodia
China
Hong Kong
Indonesia
Japan
Korea
Malaysia
Philippines
Singapore
TaiwanThailand
Vietnam

1013

New Zealand

Other – NPAT $147m

04 05

Europe15%

Personal

8%

04 05

Institutional

United Kingdom
United Statesof America
341

513

Pacific – NPAT $86m
04 05

20%

New ZealandBusinesses

06

143

Our domestic markets, Australia and New Zealand, are the most significant
contributors to our performance, comprising 89% of our 2005 profit.
Our focus on these markets is evidenced by fact that 89% of our staff
and 94% of our points of representation reside in these geographies.

04 05

14%

Asia Pacific
Business

159

95

OUR BUSINESS PERFORMANCEDOMESTIC FOCUS, INTERNATIONAL PRESENCE

10%
04 05

Corporate111

New Zealand – NPAT $528m

376

614

Australia – NPAT $2,159m

04 05

11%

Esanda and UDC

our business performance07

ANZ3843 SForm_FA 2.11.qx

3/11/05

12:29 PM

Page 10FIVE YEAR SUMMARY

Strong lending growth partly offset by lower interest margins.

3,833
2,573
(3,092)
3,314
(531)
(911)
(2)

Net profit after tax

3,018

2,815

2,348

2,322

1,870
01

15.3%
26,54485c$16.8826.2%
23,78373c$15.28Other information
Points of representation6
No. of employees (full time equivalents)
No. of shareholders

1,223
30,976
263,467

1,190
28,755
252,072

1,019
23,137
223,545

1,018
22,482
198,716

1,056
22,501
181,667

We continue to have world class efficiency which has permitted us to invest in more people.

1 Data for 2001 include the consolidation of assets in the statutory funds of ANZ Life. Data for 2004 include the consolidation of assets in thestatutory funds of NBNZ Life Insurance Limited
2 Excludes significant items, NBNZ incremental integration costs and outside equity interests
3 For the periods 2001 and 2002 the return on average ordinary equity calculation accrues the dividend over the year. From 2003, dividends
may no longer be accrued and as such are not included in the calculation of return on average ordinary equity
4 Excludes goodwill amortisation, abnormals, significant items and NBNZ incremental integration costs
5 Periods prior to 2004 adjusted for the bonus elements of the November 2003 Rights Issue
6 Includes branches, offices, representative offices and agencies

01

02

03

04

05

1

Cost to Income (CTI) %Significant investment in the sustainability ofthe business in 2005 saw the cost to income
ratio increase slightly. We have set a target of
reducing the CTI to 40%.

01

02

03

04

30976

6.7%
27,31495c$17.1705

Increased competition in New ZealandMortgages and the Institutional Division were
the key drivers behind the 14 basis point Net
Interest Margin contraction in 2005.

28755

17.0%
34,586101c$19.02

04

Continued strong lending growth in Australia
and New Zealand, driven largely by Mortgages
and Institutional, saw Net Lending Assets up
12% in 2005.

23137

32.6%
43,834110c$24.0003

22482

Shareholder value – ordinary shares
Total return to shareholders(share price movement plus dividends)
Market capitalisation
Dividend
Share price5 –30 Sep

02

22501

185,493
10,551
7.5%
20.2%
1.1%
48.0%

01

Net Interest Margin (bps)45.6

183,105
11,465
7.9%
21.6%
1.3%
46.0%

05

45.3

195,591
13,787
7.7%
20.6%
1.2%
45.1%

04

45.1

259,345
17,925
6.9%
17.8%
1.1%
45.3%

03

46.0

293,185
19,488
6.9%
17.5%
1.1%
45.6%

02

Net Loans and Advances
including Acceptances ($b)

48.0

Financial Position
Assets1
Net Assets
Tier 1 capital ratio
Return on average ordinary equity2,3
Return on average assets2
Cost to income ratio4

235

4,018
2,970
(2,905)
4,083
(860)
(898)
(3)

249

4,311
2,808
(3,228)
3,891
(614)
(926)
(3)

267

5,254
3,391
(4,026)
4,619(632)(1,168)
(4)

277

5,798
3,552
(4,515)
4,835(580)(1,234)(3)

277

Financial Performanceancial Performance
Net interest income
Other operating income
Operating expenses
Profit before tax, debt provision
Provision for doubtful debts
Income tax expense
Outside equity interests

244.4

2001
$m
217.4

2002
$m

162.6

2003
$m

145.9

2004
$m

138.0

2005
$m

05

Staff (Full Time Equivalent)Over 3,000 new staff employed in the last
18 months across the business. Approximately
70% of new FTEs are in frontline, revenue
generating roles.

1 Excludes goodwill amortisation, significant items and NBNZ
incremental integration costs.

08

five year summary09

ANZ3843 SForm_FA 2.11.qx

3/11/05

12:30 PM

Page 12

THE BOARD OF DIRECTORSSTRATEGIC DIRECTION AND EXPERIENCE

MR C B GOODE, AC

DR R S DEANE

MS M A JACKSON, AC

b com (hons) (melb), mba (columbia university,
new york), hon lld (melb), hon lld (monash)
Chairman & Independent Non-Executive Director
Non-executive director since July 1991. Mr Goode
was appointed Chairman in August 1995 and is
an ex officio member of all Board Committees.
Experience and expertise
Mr Goode has a background in the finance industry
and has been a professional non-executive director
since 1989. He brings a wide range of skills andsignificant experience of the finance industry to hisrole as Chairman of the Board.
Age 67. Residence Melbourne.

phd, b com (hons), fca, fcis, fnzim
Independent Non-Executive Director
Chairman of ANZ National Bank Limitedin New ZealandNon-executive director since September 1994.
Dr Deane is a member of the Compensation & Human
Resources Committee and the Technology Committee.

b ec, mba, hon lld, faicd, fca
Independent Non-Executive Director
Chairman of the Compensation & Human
Resources Committee

MR J MCFARLANEMr C B Goode
Mr J McFarlane
Dr G J Clark

Dr R S Deane
Mr J K Ellis
Mr D M Gonski

Ms M A Jackson
Mr D E Meiklejohn
Mr J P Morschelma, mba
Chief Executive Officer
Chief Executive Officer since October 1997.
Mr McFarlane is also a Director of ANZ National
Bank Limited in New Zealand.
Experience and expertise
Mr McFarlane brings broad leadership, management
and banking skills following a 30-year career inbanking. Mr McFarlane is a former Group Executive
Director, Standard Chartered Plc, Head of Citibank,
United Kingdom and Managing Director, Citicorp
Investment Bank Ltd.
Age 58. Residence Melbourne.

DR G J CLARK
phd, bsc (hons)
Independent Non-Executive Director
Chairman of the Technology Committee
Non-executive director since February 2004. Dr Clark
is a member of the Nominations, Governance &Corporate Responsibility Committee.
Experience and expertise
Dr Clark is Principal of Clark Capital Partners, a US
based firm that advises internationally on technology
and the technology market place. Previously he held
senior executive positions in IBM, News Corporationand Loral Space and Communications. He brings to
the Board international business experience and a
distinguished career in micro-electronics, computing
and communications.
Age 62. Based in New York, United States ofAmerica but also resides in Sydney.
10

Experience and expertise
Dr Deane has skills and experience across a variety
of sectors including government, banking andfinance, economics, and telecommunications, andalso with charitable and cultural organisations.
Age 64. Residence Wellington, New Zealand.

MR J K ELLIS
ma (oxon), faicd, hon fie aust, fausimm,
ftse, hon dr eng (cqu)Independent Non-Executive Director
Chairman of the Risk Management Committee
Non-executive director since October 1995.
Mr Ellis is a member of the Audit Committee.
Experience and expertise
A trained engineer, Mr Ellis brings to the Board
his analytical skills together with his practicalunderstanding of operational issues, investments
and acquisitions across a range of sectors including
natural resources, manufacturing, biotechnology
and education.
Age 68. Residence Melbourne.

Non-executive director since March 1994.
Ms Jackson is a member of the Audit Committee.
Experience and expertise
A Chartered Accountant, with significant financial
expertise, Ms Jackson has broad industrial experience
including her involvement in transportation, mining,the media, manufacturing and insurance. This
expertise coupled with her work in health andeducation contribute to her role on the Board.
Age 52. Residence Melbourne.

MR D E MEIKLEJOHN
b com, dip. ed, fcpa, faicd, faim
Independent Non-Executive Director
Chairman of the Audit Committee
Non-executive director since October 2004.
Mr Meiklejohn is a member of the Nominations,
Governance & Corporate Responsibility Committee.
Experience and expertise
Mr Meiklejohn has a strong background in financeand accounting. He also brings to the Board his
experience across a number of directorships of major
Australian companies spanning a range of industries.
Age 63. Residence Melbourne.

MR J P MORSCHELMR D M GONSKI, AO
b com, llb, s.i.a. (aff), faicd, fcpa
Independent Non-Executive Director
Chairman of the Nominations, Governance& Corporate Responsibility Committee
Non-executive director since February 2002.
Mr Gonski is a member of the Risk
Management Committee.
Experience and expertise
A lawyer, Mr Gonski has a broad experience acrossbusiness, the law and investment banking. He also
brings to his role on the Board an appreciation forthe community through his work in the arts and thenot-for-profit sector.
Age 52. Residence Sydney.

dipqS, faim
Independent Non-Executive Director
Non-executive director since October 2004.
Mr Morschel is a member of the Risk Management
Committee and the Compensation & Human
Resources Committee.
Experience and expertise
Mr Morschel has a strong background in banking
and financial services, and brings the experienceof being a director of major Australian andinternational companies.
Age 62. Residence Sydney.
Visit our website at www.anz.com for listingsof current directorships.
the board of directors

11

ANZ3843 SForm_FA 2.11.qx

3/11/05

12:30 PM

Page 14PEOPLE, COMMUNITY AND THE ENVIRONMENTINSPIRING, ENERGISING AND BUILDING RELATIONSHIPSDIRECTOR AND EXECUTIVE REMUNERATION 2005
Primary

Post
Employment

Amortised
Equity

Total

$

$

$

$

Director Remuneration

Our commmunity investment strategy focuses on enhancing the well-being andprosperity of the communities where our people live and work, and where our business
operates. Earning the trust of the community is one of our core values.

C B Goode
Independent Non-Executive Director – Chairman

500,000

255,007–755,007

G J Clark
Independent Non Executive Director

155,440

61,912–

217,352

PeopleCommunity

We introduced a new policy giving employees
who are 55 years and older the right to moveto a part time working arrangement if theychoose, and we doubled maternity/parental
leave to 12 weeks fully paid, with no minimum
service requirements to qualify.

We continued our long term commitment toimproving the financial literacy and inclusionof adult Australians. For example, our Saver Plus
program assisted more than 700 low-income
families to develop a long-term savings habit,
improve their financial knowledge and savefor their children’s education. As part of the
program, ANZ provided funds to match morethan $800,000 saved by participantsin the 2004 and 2005 programs.

J C Dahlsen (retired February 2005)
Independent Non Executive Director

63,226

115,726–

178,952R S Deane
Independent Non Executive Director

270,00260,892–

330,894

J K Ellis
Independent Non Executive Director

172,250

122,704–

294,954

D M Gonski
Independent Non Executive Director

174,662

115,724–

290,386

M A Jackson
Independent Non-Executive Director

172,250

133,731–305,981

D E Meiklejohn
Independent Non Executive Director

161,027

76,504–

237,531

J P Morschel
Independent Non Executive Director

149,500

72,182–

221,682

B W Scott (retired April 2005)
Independent Non Executive Director

118,607

133,892–

252,499

Total Non Executive Directors

1,936,964

1,148,274–

3,085,238

J McFarlane
Chief Executive Officer – Executive Director

4,018,217

417,000

2,774,705

7,209,922

Total of all Directors

5,955,181

1,565,274

Sir J Anderson
Chief Executive & Director,
ANZ National Bank Ltd

1,299,070

117,178

477,452

1,893,700

Dr R J Edgar
Chief Operating Officer

1,569,905

48,472

993,472

2,611,849

E Funke KupperGroup Managing Director Asia-Pacific

1,442,687

40,950645,515

2,129,152

2,774,705 10,295,160

More than 21,000 staff have now experienced
our Breakout cultural transformation workshops.
When the Breakout program began, ourpeople cited ‘Cost Reduction’ and ‘Profit’
as the top two values most evident in our
culture. Today they are ‘Customer Focus’and ‘Community Involvement’.
As a result of these and other initiatives,
ANZ has the highest level of employee
engagement among large employers and all
major banks in Australia and New Zealandaccording to the globally recognised Hewitt
Best Employers survey.

Specified Executives

B C Hartzer
Group Managing Director Personal

1,855,446

46,800670,1312,572,377

G K Hodges
Group Managing Director Corporate

1,569,161

42,473536,834

2,148,468

P R Marriott
Chief Financial Officer

1,688,399

46,800820,875

2,556,074

S TargettGroup Managing Director Institutional

1,648,474

46,800868,8412,564,115

Total Specified Executives

11,073,142

389,473

5,013,120

16,475,735

12This year 18% of Australian staff contributed
more than 24,000 hours as part of our ANZ’s
Volunteers program, which provides employeeswith eight hours leave each year to complete
volunteering activities of their choice.
Some 28% of our Australian staff donatedmoney to numerous community partners throughour Community Giving program, where ANZmatches staff contributions dollar-for-dollar
up to $1,000 per person. This was achievedprincipally through staff donations to the
Tsunami relief efforts, where ANZ and its people
donated $1 million to support the work ofWorld Vision.

Environment
We upgraded our Environment Charter todrive improvements in our environmental
performance and outcomes and developeda Stewardship Model for assessing andmanaging the environmental and social
responsibilities in our Institutional andInvestment Banking decisions.

We have also developed a Sustainable
Procurement policy, which will be introduced
over the coming months in collaboration with
our key suppliers. The policy will guide theselection and evaluation of suppliers on thebasis of environmental and social indicators
consistent with ANZ’s Environmental Charter.

people, community and the environment

13

ANZ3843 SForm_FA 2.11.qx

3/11/05

12:30 PM

Page 16

HANDY CONTACTS
ANZ
Registered Office
Level 6, 100 Queen Street
Melbourne VIC 3000 Australia
Telephone +613 9273 6141
Facsimile +613 9273 6142
Company Secretary: Tim L’Estrange
Investor Relations
Level 22, 100 Queen Street
Melbourne VIC 3000 Australia
Telephone +613 9273 6466Facsimile +613 9273 4899
investor.relations@anz.com
Share Registry
australia
GPO Box 2975
Melbourne VIC 3001 Australia
Telephone 1800 11 33 99 / +613 9415 4010
Facsimile +613 9473 2500
anzshareregistry@computershare.com.au
new zealand
Private Bag 92119
Auckland 1020 New Zealand
Telephone 0800 174 007
Facsimile +649 488 8787
united kingdom
PO Box 82
The Pavilions
Bridgewater Road
Bristol BS99 7NH
Telephone +44 870 702 0000
Facsimile +44 870 703 6101

IMPORTANT DATES FOR SHAREHOLDERS*
Date

Event

16 December 2005

Annual General Meeting
Adelaide

16 December 2005

Final Dividend Payment

27 April 2006

Interim Results Announced

15 May 2006

Interim Dividend Ex-Date

19 May 2006

Interim Dividend Record Date

3 July 2006

Interim Dividend Payment

26 October 2006

Annual Results Announced

9 November 2006

Final Dividend Ex-Date

15 November 2006

Final Dividend Record Date

15 December 2006

Final Dividend Payment

15 December 2006

Annual General Meeting
Sydney* If there are any changes to these dates, the Australian Stock Exchange

will be notified accordingly

Australia and New Zealand Banking Group Limited
www.anz.com ABN 11 005 357 522