creating the bank oftomorrow

today

2002 Annual ReportDifferent
Chairman’s Report 06
Chief Executive Officer’s Report 07
Personal 08
Corporate 10
Community 12
Culture 14
Growth 16

EnergySenior Management 20
Overview 22
Chief Financial Officer’s Review 23
Business Overview 26
Business Reports 28
Where we are 32

Integrity
Corporate Governance 36
Risk Management 38
Environmental Report 40
Customer Service Charter 41
Corporate Governance Statement 42
Board of Directors 46
Guide to the Financial Report 48
Concise Financial Report 49

ANZ is a leading banking
and financial services group.
With total assets of$183 billion, ANZ takes its
place among the top 100
banks in the world.
2002 Results*

ProfitReturnon Equity

Cost
to IncomeRatio

15.9% 16.7% 16.4% 21.6%

46%

Net Profit has increased
by 15.9% to $2168m

Earnings
Per Share

EPS has increased
by 16.7% to $1.37
per share

ANZ is headquartered in Melbourne, where it first
opened an office as the Bank of Australasia in
1835. ANZ’s primary markets are Australia
and New Zealand as well as Asia, the Pacific,
UK/Europe and the United States. ANZ operates
a series of specialist businesses. Its key
businesses are: Personal Banking & WealthManagement, Consumer Finance, Small to Medium
Business, Mortgages, Asset Finance, Corporate
Businesses and ANZ Investment Banking.

Dividend

Dividend per share
increased by 16.4%
to $0.85 (fully franked)

ROE has increased
from 20.2% to 21.6%*excluding significant transactions during year ended
30 September 2002: the sale of businesses to ING joint
venture (profit after tax of $170m), National Housing Bank
recovery ($159m profit after tax) and special general provision
for doubtful debts ($175m charge after tax). Including
significant transactions, the net profit was $2322m,
up 24% on 2001, and EPS was $1.47.

Cost to income ratio
has decreased
from 48% to 46%

01different

“We set ourselves the challenge
to create a very different bankat ANZ.

04
05

Different by performing forshareholders, different by serving
our customers well, different by
being a good corporate citizenin the community, and different
in the way we lead and inspire
our people.
We have made progress in thepast five years, but we still havea good way to go as we move tobuild further on our performanceand develop future growth.”
John McFarlane, Chief Executive Officer

Chairman’s Report

2002 was a strong year for ANZ.
The result was achieved in an environment where
the Australian and New Zealand economies
performed well notwithstanding subdued world
economic activity and several major corporate
collapses internationally.

Our 2002
performancesets us apart.

Performance
In the year ended 30 September 2002, the net
operating profit after tax increased by 24% toa record $2322 million. The result was impacted
by three significant transactions as follows:> The sale of businesses to ING joint venture(profit after tax of $170m)> National Housing Bank recovery($159m profit after tax)
> Special general provision for doubtful debts($175m charge after tax)
Excluding these significant transactions, profit after
tax increased 15.9% to $2168 million. Earnings per
share grew by 16.7% to $1.37 and the dividend pershare was increased by 12 cents to 85 cents per
share fully franked.
Our return on ordinary shareholders’ equity at
21.6% is above our 20% target while our cost to
income ratio of 46% achieved our mid 40s target
and was the lowest cost to income ratio amongmajor Australian banks. Our Tier One capital ratio
was solid at 7.9%.
Market Recognition
Our consistent performance is being recognisedin our share price, which has performed well
despite considerable weakness in equity markets.
Our achievements were also recognised by Fortune
magazine in September 2002 when it selected
ANZ as one of 40 stocks to invest in for retirement,
one of only five non–US companies and the only
Australian stock.
Clear Focus
During the year, the strategy of organising the bankinto 17 businesses achieved strong overall results
and enhanced our focus on risk management.
Customers benefited from a range of initiatives
including new lower cost transaction accounts
and improvements to services.
In May, a new wealth management joint venture
was established with the ING Group. ING is one of
the world’s leading Bancassurance Groups with$800 billion of assets under management. The joint
venture created a top–tier company in funds
management and life insurance in Australia and
New Zealand and filled a strategic gap for ANZ in
the high growth wealth management sector.
ANZ made a capital contribution of $960 million
to the new organisation.

In January, ANZ settled the long–standing
litigation with the National Housing Bank in India.
The settlement enabled us to recover $248 millionof the provision we made when ANZ sold Grindlays
Bank to Standard Chartered PLC in 2000.
Leadership Culture
Most importantly, we continued to give highpriority to our program to create a distinctive
ANZ culture. This program reinforces a strong
performance culture among our staff, creating a
sense of entrepreneurial freedom balanced withresponsibility, shared values and an increasing
focus on customers and the community.
GovernanceDuring the year, the Board undertook a review ofgovernance procedures to strengthen further ANZ’sstandards of corporate governance, disclosure andtransparency. These included a new policy covering
ANZ’s relationship with its auditor.
Executive Options
We have also taken note of the community
debate on the use of options as part of executive
remuneration. Options are not a dominant formof compensation at ANZ. The Board believes
options can provide valuable incentives if the sizeof option packages is appropriate, and if hurdles
set are challenging and aligned with shareholders’interests. We have taken an in–principle decision
to expense options in the year they are granted andwe will implement this change as soon as the tax
and Australian Accounting Standards implications
are clarified.
The Board
On 7 February 2002, Mr David Gonski joined the
ANZ Board. Mr Gonski is Chairman of Coca–Cola
Amatil and a Director of Westfield Holdings Limited
and John Fairfax Holdings Limited. Mr Gonski brings
valuable financial skills and a broad range ofbusiness experience and community service.
Growth and Potential
Management and staff are to be congratulated
for consistently delivering a high level of financial
performance to shareholders, improving our service
to customers and deepening our relationship withthe community, while at the same time providing an
increased focus on growth.
In the year ahead, we expect the Australian and
New Zealand economies to continue to perform
relatively well and for overseas markets to begin
to strengthen from their low base. Loan losses tend
to lag the economic cycle and these are expected
to remain moderate to high, although at levels
which are manageable. We also see opportunities tobuild on our consistent performance and distinctive
strategy and move closer towards realising ANZ’sfull potential.

Charles Goode
Chairman

06
07

Chief Executive
Officer’s Report
For our shareholders, 2002 was a good year,
but one with challenges. We have met thosechallenges head on and still kept our promises
to our shareholders, our customers, our staff
and the community.

Five years ago
we decided
to create a very
different bank.

Our performance has been built on ANZ’s
distinctive strengths: the quality of our people,
a strong culture, a diverse portfolio of specialised
businesses and a constant focus on creating a
low risk, sustainable business.
Shareholders who have watched our performancegoing back to the early 1990s will know it hasn’t
always been that way.
Key Decisions
Five years ago we took the decision to change ANZ.
We needed to. While we had stabilised andrecovered from the depths of the recession of five
years before, we had lost the confidence of many
investors and it showed in our share price.
So we took three fundamental decisions:> We shifted away from a dependence on higher
risk businesses including those in international
emerging markets, toward lower risk, moresustainable consumer businesses. In 1997,
personal businesses accounted for just 36%
of ANZ’s earnings. Today they account for
approximately 55%> We transformed our cost structure throughdeveloping the right technology and enabling
our processes to become leaner and morecompetitive. In 1997, we had the lowest
productivity among the major Australianbanks with a cost to income ratio of 63%.
Today we are the industry leader with a cost
to income ratio of 46%> We recognised that our long-term competitive
strength rests with our people. We began thework to revitalise our culture, releasing theenergy and passion of our people, enablingthem to deliver more consistently andproductively for shareholders, customers
and the rest of the community. In 1999,
52% of our people were satisfied working
at ANZ. Today that figure is 78%
Leading Change
While improving financial performance is criticalto our ability to attract capital, changing theculture is critical to creating our future. In 1997,
most customers, investors, members of thecommunity and our staff thought the major
Australian banks were the same. We saw a realopportunity, an attractive opportunity, for ANZ if
we could breakout from the pack. Firstly, wereconceived ANZ as a collection of specialised
businesses. This strategy has eliminated much of
the bureaucracy that got in the way of our staff
serving our customers. It has given them more ofa feeling that they own the business. It has given
them more freedom and the opportunity to be
more creative. At the same time, it has made therisks and results of their business very transparent
to us and to you the owners.

You can now see that the financial results
show a consistent level of delivery. Secondly,
from the customer satisfaction survey results
published in this report, you can also see
emerging improvements on this dimension,even though there is still much to do.
Challenges – Past and Present
Of course, we have had to face some difficult
issues. Losses in emerging market bond tradingin 1998 and managing an exposure to Asianmarkets of almost US$11.5 billion at the heightof the Asian crisis in the years following 1997
are examples.
We contained the impact of these issues, exiting
businesses and dramatically reducing our higher
risk exposures.
During that time, our focus was on improving ANZ’sfinancial performance and restoring the confidenceof our investors. But we did not focus enoughattention on service to our personal customers
and on our reputation in the community. We havelearned our lesson. Restoring the faith of ourcustomers is now at the top of our agenda but thejourney has only just begun. We have standards toassess how we serve customers, and we havea clear view on how we should serve them in the
future. We are very serious about making
a difference here.
Looking Ahead
Over the next five years, our challenge is tomaintain our high levels of performance and,at the same time, to take ANZ to the next level forshareholders, staff, customers and the community
by reinventing the way we do business.
It’s only when we achieve such a balance that
we will be able to stand up and be truly proudof our achievements.
The next stage of our growth will be based toa far greater extent on growing our revenue andcustomer base sustainably.
To do that we will invest in higher growth
opportunities mainly in consumer banking,wealth management, small business, corporatebanking and related services including asset
finance, and non–asset based corporate activities.
Internationally, we will consider lower risk
moderately sized growth options in the Pacificand possibly in Asia as a foundation for
longer–term growth.
We believe we now have the foundation to meetthese challenges as we seek to create the bankof tomorrow, today.

John McFarlane
Chief Executive Officer

Our aim is todeliverdistinctive customer service.

Making a difference each day with individual

customers

and local communities.

Noah and Lilly don’t know it, but their mother,
Gabrielle is discussing investment options with
ANZ’s Wendy Shaw,that will protect their futurefinancial security.

We know service to ourpersonal customers has
to improve. Something
has to change. It’s us.

It is hard for a bank or any other large organisation
to change its approach to customer service.
Becoming customer–focused involves thinking
very differently. In our case, we have to change theway we deal with customers so they actually feelthey have had a different experience. Customers
need to believe we are really part of theircommunity. Easy to write in an annual report; hard
to make happen. What it means for us is a total
rethink and refresh. But we have started in earnest
and are seeing some early results.
To start the change, we introduced simplified
accounts, reduced day–to–day banking fees andfocused on delivering the promises we made in
our Customer Charter. We have also appointed
a Customer Advocate to ensure satisfactory
resolution of customer issues and complaints.
This is just the beginning.
During the year, we began a program called
Restoring Customer Faith in Victoria and New
Zealand. In 2003, we will introduce it throughout
the rest of Australia making special efforts in rural
Australia to rebuild our presence.

Personal

08
09

Restoring Customer Faith changes our consumer
banking business into small, community–based
businesses, each with a Local CEO. We want staff
in each branch to think of it as their own business,to treat customers as if our future depends on it
and to become a real part of the community.
We are investing to make this work. We areupgrading branch premises, delivering additional
training programs to our people and allowing them
the flexibility to make business judgements
regarding staffing numbers and deployment,
and ways to improve service.
So far the results are encouraging. Both customer
and staff satisfaction are improving. We areretaining more of our existing customers andattracting new ones. This is underpinning
improved business performance. We are now
seeing branches as places where we can growrevenue, increase customer numbers and create
real value for our shareholders. It’s early days
but we are committed to getting it right.

We have won industry
accolades this year for
the quality of our banking
services to businesses
and corporates. And weare seeking to raise thebar higher.

Market research among medium–sizedcorporations and large business institutions
indicate that, of the major Australian banks, ANZ
has again rated number one in overall customer
satisfaction and market share in 2002.
ANZ is the lead banker to 37% of Australia’s
large corporations. In the middle market, we are
the primary banker to 26% of businesses.
This isn’t something we take for granted.
Businesses are demanding in the service they
expect. Maintaining our leadership position
requires continual focus on understanding ourclients’ businesses, providing them with creativeideas and solutions, and delivering specialist
products and services to meet their needs.

During the year, we have extended our range
of investment banking solutions available tomedium–sized corporate clients. We havecontinued the development of new electronic
platforms to better support client enquiries
and product delivery. The Corporate Portal
launch during 2002 provides clients witha range of on–line services including foreignexchange, capital markets and trade financetogether with financial decision–making tools.
Satisfying clients also requires a great team of
dedicated people. Strengthening the capabilitiesof our people has been a priority this year.
Staff satisfaction is among the highest in theGroup, reflecting a long–term focus on developing
our culture and the expertise of our people.
This has been supported by our relationshipmanagement systems which allow
us to anticipate needs, proactively identify
opportunities and develop creative solutions
for clients.
The strength of our franchise among medium–sized
and large corporations, together with high levelsof client satisfaction, create a powerful combination
to reshape the business around client needs andto create growth.

Corporate

Maureen and Tony have been banking with
ANZ since their first trek in Nepal in 1982.
The journey continues, as Lonely Planet is now
the largest selling travel guide in Australia.

leadin the business market.

We

It’s about listening,

anticipating needs andinnovating

to stay ahead.

We are determined torecapturesomething banks have lost.
The

trust
of the community.

Sharyne’s future looks a whole lot brighter.
Shane Teitz from the ANZ Mortgages Groupdiscusses the progress of her new ‘Habitatfor Humanity’ home.

Incremental change is
not enough to recapturecommunity confidence
in banks. ANZ is taking
steps to begin to makea real difference.

We are taking seriously the job of reconnectingwith the community and regaining trust. Overthe past 10 years, people have increasingly feltthat banks have become detached from thecommunity. In recent years, we’ve tried toreconnect. In 1999, we decided not to leave any
more rural communities. In 2001, we put in place
new low–cost banking options for senior citizens
and welfare recipients. We are giving our people
the freedom to contribute more to their local
community through paid volunteering leave andfinancial support from the ANZ Community Fund.

12
13

During the year under review, we supported a wide
range of community programs including:> Australia and New Zealand Intensive Care Appeal> Royal Life Saving Society’s Wet ‘n Wise Program> Foodbank Australia> Habitat for Humanity> Victorian Credit Helpline> Foundation for Rural and Regional Renewal> ANZ DOXA Youth Foundation Cadetship

Reconnecting with the community is not only
about giving money. It’s about creating genuine
business–community partnerships. The ANZ
Community Fund was established in 2002 to create
a new way of involving ourselves in the community.
It achieves its aim by placing the responsibility fora large part of ANZ’s community “giving” at a local
level. It enables the people in our branches tocreate meaningful partnerships, to strengthen andenhance life in the communities where they live
and work.

> Hollingworth Cadetship Program
We are creating new types of programs that havea direct link to our business in financial services.
During the year, we started a major research
program on financial literacy. The aim is toestablish a strong basis for new financial education
programs to provide more opportunities forindividuals to learn about managing their finances.
We also entered into a partnership with theBrotherhood of St Lawrence to run a matchedsavings program. This will see ANZ match ‘2 for 1’
each dollar saved by low income families foreducation costs.
We expect this increased level of connection withthe community to gain further momentum with awide range of new initiatives planned for 2003.

Community

Leadership,

The future is about
freedom and responsibility.

energy & passionof our people.

We’re releasing theJoe Farrugia, Local CEO, for the Moonee Ponds
area, draws new talents out of Jim Hudaverdi
and Monica Rashoo, part of his local team.

Our people now havegreater flexibility to deal with
their customers, bringing
to bear closer knowledge
and understanding of
their needs.

When we created the specialisation strategy two
years ago, we knew it would only work if we could
create a different culture. A culture where people
had a sense of ownership. A culture where people
talked about ‘we’ rather than ‘they’. We wanted
people to be employed to make more decisions
and to take responsibility for them. We wanted
them to bring a human face to the demanding
decisions that need to be made in banking.
If we could achieve this successfully, we could turnour culture into a unique and competitive asset.
One of the starting points was to encourage
our staff to own shares in ANZ. This helps themto think and act like owners so they care more
about their customers and about creating value
for shareholders.
We have also taken steps to assist our people
outside work. These include extending our
PCs@home offer to staff, providing them withheavily subsidised PCs for use at home;
the introduction of paternity leave to assist
staff with new families; and providing paid
leave for volunteer work in the community.
We knew the only way a large company like ANZ
could change quickly and successfully was to
involve all our people in a new way of thinking
about the business. A unique thread of sharedvalues would allow us to function collectively
as one company and individually as specialist
businesses at the same time.

Culture14
15

Over the last two years, more than 6,000 of ourpeople have participated in a culturaltransformation program called Breakout. In 2003,
an additional 6,000 people will take part. Breakoutemphasises leadership, diversity, coaching anddevelopment. It provides a framework for creating
more challenging and rewarding jobs for our people.
The creation of many individual businesses within
ANZ, and the removal of bureaucracy and layers ofmanagement, gives more responsibility to people
to recognise customers’ needs and develop thesebusinesses. In 1997, we had as many as ninelayers of management between the Chief Executive
Officer and front–line staff who serve customers,
today there are just four.
We are committed to developing and sustaining the
new ANZ culture. It is showing in the commitment
and engagement of our people. This year in ourannual staff survey 78% of staff indicated they
are satisfied working with ANZ and 71% would
recommend ANZ as a place to work. Three years
ago only 52% of our staff said they were satisfied
working with ANZ.
We want ANZ to be a place where people canachieve more than they thought they could
and in the process, help turn ANZ into thebank of tomorrow, today.

Our challenge is to buildon the foundation ofstrong,consistent financial
performance and take ANZ
to a new level. One basedon growing our revenue
and customer base at
low risk.

Central to our growth strategy is a renewed focus
on specialisation and transformation.
While our specialisation strategy has beena critical part of our success, we are also different
in the way we implement this strategy. There isoften a big gap between strategy and execution
and we need to make sure all our core businesses
are out–performing competitors. We are reshaping
our portfolio of businesses by investing in higher
growth areas, extending and developing our
specialist capabilities and moving out of weakand non–core positions.
We will build on our financial performanceby investing in our domestic consumer, small
business and corporate franchise and by pursuing
opportunities in the Asia–Pacific region.
We have taken some early steps:> Our investment in the Restoring Customer Faith
Program in personal banking has helped us
retain more of our existing customers and attract
substantial numbers of new customers
Openings of transaction accounts are up 100%on an annualised basis since we introduced
simpler, lower cost options in February 2002.
Customer satisfaction is steadily improving> We established a new wealth management joint
venture with the ING Group in May 2002,
creating a new force in funds management andlife insurance in Australia and New Zealand.
This is an exciting development that fills a
strategic gap for ANZ in wealth management
Wealth management is one of the fastest growing
areas of financial services. Australians and New
Zealanders are increasingly focused on wealthgeneration and protection and the need to fundtheir retirement

GrowthThe joint venture is one of the leaders in wealthmanagement in Australia and New Zealand.
ING Australia provides customers with a wider
range of products, services and advice througheither ANZ or a network of 6,000 professional
financial advisers
We have a goal to triple annual investment
inflows by 2005 through aligning distribution
with customer needs, expanding our sales forceof qualified financial planners and using theimproved range of products and investment funds
offered by ING Australia> We are continuing to reinvigorate and invest
in our small business franchise. Significant
improvements to customer services, further
investment in training and increased geographicalcoverage and industry specialisation areproviding a good platform for growth in ourmarket position> ANZ has a leading position as a banker to both
medium–sized andlargecorporations in Australia.
We were rated #1 in overall satisfaction bycorporate customers.The strength of our franchiseand capability of our people creates a strong
foundation for further growth through continuing
to meet the evolving needs of our clients> We are exploring options for longer–term growthin our region, primarily in personal financial
services. We have expanded our presence in the
Pacific with the acquisition of the Bank of Hawaii
operations in Papua New Guinea, Vanuatu andFiji. We have an 11% stake (with an option toincrease to 29%) in Indonesia’s tenth largest
bank, Panin Bank, and contribute technicalassistance on strategic, technology and credit
issues. We are also exploring opportunities formodest, low risk expansion elsewhere in Asiaand the Pacific to develop options for longer
term growth

At 7.46am the journey ahead for ANZ is clear.
There is an opportunity to serve more personal customers.

Ourchallenge is to take ANZ

growthand attracting

to a new level by investing in

more customers.

ene

rgy

Senior Management
Left to rightDavid Boyles
Chief Operations Officer

Elizabeth ProustManaging Director,
Asset FinancePeter Hawkins
Group Managing Director,
Group Strategic Development

John McFarlane
Chief Executive Officer

Elmer Funke KupperManaging Director,
Personal Banking and
Wealth Management

Grahame Miller
Managing Director,
ANZ Investment Bank

Roger DavisGroup Managing Director,
Customer Origination

performance

Transforming our financial
is creating the foundation
andculturefor tomorrow’s bank.

20
21Peter Marriott
Chief Financial Officer

Mark Lawrence
Chief Risk Officer

Shane Freeman
Group General Manager,
People Capital

People are increasingly
seeing that ANZ is different.
We are more actively focusedon attracting and retaining
talented people than everbefore. And we want todeepen our relationship withcustomers and the community.

Brian Hartzer
Managing Director,
Consumer Finance

Bob Edgar
Managing Director,
Corporate Businesses

2002 was a challenging but successful year for
ANZ. Earnings grew after tax by 15.9% to $2168
million*. Earnings per share increased by 16.7%*.
This continues the more consistent level of
performance for shareholders established in recent
years. Since 1999, profit has grown at 13.6%* perannum. Return on equity has increased by four
percentage points to 21.6%* and the cost to
income ratio has been reduced to 46%*.

Greg Camm
Managing Director,
Mortgages

We know performance means more than our
financial results. ANZ is committed to making
a difference, not just for the benefit of shareholders
but also for our customers, staff and thewider community.

We have built our performance momentum
around three main themes:> Strengthened accountability and focus withstretch targets and rewards> Divesting activities with poor returns while
reducing overall risk
> Keeping costs tight while growing revenue*excluding significant transactions during year ended
30 September 2002: the sale of businesses to ING joint
venture (profit after tax of $170m), National Housing Bank
recovery ($159m profit after tax) and special general provision
for doubtful debts ($175m charge after tax). Including
significant transactions, the net profit was $2322m.

Overview

Vision - The Bank with the Human Face

Performance

Customers

During 2002, we undertook the following
major customer initiatives:> Restoring Customer Faith program> Appointment of Customer Advocate> Simplified fee structure> New Access accounts

Put our customers first

Provide flawless,front-to-backserviceBreak into a
portfolio ofcustomerbusinesses

Restoring
Customer
Faith

Formulate awinning deposit
strategy & product

Shareholders
Perform and grow to create value
for our shareholders

We continued to deliver real growth toour shareholders:> Achieved record share price> Outperformed Australian market as a whole> Record dividend per share

Transform
into customer-led
organisations

Have smart,well-locatedbranches

Regain the faithof our people

Dividend per Share (¢)
100
75
50
25
0
1995 1996 1997 1998 1999 2000 2001 2002

Staff
Lead and inspire each other> Overall staff satisfaction has increased
from 52% in 1999 to 78%> More staff are recommending ANZ as aplace to work
> Strong employment brand as evidenced bydramatic increase in graduate applications

Staff Satisfaction (%)%
80
60

Employment Brand
12000

78
71

65

62
40

40

9000
46

20

6000
3000

0

0
Satisfaction

ANZ
Regard2001

CultureBreakout, be bold and havethe courage to be different

Community
Earn the trust of the community

ANZ
ValuesGraduate
Applications

2002

2001

2002

> During 2002, 4,200 staff attended ANZ’s
Breakout cultural development program> Appointed 100 staff as champions andfacilitators for the Breakout program> Commenced ‘Breakout Inspiring Leaders’program to build on our leadership capabilities> Provided each staff member with 8 hours
volunteering leave per year
> Launched ANZ Community Fund (provides
financial and physical support to localorganisations identified by local branches)> Long term partnerships with Victorian
Credit Helpline, Foodbank Australia,
Foundation for Rural and Regional Renewal
and the ANZ Hollingworth Cadetship Program> 8,238 hours of volunteering by ANZ staff

Volunteer-o-meter
2500

5000

7500

10000 12500

hours

hours

hours

hours

hours

more

22
23

Chief Financial
Officer’s Review

Track Record: 1992–2002*
Group NPAT - $2322m

Group Profit
ANZ's profit in 2002 of $2322m reflects thestrong progress the Group has made over the past
10 years. The period from 1992 to 1995 was oneof recovery, as ANZ returned to a stable financial
footing following the substantial losses oncommercial lending in the early 90s. The period
from 1996 to 1998 was one of consolidation,as ANZ began to focus on its core businesses,
mainly in Australia and New Zealand.
Since 1999, ANZ has focused on improving
performance, building new momentum anddelivering strong returns to shareholders witha clear focus on productivity.

2322

1747

1870

2168**

1480
1052

1116

1024

1106

822

247

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

-579

Financial Targets**
We have achieved or are well on track to achieving
our 2003 targets
Denotes target achieved

EPS Growth > 10%

Return on Equity > 20%

25%

25%

20%

20%

15%

15%

10%

10%

5%

5%

0%

0%
1999

2000

2001

2002

1999

on
track

Cost to Income Ratio – mid – 40’s range

8%

45%

6%

30%

4%

15%

2%

0%

0%
2000

Credit Rating Maintained AA- credit rating*including significant transactions**excluding significant transactions

2001

2002

2001

2002

Adjusted Common Equity – target range 5.25% – 5.75%

60%

1999

2000

on
track

Target range

1999

2000

2001

2002

Chief Financial
Officer’s Review (continued)
In a challenging and highly competitiveenvironment, ANZ has continued to deliver
strong shareholder returns with net profit for
the year increasing by 15.9% excluding significant
transactions*. Our improved performance wasachieved through maintaining a focus on
operational efficiency and growing our income.

Change in profit 2001-2002 ($m)
2400

Net Interest Income $4,018m +4.8%

1870
1800

2002 NPAT (excluding
Significant Transactions)

Significant Transactions

Corporate Banking
Small toMedium Business
GlobalTransaction Services

Institutional Banking

2002 NPAT (including
Significant Transactions)

Tax & Outside Equity Interest
NZ Personal

Debt Provisioning Charge

Non Interest Income

150

100

50

NPAT - 2001

NPAT - 2002 > 2001

NPAT - 2002 < 2001

Personal
Banking Australia

Mortgages

0Consumer Finance> The sale of businesses to ING joint venture(profit after tax of $170m);> National Housing Bank recovery($159m profit after tax); and> Special general provision for doubtful debts($175m charge after tax).

200

Asset Finance*Significant Transactions

250

GlobalStructured Finance
GlobalForeign Exchange

Increased in line with improved profitability,
offset by the change in Australian corporate
tax rate from 34% to 30%, which reduced tax
expense by $79m.

300

Asia Pacific
Personal
Corporate Financing& Advisory

Tax and Outside Equity Interest

Improved profitability across most Business Units

GlobalCapital Markets

Economic Loss Provisioning (ELP) increased
by $79m, due to both portfolio growth and acentral ELP adjustment, reflecting ongoing global
uncertainty. This adjustment was calculated on
the basis of a one notch rating downgrade of the
Global Structured Finance Portfolio. Note: A special
ELP top up of $250m was made during the year,
and is included in significant transactions*.

2001 to 2002 NPAT Growth ($m)

INGA/ANZ
Funds Management

Debt Provisioning Charge$610m +14.9%

Expenses

1600

Expenses $3,153m +2.0%
Expense growth was contained despite Group–wide
pay increases for staff and investment in a rangeof growth initiatives focused mainly on personal
businesses. The increase in expenses that these
activities generated was partly offset by the shiftof ANZ’s investment business into a joint venturewith ING. These activities are now accounted foras an associate with only ANZ’s share of its net
result recognized.

2168

30

185

Group Treasury

Other income growth was driven by lending
volume growth in Institutional Banking and
Personal Banking Australia, and non lending
fees in Consumer Finance due to increases
in cards issued and merchant turnover.

2322

2000

Net Interest Income

Non Interest Income $2,796m +8.7%(79)

2001 NPAT

Growth in net interest income was driven by
an increase in net loans and advances (6.8%).
Margins were stable over the year, with a decline
in mortgage margins offset by improved risk
pricing in other business units.

154

(61)

223

2200

Wealth Management

Notes to change in profit excluding
significant transactions*

These positive factors were partly offset by
a deterioration in the international credit
environment resulting in higher (but manageable)
specific provisions. The overall result for the year
benefited from the one-off impacts of thesettlement of the NHB litigation and profit on saleof the funds management operations into the joint
venture vehicle, partially offset by a special generalprovision for doubtful debts charge, resulting inheadline NPAT (including significant transactions*)
increasing by 24.1% for the year.

24
25

Total Group – Non Accrual Loans ($m)

1400

1.4

Net Specific Provisions increased to $728m in
2002 ($520m in 2001). This increase, however,does not reflect a systemic deterioration of ANZ’scredit profile, but rather a small number of largehigh profile corporate collapses during the year.
Four customers represent approximately 50% of
the Specific Provision charge for the year, of which$170m was taken against Enron and a further$143m against Marconi.

1200

1.2

1000

1.0

800

0.8

Balance Sheet Management– Net Lending Asset Growth 6.8%
– Deposit Growth 8.0%

Net loans and advances (NLA) increased by 6.8%
driven primarily by our mortgages business on theback of a robust Australian property market. Lendingin our Consumer Finance and Small to Medium
Business segments also increased reflecting ourstrategies in each segment to increase market share.
Deposits grew by 8% during the year as part of theBank’s continued effort to grow deposits.

1600

1,543
1.43%

1,391
1.16%

– Tier 1 Capital 7.9%
– Adjusted Common Equity (ACE) 5.7%

Our capital levels remain strong accross all major
measures. Adjusted Common Equity as a % of
Risk Weighted Assets (RWA) is 5.7% (Target Range
5.25%–5.75%).
A level of capital at the high end of our target range isconsidered prudent given the current world economic
climate. However, capital levels are continually being
reviewed to ensure that an appropriate balance
between risk and return is maintained.
Dividends increased to 85 cents (fully franked) from73 cents in 2001, representing a payout ratio of 58%.

1,357
1.06%

1,203
0.88%

1.6

0.6

600
1999

2000

2001

Non Accruals

Mar 022002% Gross Lending assets

General Provision ($m) - Total Group
2000
1496

1500

446
1050

1000
500
0

Lending & Deposit Growth ($b)
135
125
115
105
95
1998

1999

Deposit

Capital Management

1,260
0.99%

Surplus above
APRA Guidelines

Despite these large single name losses, our
Economic Loss Provisioning (ELP) methodology
has ensured that all losses are adequately covered,with our General Provision balance above APRA
requirements. As part of the regular assessmentof the adequacy of the General Provision, a special
top up of $250m was made during the year toincrease the General Provision balance to a more
prudent level, in light of the prevailing global
economic uncertainty and an unusual level ofinvestment–grade defaults.

1.8

1800

APRA
Guidelines– Non Accrual Loans 4.5% decrease– Net Specific Provisions 40% increase

Non accrual loans decreased over the year reflecting
the health of the domestic market, assisted by writeoffs of several large exposures. The level of thedecrease was partly offset by the downgrade of asmall number of international customers who werepreviously investment–grade.

Sep-02

Asset Quality

2000

2001

2002

Net Loans and Advances

Regulatory Capital
11.2%

RWA
160b

10.7
10.2

10.3

10.0%

150b

9.5
2.8

2.8

8.8%

2.8

1.6

140b
130b

7.6%

120b

6.4%
7.4

7.9

7.9

7.5

110b

5.2%

100b

4.0%
2000

1999
Tier 1

2001

Tier 2 Less Deductions

2002
Risk Weighted Assets

Adjusted Common Equity/Risk Weighted Assets
9%6%Target range
5.25% – 5.75%

6.0%

5.9%

Mar-01

Sep-01

6.3%
5.7%

3%
0%
Mar-02

Sep-02

Business Overview

Personal Banking
and Wealth Management

Consumer Finance

($m)

2002

2001

%

2002

2001

%

2002

2001

%

2002

2001

%

Operating Income

2204

2182

1.0%

691

593

16.5%

366

333

9.9%

541

530

2.1%

Operating Expenses

1340

1330

0.8%

308

266

15.8%

124

121

2.5%

161

150

7.3%

Provisions

38

38

0.0%

161

171

-5.8%

16

17

-5.9%

28

24

16.7%

Profit before tax

826

814

1.5%

222

156

42.3%

226

195

15.9%

352

356

-1.1%

Income Tax expense

253

288

-12.2%

73

57

28.1%

69

65

6.2%

106

120

-11.7%Net profit

573

526

8.9%

149

99

50.5%

157

130

20.8%

246

236

4.2%

Cost to Income Ratio

60.7%

61.0%

-0.3%

43.6%

43.7%

-0.1%

33.9%

36.3%

-2.4%

28.5%

27.0%

1.5%

Principal
Activity

Provides a full range of financial
services and advisory products
to personal and micro businesscustomers in Australia, New
Zealand and the Asia–Pacificregion. Comprises Personal
Banking Australia, New Zealandand Asia–Pacific, WealthManagement and the ING
joint venture.

2002
Goals andAchievements

2003
Goals

Small to Medium Business

Delivers consumer finance(cards and personal loans)products and merchantacquiring solutions to personaland business customers acrossAustralia, New Zealand andselected Asian countries.

Provides a full range of financial
services for small to medium
business customers inAustralia and New Zealand.
The relationship teams aresupported by a wide range of
specialist providers from otherareas in ANZ.

Mortgages

Provides housing finance toconsumers in Australia and
New Zealand for both owneroccupied and investment
purposes.

Establish best in classtransaction accounts
Launched new Access Accounts
Increase staff involvement inlocal communities
Established ANZ Community Fund
Expand presence throughout
the PacificAcquired Bank of Hawaii assets
in Vanuatu, Fiji and PNG;
Acquired Bank of Kiribati(75% stake)
Finalise joint venture witha global fund manager
Established joint venturewith ING

Improve product positioning
Launched Hong Kong andIndonesian credit cards
Improve customer experience
Launched ‘Sphere’ loyalty
program
Implement new technology
and operations platform
Rolled out new processing
platform ‘VisionPlus’;
deployed chip-based cards
and chip-enabled merchantterminals

Invest in the business to growcustomer numbers and improve
service
Increased the number ofRelationship Managers
Launch ‘runningmybusiness’
Launched small business portal‘runningmybusiness.anz.com’
Establish industry specialisation(franchising team)
Established specialist franchisingteam Australia-wide

Enhance automation and web
based delivery of services
Introduced automatedprocessing for Mortgage
Broker applications
Develop additional
3rd party alliances
Developed andimplemented third party
mortgage servicing
capability with alliancepartners
Continue product anddistribution leadershipAwarded AustralianMortgage Brokers‘Best Financial Institution
To Do Business With’

Improve market share in corebanking products
Launch complete set of newsavings products
Improve cross sell of wealthmanagement and insurance
products
Continue rollout of Restoring
Customer Faith program
Invest in frontline technology
and training

Deliver a ‘quantum leap’ in key
customer experience and quality
dimensions
Leverage best-in-class operations
facilities to drive improved
efficiency and lower cost
Build new revenue streams
through product innovation andcontrolled geographic expansion
Further strengthen our people
resources and execution
capabilities

Maintain growth in the businessContinue to employ new
relationship managers
Continue to grow the numbersof new customers and improvecustomer service
Expand the franchise team andindustry specialisation

Drive above market growthacross all channels
Continue to lead the market
with award winning products
and strong customer service
Further build staff andcustomer advocacy
Re-engineer ‘end-to-end’support functions to improve
processing efficiency andcustomer experience26
27

Corporate Businesses

Asset Finance

2002

2001

%

2002

2001

%

1296

4.1%

796

749

6.3%

471

335

40.6%

450

-1.1%

362

354

2.3%

236

231

2.2%

144

149

-3.4%

68

64

6.3%

86

4

Large

10.4%

760

697

9.0%

366

331

10.6%

149

100

49%

2002

2001

388

2.3%

1349

188

-4.8%

445

69

65

6.2%

149

135

2001

397
179

Operations, Technology
and Shared Services
and Corporate Centre

%

%

2002

ANZ Investment Banking

47

43

9.3%

233

231

0.9%

55

43

27.9%

46

67

-31.3%

102

92

10.9%

527

466

13.1%

311

288

8.0%

103

33

Large

44.6%

47.9%

-3.3%

32.9%

34.6%

-1.7%

45.5%

47.3%

-1.8%

Provides a diverse rangeof services to the Group.

Delivers asset finance, fleet
management and equipment
rental services and investment
products to customers inAustralia and New Zealand.

Provides the principal
relationship between our
corporate customers and allareas of the Bank as well asworking capital management,
liquidity management andtransaction processing.

Provides investment banking
products and services, utilising
specialist capabilities,
innovative products andcustomised client solutions.

Improve positioning in fast
growing markets
Achieved strong growth infleet and vendor financebusinesses; service rated
highly by over 70% of
customers
Increase returns on traditional
asset finance businessthrough e-transformation
Improved unit cost forservicing and processing
efficiency to our business via
new technology platform‘Yuetsu’

Implement initiative toprovide medium–sizedcompanies with access tosame range of investmentbanking services as large
institutions
Realised benefits fromextending services tomedium–sized companies
through our ‘Wall Street toMain Street’ initiative
Maintain performing loans
at 99% of bookContinued to achievetarget levelE-enable, sell or exit thosebusinesses subject tocommoditisation and scaleeconomics
Announced new online
trading system providing 24
hour service, faster response,
straight through processing
and reduced transaction costs
Become the pre-eminent
global structured financehouse in chosen geographies
Rated #1 Asia–Pacific Project
Finance Bank of the Year(‘Project Finance International’and ‘Global Finance’ magazines)

Implement Common
Administration System
Rolled out Group-wide systemproviding access to financial
information, general ledger,
HR functions, procurement,
accounts payable and fixed
asset processes
Align business to better meetcustomer needs and provide
more consistent experience
Commenced usage of cheque
image archives for faster response
to customer enquiries andinternal efficiencies
Provide highly efficientstate-of-the-art payment
capabilities
Delivered major new projects
including credit card processing
and customer transaction
processing

Position business to capture
growth opportunities in traditional
asset finance and motor vehicle
and equipment markets
Continue to improve our profitability
Provide an operationally excellent
platform to our customers andbusiness partners, such as dealers
and brokers
Attract and retain talented people
to our businessContinue to create value for ourcustomers through knowledgeof customer requirements
Continue to concentrate on
customer profitability byleveraging our balance sheet andincreasing cross sell revenue
Continue to invest in technology
to increase efficiency andimprove customer experience

Continue to capitalise on ourcore competencies in each of
our segments
Continue to increase therange and complexity of our
product suiteContinue to address credit issues
and improve risk mitigation

Replace Group Payroll systems
Complete upgrade of corporatebanking and customer transaction
processing capabilities
Commence customer access via
web for “self service” enquiries
on payments, statements andtransactions

Corporate Centre comprises
Group Strategic Development,Group Risk Management,
People Capital and Chief
Financial Officer’s Units
including Group Treasury.

Business Reports

Consumer Finance

Personal Banking and Wealth Management

$600m

100%

573

100%

$600m

526
80%

80%

75
68

71

61

60%

68

$400m

72

75

70

67

$400m

60%

53
40%

40%

$200m

$200m

20%

149

20%

0%

$0m
Overall Staff
Satisfaction

Overall Customer
Satisfaction*

99

0%

NPAT

$0m
Overall Staff
Satisfaction

Overall Customer
Satisfaction*

NPAT

July 2001

2001

2001

July 2001

2001

2001

Feb 2002

2002

2002

Feb 2002

2002

2002

July 2002

July 2002

Employees:
8,917 FTE

Employees:
1,156 FTE

Growing our personal banking business is
all about the little things we do every day.
It’s about providing better products andservice to individual customers and having
the commitment to make good service a
reality at the local level.

We are repositioning Consumer Finance tobuild a growth business for the future throughinvestment in state-of the-art technology and bycreating a great team of people. Our aim is tocontinue to deliver innovative products and a
distinctive service experience for our customers.

Elmer Funke KupperManaging Director, Personal Banking and Wealth Management

Brian Hartzer
Managing Director, Consumer Finance

Personal Banking and Wealth Management includes our Personal Banking
businesses in Australia, New Zealand and Asia–Pacific, Wealth Management
and our joint venture with ING.

Consumer Finance, which includes credit cards, merchant payment solutions,ePayment products and personal loans, has performed well in 2002.

During 2002, earnings rose 8.9% as we continued repositioning thesebusinesses for future growth. This has involved a commitment to transforming
our customers’ banking experience. We have made some real progress inthese areas this year.
> We launched our new access accounts which now set a new standard
in the industry. We have received an award for our product, Access Advantage> In May 2002, we made a strategic leap in wealth management though our
joint venture with the ING Group, establishing ING Australia as a leader infunds management and life insurance in Australia and New Zealand> We implemented the Restoring Customer Faith program in Victoria and
New Zealand. This new model for our retail business is being rolled out
across Australia and New Zealand during the next two years. It involves
giving local staff a greater sense of ownership and freedom by allowing
them to put customers first, and supporting our people by investing inmodern branch premises, training programs and improved technology> Our new Customer Service Charter established clear benchmarks for service
to personal and small business customers> We extended our leadership position in the Pacific through acquisitions
in Kiribati, Papua New Guinea, Vanuatu and Fiji, and through investment
in electronic banking and new products
Our challenge is to build on this new momentum to take our Personal Banking
and Wealth Management businesses to the next level by continuing to focus
on growing our revenue and customer base. We will make key investments in
our product suite, technology and training programs.

Source: Roberts Research*

Earnings were up 50.5%, based on growth in the credit card portfolio following
the collapse of competitor airline loyalty programs, increases in card spending
volumes, higher merchant acquiring share, and improved credit performance
particularly in personal loans.
Our specialist approach has allowed us to focus on the quality of our people
and technology to deliver products efficiently with high levels of customer
satisfaction. This focus is showing results, including the highest credit card
satisfaction among our major competitors and a 7% increase in staff
satisfaction.
Our 2002 results reflect a number of significant technology investments
designed to support future growth. During the year, we were the first bank inAustralia and New Zealand to commence converting our credit card technology
to chip. The $50 million investment in new chip-based cards and chip-capable‘MultiPOS’ terminals provides an early mover advantage with cardholders andmerchants. This included launching Sphere, a new chip–based reward
program, for ANZ First customers.
In March, we replaced our main processing platform with a new system called
VisionPlus. This system will allow us to provide more flexible, customised, andresponsive service to customers and reduce costs through greater processing
efficiencies.
We have also improved our share of merchant acquiring; introduced new
on–line tools for our customers and staff; reduced fraud losses through theapplication of neural network technology; and taken early steps to extend
our credit card business into Asia by launching credit cards in Hong Kong.

28
29

Mortgages

Small to Medium Business

100%

$600m

80%

$600m

80%

75
67

60%

100%

66

69

$400m

59

60%

40%

79
64

69

70

61

$400m

40%
$200m
157

130

20%
0%

20%

$0m
Overall Staff
Satisfaction

Overall Customer
Satisfaction*

246

236

$200m

0%
NPAT

July 2001

2001

2001

Feb 2002

2002

2002

$0m
Overall Staff
Satisfaction
July 2001
Feb 2002

July 2002

July 2002

Employees:
1,265 FTE

Employees:
1,048 FTE

Overall Customer
Satisfaction*

NPAT

2001

2001

2002

2002

We are revitalising our small to medium
business presence. Our people have moreauthority to make pricing and credit decisions
and meet customer needs. By improving
service and delivering a full range of financial
solutions for customers we are creating
growth for the future.

The difference our specialist focus creates is ateam of people who live and breathe mortgages– a team which is growing our business byhelping around 1000 families into homeownership every day.

Graham Hodges
Managing Director, Small to Medium Business

Growing our Mortgage business starts with good products. In 2002, for the
fourth year in a row, we received Personal Investor magazine’s award forHome Lender of the Year, reflecting the first rate features and competitivenessof our mortgage products.

The small to medium business sector is an important growth opportunity
for ANZ. During 2002, we continued to develop our specialist focus byimplementing a distinctive new service proposition – one focused on
developing the quality of our people and empowering them to address
customer needs more effectively.

Greg Camm
Managing Director, Mortgages

Good products don’t add value without high levels of customer service, andthis year we invested heavily in technology and resources to develop faster,
more responsive ways of serving our customers.

The new service proposition directly addresses some of the key drivers ofcustomer satisfaction – being flexible and responsive around customer needs,
providing expert advice and innovative products and a long-term focus tocustomer relationships. We have expanded our geographic ‘footprint’ anddeveloped specialist industry segments such as franchising.

This has included implementation of new online systems to allow mortgage
applications in Australia and New Zealand (including broker channels) to belodged electronically, speeding up processing and approvals. We have also
developed new businesses in the wholesale funding and servicing of third
party mortgages.

Our efforts have begun to pay dividends. Customer satisfaction has risen from
66% in 2001 to 69% in 2002. Staff satisfaction increased from 59% in 2001
to 75% in 2002. We also received recognition in Personal Investor magazine’s
financial services awards for the Best Business Transaction Account, Best
Small Business Web Site and the Lifestyle Package Banking Award for
Small Business.

We are already seeing some early results. While we have taken a conservative
position on risk, we have approved mortgages in record numbers in thesecond half of 2002.

During the year, Small to Medium Business earnings grew 20.8% driven
by growth in new customers, increased share of business from our existingcustomers, and higher deposit and lending volumes.
While we have a long way to go to build a market-leading position, we havemade good progress in 2002. We will continue to invest in the business, by
growing our geographic presence, serving our customers better, developing
new products and extending our specialist capabilities.

Loans outstanding have grown by 16% over the year. Brokers have voted us‘the best bank to do business with’. These results have, however, been
impacted by pressure on margins through increased funding costs in the risinginterest rate environment, resulting in 4.2% earnings growth to $246 million.

Business Reports (continued)

Asset FinanceCorporate Businesses

$600m

100%

$600m

100%

527
80%
70

74

77

78

80

80

80%
70

$400m

60%

74

74

466

75
$400m

60%

40%

40%
$200m

20%

$200m
102

92
$0m

0%
Overall Staff
Satisfaction

Overall Customer
Satisfaction**

July 2001
Feb 2002

20%
0%

NPAT

$0m
Overall Staff
Satisfaction

Overall Customer
Satisfaction*

NPAT

2001

2001

July 2001

2001

2001

2002

2002

Feb 2002

2002

2002

July 2002

July 2002

Employees:
1,303 FTE

Employees:
2,207 FTE

We are a leading provider of vehicle andequipment finance and rental services. That
requires a consistent focus on fast, convenientfinance and rental experience for our customers,
providing value for our business partners andcreating an environment for our people to excel.

It’s been a tough year but we have continued
to deliver through our unique competitive
position. Our client franchise, high levels ofcustomer satisfaction and the expertise of ourpeople continue to allow us to reshape thebusiness and create growth.

Elizabeth ProustManaging Director, Asset Finance

Bob Edgar
Managing Director, Corporate Businesses

Esanda and UDC are our asset finance and rental businesses in Australia
and New Zealand. We specialise in supporting our customers and business
partners, such as dealers and brokers, through vehicle and equipment finance,
vehicle fleet and equipment management and servicing, and debenture
investments.

Corporate Businesses includes our relationships with middle-market corporateclients, major Australian and international institutions and corporations, andGlobal Transaction Services which provides products to support working capitalmanagement, liquidity management and transaction processing.

The asset finance and rental market is highly competitive and has experienced
consolidation and increased margin pressures in recent years. Our response
has been a series of initiatives to develop a more sustainable market
leadership position. This includes a program of efficiency improvements
involving investments in technology and process re-engineering and redesign,
and a focus on improving credit quality.
Our efforts are already starting to show results. Earnings in 2002 are up
10.9%. Customer satisfaction remains strong at 80% and staff satisfaction
has also risen to 77%. These results reflect the specialised culture andidentity we have developed around serving our business and personalcustomers.
There is still much to do. We need to create an operationally excellent
platform for our customers and business partners and continue to attract
and retain talented people. This focus will provide a platform to capture future
growth opportunities and continue to improve profitability within
our asset finance business.

It has been a subdued year in the domestic business market. Althoughconsumer sentiment has helped drive growth in the domestic economy,
the business market has been relatively quiet. It has been even moredifficult internationally.
However, ANZ has an enviable franchise in the business market. Among the
major Australian banks, customers again rated us #1 in satisfaction for boththe corporate and institutional markets.
> Earnings in Corporate Banking were up 6.3% despite restrainedbalance sheet growth reflecting the contribution of lending, leasing
and deposit products> Institutional Banking faced a more challenging international environment
in 2002. Earnings were up 18.5%, mainly from lending fee income> Global Transaction Services earnings were up 11.1% with growth instructured trade partly off-set by downturns in foreign cash and travellers
cheques following September 11 and a repositioning of the trade financeportfolio to reduce risk
Our performance is also a reflection of the quality and commitment of ourpeople, with high levels of satisfaction reflected in our staff survey results.
Our client franchise and high levels of customer satisfaction
together provide a strong combination that continues to allow us to explore
opportunities to reshape the business and create growth.

Sources: Roberts Research*
Russ Knight Research**

30
31

ANZ Investment Bank

Operations, Technology and Shared Services and Corporate Centre

80%
66

83

80%

79
72

$600m

100%

$600m

100%

69

$400m

75
$400m

60%

60%
311
288

40%

40%
$200m

$200m
20%

20%

103
33

0%

0%

$0m
Overall Staff
Satisfaction

NPAT

July 2001

2001

Feb 2002

2002$0m
Overall Staff
Satisfaction
July 2001
Feb 2002

July 2002

July 2002

Employees:
1,034 FTE

Employees:
5,546 FTE

We are developing a strong, distinctive
business focusing on the depth of our specialist
product range combined with our traditional
strengths, the quality of our people, ourcustomer franchise and concentration on
key geographies.

NPAT
2001
2002

Our teams are focused on supporting ANZ’s
specialist businesses by providing strategic
direction, technology, financial governance andshared services at best practice cost, in a way
which creates freedom and avoids unnecessary
bureaucracy within the Group.

Grahame Miller
Managing Director, ANZ Investment Bank
ANZ Investment Bank, which includes our structured and corporate finance,
capital markets and foreign exchange businesses, has produced a solid
performance in a challenging international environment.

Operations, Technology and Support Services (OTSS) is responsible for ANZ’s
global technology platforms, development and maintenance of businessapplications, the Group’s payments business and shared services.

> We remained the premier Australian foreign exchange (FX) bank globally.
Although earnings were down 3.4%, reflecting lower FX volatility
internationally and tightened credit conditions, growth in FX amongst
funds management clients and e-commerce are positioning us for the future

Providing these services is about a working partnership between our technology,
payments and other specialists and each of our businesses. The objective is toprovide our customers with superior personalised services at lower cost.

> Global Capital Markets was ranked #1 by Asia Money magazine in Interest
Rate and Credit Derivatives, and #1 in Australian and New Zealand Loans by
Basis Point magazine. Earnings were up 20.8% supported by debt, derivativeand securitisation deal flow
> Corporate Financing and Advisory earnings grew 9.7% reflecting a rangeof leading roles in major project financings and the development of growthbusinesses in private equity capital and leveraged finance> Global Structured Finance produced earnings growth of 10.5%, achievinga strong performance in project and structured finance and industrial
transportation and growth in non–lending fees, despite subdued markets
We incurred significant specific provision losses from loans made to two
major international companies that collapsed during the year, namely Enronand Marconi. Following this, further steps have and are being taken to address
credit issues and improve risk mitigation internationally. The net profit after
tax results reflect economic loss provisioning, not the specific losses incurred
during each year. Our strong business foundation is enabling us to continue
to reshape our business and focus on new growth opportunities in private
equity products and securitisation and increased fee-based structuring andadvisory activities.

In 2002, OTSS worked on a number of projects including the replacement offront-to-back systems for our Asset Finance business, installation of a common
administrative system for the Group, rollout of a new branch sales platform andimplementation of a new platform for our cards business called VisionPlus.
ANZ’s Corporate Centre provides a diverse range of services to the Group.
It comprises Group Strategic Development, Group Risk Management,
People Capital and Chief Financial Officer’s (CFO) Units includingGroup Treasury.
Group Strategic Development works closely with the businesses to strengthen
and maximise their performance. In 2002, ANZ launched a new funds
management joint venture with ING as well as acquired the Bank of Hawaii’s
Pacific businesses.
Group Risk Management is responsible for the organisation's risk strategies,
policies and processes. 2002 achievements are detailed on pages 38 and 39.
People Capital is involved in leading a range of initiatives to help build
organisational capability, and deliver the best opportunities to our people.
2002 achievements are detailed on pages 15 and 22.
CFO Units are responsible for the Group’s financial governance. In 2002, theCompany won several awards in recognition of the quality of its disclosure with
CFO Units being major contributors to this transparency.
Group Treasury, part of CFO Units, provides cash flow support, ensures liquidity,
manages interest rate risk and provides capital to our businesses. In 2002,
Treasury’s earnings increased 65% to $124 million, reflecting strong interest
income from interest rate risk management activities.

Where we are

ANZ is committed to providing world classbanking facilities in our home markets of Australia
and New Zealand, together with extending thesefacilities throughout the Asia–Pacific region.
Complementing our Regional focus is a strong
presence in the world’s major financial centresof the United States of America, United Kingdom
and Europe, giving us a global reach in supportof the international activities of our customers.

Asia
Operating Income
Cost to Income
NPAT
External Assets# Employees

$261m
43.3%
$101m
$7.4b
617

Principal Activity
Personal Banking, Trade,
Investment Banking, Private
Banking

Australia
New ZealandPacific
American Samoa
Cook Islands
East TimorFiji
Kiribati
Papua New Guinea
Samoa
Solomon Islands
Tonga
VanuatuAsia
China
Hong Kong
Indonesia
Japan
Korea
Malaysia
Philippines
Singapore
TaiwanThailand
Vietnam

EuropeFranceGermany

United Kingdom
United States of America

United Statesof America
Operating Income
Cost to Income
NPAT
External Assets# Employees

32
33

United Kingdom,
Europe & other
$167m
29.9%
$60m
$5.4b
98

Operating Income
Cost to Income
NPAT
External Assets# Employees

Principal Activity
Investment Banking

Principal Activity
Investment Banking

Australia

Pacific

Operating Income $5160m
Cost to Income
39.7%
NPAT*
$1708mExternal Assets$135b# Employees
15879# Branches
738

Operating Income
Cost to Income
NPAT
External Assets# Employees

Principal Activity
Full Banking Services

$223m
49.3%
$64m
$9.9b
755

*including significant transactions

$191m
49.8%
$59m
$1.6b
1434

Principal Activity
Personal Banking

New ZealandOperating Income
Cost to Income
NPAT*
External Assets# Employees# Branches

$986m
47.4%
$330m
$24b
3698
146

Principal Activity
Full Banking ServicesintegrityIntegrity is at the core ofevery relationship we havewith our customers, staff
and shareholders. It’s
about earning their trust.

Our customers have to have absolute confidence
in the safety of funds they invest with us. We must
be honest and transparent in the way we deal withthem. We also expect our customers to be honest
and accurate in what they tell us about theirfinancial position.
Working in financial services means our staff
deal with issues of ethics and integrity every day.
We have a Code of Conduct to underpin ethicalbehaviour. However, we have to continue tocreate a culture where legal, ethical and honest
behaviour is just the way we are and the way
we work.
Investors are demanding higher standards ofcorporate governance. For our shareholders,integrity means confidence in the investment they
have made in us. It means consistent, no–surprises
performance and a commitment to transparent
reporting, timely and accurate disclosures andmanagement accountability.
In 2002, the ANZ Board undertook a review
of governance procedures focused on further
strengthening ANZ’s standards of corporate
governance, disclosure and transparency.
The changes relating to Board committees, theirmembership and their charters are outlined on
pages 43 and 44.

A range of other governance measures wereintroduced including:> A new policy covering ANZ’s relationship with
its auditor. The policy limits and controls theprovision of services by ANZ’s auditor by
restricting engagements undertaken by theexternal auditor to audit or audit–related
services. Certain other services can only beprovided where they cannot be perceived as
potentially conflicting with the independentrole of the auditor and where they have been
approved by ANZ’s Audit Committee> Enhancing our Serious Complaints Process which
protects staff who raise issues regarding internal
procedures> New reporting arrangements for the Company’s
internal audit function which now reports directly
to the Board’s Audit Committee> Providing enhanced disclosure and discussionof critical accounting policies, and disclosureof off–balance sheet vehicles (refer to Financial
Report)> Index–linked options provided to executives
to raise the performance hurdle and moreclosely link options to our performance relative
to our competitors> An in–principle decision to expense options in
the year they are granted. We will implement thischange as soon as the tax and Australian
Accounting Standards implications are clarified

Corporate Governance

There is an inherent trust between Rhiannon andher dad Anthony as they move toward their future.

Integrity
trust –

Our business is based on
It’s about

being what you say you are,doing what you say you will do.

Risk Management

ANZ’s Risk Management Vision and Strategy
ANZ is underpinned by an ongoing focus onrisk issues and strategy at the highest levels
and a comprehensive risk management
framework comprising:> The Board, providing overall leadership andmonitoring progress

We are building
a medium growth,
low risk bank.

> A strong basis for Group–wide risk management
policies, procedures and systems, overseen
by an independent central team of risk
professionals headed by the Chief Risk Officer
reporting to the Chief Executive Officer> The use of sophisticated risk tools, applications
and processes to execute our global risk
management strategy across the Group> Primary Business Unit–level accountability for
management of risks in alignment with theGroup’s strategy
Risk Management and the Board
The Board of Directors, through the Risk
Management Committee, approves the Group’s
risk appetite and is responsible for overseeing
and approving ANZ’s risk management strategy
and policies. The Risk Management Committee
meets regularly to monitor that the requisite
culture, practices and systems are in place acrossthe Group, to discuss the Group’s response to
emerging risk issues and trends, and to review
the effectiveness of the risk management systems.
A Strong Framework for Risk Strategy
Management has the primary responsibility for
identifying and evaluating significant risks to thebusiness and for implementing suitable controls.
Responsibility for the implementation of risk
policy and for ensuring that there is an effective
top–level control framework is delegated to theChief Risk Officer.
The Chief Risk Officer implements the risk
strategies and policies approved by the Board byleveraging specialist expertise within Group Risk
Management in three key types of risk: Credit Risk,
Market Risk and Operational Risk. Group Risk
Management is also responsible for setting risk
policy, determining risk measurement
methodology, overseeing the Business Units’
compliance with policies, regulations and laws,
and undertaking regular risk evaluation andreporting. All of these functions are undertaken
by risk professionals with extensive experience.

Business Unit Level Accountability
for Risk Management
Within each Business Unit, the Managing Director
has primary responsibility for risk management.
Each Business Unit has a risk management teamand receives further assistance from a senior risk
professional who provides strategic guidance andadvice. This partnership approach ensures timely
communication about risk issues as they arise andalso provides the means for effective governanceand oversight by the Chief Risk Officer.
The various risks inherent in the operations of theGroup may be broadly grouped together under thefollowing three categories:
1. Credit Risk
Credit Risk policy and management are principally
executed through two dedicated departments —Wholesale Risk and Retail Risk.
Wholesale Risk services the Group’s Corporate,
Institutional and Global Investment Banking
activities, while Retail Risk services the Group’s
consumer–based businesses.
All major credit decisions (or automated decision
processes) for the Group’s corporate andconsumer businesses require dual approval byboth Group Risk Management and Business
Unit–based personnel.
Review of 2002
2002 was a very difficult year in the international
credit markets highlighted by large corporate
failures and accounting frauds, continued
difficulties in the energy and telecommunicationsindustries, increased share market volatility and an
overall trend towards increased risk aversion. In
recognition of these events, and consistent with
ANZ’s objective to improve continually our core risk
management processes to industry leading levels,
we have implemented a number of substantial
enhancements to our framework for managing
credit risk in 2002.
Specific improvements include:> Continuing the trend of previous years, ANZ’slargest corporate exposures were further
materially reduced in 2002. The aggregate of our
top 10 committed exposures as a percentage of
Adjusted Common Equity declined over the lastyear from greater than 130% in September 2001
to approximately 100% in September 2002
> Further substantial reductions were made to thelimits applying to our single customer exposures.
These limits vary with the credit rating andgeographical location of the customer; the limits
applicable to offshore customers are 40% lower
than those applicable in Australia and New
Zealand. In addition, inner sub–limits on funded
exposures were introduced in October 2002
> Cross–border limits were further materiallyreduced (post September 11) in South Asia,
Middle East and Asia

38
39

Top 10 Exposures as percentage of
Adjusted Common Equity> ANZ’s internal credit ratings are now regularly
and systematically reviewed against movements
in external ratings, market indices, credit spreads
and other industry indicators for “early warning”
purposes

140%

120%

> ANZ’s internal risk grading scale was expandedfrom 10 to 27 customer credit ratings

100%> A new credit cost calculator, ‘C–Risk’, wasimplemented, which calculates economic credit
costs for individual facilities

80%

60%

> A wider application of sophisticated risk
measurement tools in the retail sector, resulting
in more efficient and effective credit assessment
processes. Credit policies were tightened incertain specific areas

40%

20%

0%
Sep 01

Sep 02

excludes non–recourse and uncommitted facilities

Continued Portfolio Re–Weighting asa percentage of Group Assets
100%

80%

Despite a difficult economic environment in
2002, the overall quality of ANZ’s corporate andconsumer credit portfolios remains sound.
Australian and New Zealand risk profiles remain
stable with the international profile being affectedby a small number of larger corporate downgrades.
The assessment of counterparty credit worthinesshas been enhanced through providing greater
weighting to the quality and integrity ofcounterparties’ financial disclosure. Concentration
limits on certain industries, sectors and customers
have been reviewed and further aligned to theGroup’s risk appetite.

60%

2. Market Risk
40%

20%

0%
1991

1996
Consumer

2002
Business

TargetMarket Risk is the risk that the Group will incur
losses from changes in interest rates, foreignexchange rates or the prices of equity shares andindices, commodities, debt securities and otherfinancial contracts, including derivatives. It ismanaged by a variety of different techniques withGroup Risk Management setting limits to control
trading positions and interest rate risk up to Board
authorised totals.
Review of 2002
During the year, rollout of a new ‘Market Risk
Engine’ was completed. This major initiative
enables better aggregation and measurement ofmarket risks across asset classes (eg, equities,
foreign exchange and interest rate products), andpositions ANZ at the forefront of market risk
management capability.
Other key undertakings over the year, which focus
particularly on the crossover dynamics between
Credit Risk and Market Risk, include:> Establishment of a new framework to enabletrading in credit derivatives. This capability
introduces another tool to support ‘best practice’
management of the Group’s credit portfolio, thecreation of structured investment products forclients, and enhanced trading capability> Evaluation of market risk management
capabilities at clients exposed to significant
market risks in their core business, thereby
improving the Group’s overall managementof credit risk associated with these clients

3. Operating Risk
Operating Risk is the risk of loss resulting frominadequate or failed internal processes, people
and systems or from external events.
Group Risk Management is responsible forestablishing Group policy and for themeasurement, monitoring and reporting ofoperating risk across the Group.
Review of 2002
ANZ’s operating risk framework, policy andprocedures continue to be strengthened in linewith new and emerging risk trends. Key activities
in 2002 included:> Further development of ANZ’s methodology
for operational risk measurement and economic
capital allocation> Strong focus on fraud risk management,
including implementation of an updated Groupfraud policy, enhanced technology tools anddevelopment of industry solutions in conjunction
with Government and industry groups> Refinement of the Group’s business continuity
capability in line with new and emerging threats,
reinforced by crisis management exercises> Significant enhancement to ANZ's regulatorycompliance framework, including policies toaddress money laundering, criminal and terrorist
financing, privacy and customer disability, andprocedures for electronic funds transfer
Looking Forward
ANZ’s risk management capabilities are considered
to be a strategic asset and a source of competitive
advantage. Through effective use of technology
and strong management focus, we seek tostrengthen further the Group’s risk capabilities
and culture to ensure that ANZ remains at theforefront of risk management capability within
the banking and financial services industry.

Environmental Report

This year we have commenced an important review
to extend our approach to corporate sustainability.
The aim is to develop an approach which willassist us in achieving long–term shareholder value
by focussing on the market's potential forsustainability products and services while at thesame time successfully reducing and avoiding
sustainability costs and risks. This aim is todevelop a framework for greater self–awarenessand action.
Although there is still much to do, we have madesome early progress.
In June 2002, ANZ’s infrastructure investment
business established Wind Power Investment
Trust. The Trust is considering investments toenable the development of wind farms in New
South Wales, South Australia and Victoria, which
would deliver in excess of 300MW of green energy
into the national energy market.
ANZ has also focused on minimising the direct
impact of its operations on the environment. To
support this we have expanded our Environmental
Management Program through the ANZ Green
Office initiative including joining the Federal
Government’s Greenhouse Challenge.
The Green Office initiative addresses the impact
ANZ has on the environment though its
consumption of energy, the waste materials
we produce and the water we consume.

EnergyPurchasing

We have joined the Property Council ofAustralia/Sustainable Energy Authority of Victoria’s
Energy Smart Leaders Program, an initiative aimed
at reducing our energy consumption and reducing
Greenhouse emissions.

ANZ has begun to review all purchasing contracts
with a focus on environmental sustainability. The
initial focus is on recycled paper purchasing, useof cleaning chemicals and the development ofsustainability criteria for tenders as evidenced ina recent office furniture request for tender.

So far we have conducted a number of energy
audits of our major buildings in Melbourne.
These audits have identified potential savingsof Greenhouse gases between 1,700 and 2,500
tonnes. Green Teams have been established toact on the audit findings and ensure we achievethese energy savings. For example, during 2002
the initial energy saving at our 55 Collins Street,
Melbourne building resulted in an immediate 10%
drop in Greenhouse emissions and a $30,000
saving in energy costs.
ANZ received the 2002 Outstanding Achievement
Award for successful involvement in the Energy
Smart Leaders Program.
Waste
During 2002, we participated in a Best Practice
Waste Management Trial to ensure we recover andrecycle all used office paper. Although ANZ alreadyhas a comprehensive paper recycling system, thetrial resulted in an increase of 65 tonnes in thequantity of paper recycled over a three–month
period. This is being supported by acompany–wide Work Practices Review to identify
ways ANZ can reduce paper in the first instance.
We know, however, that waste is a wider issue
than just paper. Recently, a waste audit of one ofour major buildings was conducted by Visy toidentify the potential to reduce our current waste
to landfill. We have started to act on the audit’s
recommendations that have the potential toreduce waste to landfill by almost 75%.
We are supporting these initiatives by engaging
our people on environmental issues. An
environmental site on ANZ’s intranet has been
established to advise staff of ways they can
actively participate in initiatives across the Bankand in the community. This includes staff using
their Volunteer Leave to work on environmental
projects with a community organisation.

Incorporating sustainability
in the workplace needs tobecome an integral part ofour business.

Our progress has been recognised with ANZ
continuing to be included in two leading indicesof Corporate Sustainability in 2002—the Dow Jones
Sustainability World Index and Financial Times
FTSE4Good Global Index.
We know, however, there is much more for us toachieve. The journey ahead is about building on
our progress so far to develop a comprehensive
sustainability agenda that can demonstrate ahigh level of commitment and action in
addressing global and industry social andenvironmental challenges.

40
41

Customer Service Charter

In October 2001, we launched our first Australian
Customer Service Charter in a further step towards
improving ANZ’s value and service to its customers.
We also promised to have our performanceagainst the promises in the Customer Charter
independently reviewed by ANZ’s auditors, KPMG,
and to publicly report the results. The KPMG review
is underway and the results will be made available
in our Customer Charter Annual Report.
Our internal review of our performance against thepromises in the 2001 Customer Charter has beenencouraging but in some areas we still have work
to do to consistently meet customer expectations.
Our Promise: Simple, fast account opening> Personal Banking – open accounts within
24 hours
Standard Loan Applications> Personal Loans–answered within one working day> Home Loans – answered within two working days
> Car Loans – answered within one working day
If we do not meet these standards, we will refund
one month’s standard fee or equivalent.
Our Performance:> We have improved our processes so we can open
personal bank accounts on the spot. This makes it
difficult to accurately determine delays. However,
we have refunded over $800 in fees in nearly 150
cases where delays have been identified> Nearly 100% of personal loan applications wereanswered within one day> Identified fewer than 2% of home loan
applications which were answered beyond
2 days and refunded over $26,000 of fees.
We are also working towards developing
enhanced systems and processes to ensurecompleteness of reporting for home loans> Over 99% of car loan applications were answered
within one day; refunded over $4,300 of fees
> In total, over $31,000 of fees were refunded foraccounts opened or loan applications answered
beyond our promised times. We are continually
improving our systems and processes to ensurethat we consistently meet our promises
Our Promise: Access> Internet banking and Website – available morethan 99% of the time
> Phone banking service – available more than 98%> Network of ATMs – available more than 98%> Lost & stolen cards hotline – available 24 hours,
7 days a week
> Esanda phone service – available 8am to 7.30pm
AEST weekdays and 9am to 5pm on Saturdays
Our Performance:> We exceeded Internet banking and website
target of 99% except for two months when theavailability was 98.9% and 98.6%> We exceeded Phone Banking and ATM Banking
target of 98%> Internally, our Cards hotline and Esanda phoneservice were staffed for availability 100% of
the times promised. We are also seeking details
from our telecom provider to monitor the extent
to which our telephone lines were accessible byour customers
Our Promise: We will respect your personal
information> We will keep private the information you haveprovided to us
Our Performance:
We have guidelines in place to ensure that wecomply with this promise. We measure ourcompliance based on the privacy–related enquiries
received from our cutomers by our National
Customer Liaison unit. We have received 25 valid
enquiries which we have addressed with ourcustomers. We are further improving our internalmonitoring systems and processes for keeping
our customers’ information private

We expanded the Customer Charter in April 2002,
extending the Charter to cover small businessas well as our personal customers and adding
new promises on fees and quick, convenientbanking services.
Our New Promise:Quick,convenient branch banking> Teller service within 5 minutes and extended
banking hours
Our Performance:> The average waiting time was under 3 minutes
at 40 branches where ANZ has a queue
measurement system. The maximum wait time,
however, was nearly 21 minutes at thesebranches. We are working to improve thisperformance by looking at staffing levels andresourcing for peak periods. We are also
extending banking hours and offering Saturdaybanking at several of our branches
Our New Promise: Fast, efficient phone service> Calls answered within 1 minute and notificationof expected waiting time on our 13 13 14 and13 22 73 numbers

Our Promise: Information we provide to you will be
written in plain language

Our Peformance:> 13 13 14 – 89% calls answered within 1 minute

Our Performance:
We have implemented processes to ensure that we
provide our customers information written in plain
language by using:> 13 22 73 – 94% calls answered within 1 minute> Simple language easily understood by theintended reader> Short, clear and concise statements that avoid
use of jargon> Consistent written expression and punctuation> Structured sentences/paragraphs and headingsthat guide the reader through the communication
Our customer satisfaction score with ourcommunication improved from 6.9 to 7.2 out of 10

Our New Promise: Simple accounts, fees
and charges
Our Performance:> Introduced two new lower cost Access accounts
with simpler fees. For example, Access
Advantage offers unlimited ANZ transactions
for $5 per month. We have also reviewed ourfees and charges and helped our customers
understand them by directly communicating
those which are frequently applicable totheir accounts
Our New Promise: Building relationships withthe community

Our Promise: Resolving complaints—if we make a
mistake, we will put it right> Respond to complaints addressed to our National
Customer Liaison Unit within 48 hours

Our Performance:> Maintained our rural branches and opened a
new branch in Koroit> Resolve complaints within 10 working days

> Continued to offer fee–free branch banking
for seniors> Advise how much longer it will take to resolvethese complaints if it takes more than 10
working days
Our Performance:> We responded to 100% of complaints received
by our National Customer Liaison unit within
48 hours> We resolved 70% of complaints within 10 days
> We are developing a comprehensive complaint
resolution system which will help us ensurecompleteness of reporting and further improve
our performance> Continued to offer 15 fee–free transactions andno monthly fee for Centrelink payment recipientsand healthcare cardholders

We’ve madepromises to ourcustomers that we
intend to keep.

Corporate GovernanceStatement
Board Responsibility

Board Composition

Performance of Chairman and Directors

The Board is responsible to shareholders for theoperations of the Company. It sets the strategic
direction and financial objectives for the Company
and delegates responsibility for the managementof the Company to the Chief Executive Officer andsenior management. The Board is responsible for
ensuring that the Company has appropriate
governance arrangements in place for the benefitof all shareholders.

Board Size & Membership

The full Board is responsible for reviewing theperformance of the Chairman. It is the
responsibility of the Chairman, with input from theNominations & Corporate Governance Committee,
to assess the performance of each director.

The Board aims to carry out its responsibilities
so as to create and build sustainable value for the
benefit of shareholders and other stakeholders.
The Board has adopted a Charter which sets out,
among other things, roles and responsibilities of
the Board. The Board’s responsibilities include:At the time of this report, the Board comprises
eight directors; a non–executive chairman, sixother non–executive directors, and the Chief
Executive Officer.

> Appointing the Chief Executive Officer, andreviewing his/her performance and remuneration> Setting objectives, strategies and budgets, andmonitoring and assessing management’s
performance in achieving each> Monitoring compliance with regulatory
requirements and ethical standards> Approving policies and overseeing governanceand compliance practices relating tomanagement of risk, conduct of internal audit
and human resources management
The Board is also responsible for reviewing
the operations of all Business Units together
with the major functional areas of the Company
at least once per year to satisfy itself that each
Unit’s strategy, policy and direction are consistent
with those of the Company.
The Board recognises its overriding responsibility
to act honestly, fairly, diligently and in accordancewith the law in serving the interests of ANZ’sshareholders, as well as its employees, customers,
and the community. The Board works to promoteand maintain an environment within ANZ that
establishes these principles as basic guidelines for
all its employees and representatives at all times.
Directors meet regularly in private sessions without
management being present. Non–executive
directors also meet regularly, at least twice a year,
without the Chief Executive Officer or management
being present.

Directors, as a Board and through the Nominations& Corporate Governance Committee of the Board,
regularly review the size and composition of theBoard. It is policy that, at a minimum, the Board becomprised of five directors. The Board’s policy also
states that the Chairman be a non–executive
director and that the majority of the Board becomprised of non–executive directors.

Director Appointments
The Board aims to bring a balance of skills,
experience and views to its deliberations. The
Board, through the Nominations & Corporate
Governance Committee, engages external
consultants to assist it in identifying appropriate
candidates for consideration as Board members.
On their appointment, directors are provided withinformation setting out their entitlements, duties
and responsibilities including Board policies.
Current Directors
At the time of this Annual Report, the Board
comprises:
Mr. Charles Goode AC, Chairman
Mr. John Dahlsen
Dr. Roderick Deane
Mr. Jerry Ellis
Mr. David Gonski AO (appointed February 2002)
Ms. Margaret Jackson
Mr. John McFarlane OBE, CEO
Dr. Brian Scott AO
Further details on directors are available on pages
46 and 47 of this Annual Report.
Independence & Directors’ Dealings
All non-executive directors have been determinedby the Board to be independent and, other than in
their capacity as a director of the Company, not tohave a material relationship with the Company.
Details on the definition of ‘independent’ and‘material relationship’ as determined by the Board
can be found on www.anz.com.
The Board has adopted a policy on Disclosure ofInterests which provides processes for:
> The disclosure by directors of certain interests> How actual or potential conflicts of interest are to
be addressed
A copy of this policy is available on www.anz.com.

Retirement
Directors are required to retire at the age of 70
years. Directors appointed since 1993 have agreed
to retire after fifteen year’s service.
Work of the Board
Access to Directors
Employees and shareholders have access to thedirectors either directly or through the Company
Secretary.
Operational Familiarisation
Directors take part in site visits to branches andvarious areas of the Company’s operations in orderto familiarise themselves with the Company’sbusiness. To facilitate interaction between
management, customers and directors,
information briefings with management andcustomers as well as social and working events arescheduled regularly. In addition, directors
participate in shareholder briefings held inAustralia and overseas at regular intervals.
Briefings & Updates
As appropriate and when required, directors takepart in various Company briefings and updates on
key business issues, emerging trends, mattersrelevant to their role as directors and changes intechnology or support systems.
Independent Advice
In order to assist directors to fulfil their
responsibilities, each director has the right,
with the prior approval of the Chairman, to seek
independent professional advice regarding their
responsibilities at Company expense. In addition,
the Board and each Committee may obtainprofessional advice at Company expense
if required to assist in their work.

42
43

Board Committee Structure
Main Committees
In February 2002, the Board commenced a review
of its corporate governance practices. The outcomesof the review, now largely implemented, resulted in
the formation of new Committees, new membership
structure of Committees, updated Committee
Charters and the dissolution of the Human
Resources Committee (as of March 2002).
There are now four main Board Committees:> Audit Committee> Risk Management Committee> Nominations & Corporate Governance Committee(with effect from 1 July 2002)> Compensation Committee (with effect from
1 July 2002)
Each of the four main Committees is comprised
solely of independent directors (as previously
defined), has its own Charter and has the power
to direct any special investigations it deems
necessary. A copy of each Committee Chartercan be found on www.anz.com.
The Chief Executive Officer, John McFarlane,attends all Committee meetings by invitation ofeach Committee. He is not present, however, if this
could compromise proceedings. He also does notattend any meeting where his remuneration or
performance is considered or discussed. Directors
may attend any meeting of a committee when
it is discussing a subject in which they have a
special interest.
Audit Committee> Mr. John Dahlsen, Chairman> Mr. Charles Goode> Ms. Margaret Jackson> Dr. Brian Scott
The Audit Committee is responsible for theappointment, evaluation, compensation andoversight of the external auditor. It also oversees
and monitors the Company’s financial reporting
principles, controls, policies and procedures, thework of the internal audit group, the integrity of theCompany’s financial statements and prudential
supervision procedures as required by regulators.

All members of the Audit Committee must be
financially literate and at least one member of theCommittee be determined to be a ‘financial expert’as defined by the Board. Further details on thedefinition of ‘financial expert’ can be found on
www.anz.com.

Nominations & Corporate Governance Committee

The Audit Committee meets at least four times per
year. The external auditor and the head of internal
audit attend every meeting of the Audit Committee
by invitation. It is the policy of the Audit Committee
to meet with the external auditor in the absence ofmanagement at each of its regularly scheduled
meetings. The Chairman of the Audit Committee
also meets separately and regularly with the headof internal audit and the external auditor.

The purpose of the Nominations & Corporate
Governance Committee is to identify individuals
qualified to become Board members andrecommend them to the Board for nomination
as members of the Board and its Committees;
to review the performance of the Board and themembers of the Board; to review and recommend
corporate governance principles, practices
and procedures for ANZ; and to review the Board
and Committee structure to ensure that theBoard can properly perform its oversight andmonitoring function. The Committee meets at least
twice a year.

The Audit Committee and the Board haveapproved a policy on the provision of audit and
non–audit services by the external auditor, which
effectively limits the non–audit services that may
be provided by the external auditor. A copy of thispolicy can be found on www.anz.com.
Risk Management Committee> Mr. Jerry Ellis, Chairman> Mr. John Dahlsen> Dr. Roderick Deane> Mr. David Gonski> Mr. Charles Goode> Ms. Margaret Jackson> Dr. Brian Scott
The Risk Management Committee’s function is toreview risk in the business. It is responsible foroverseeing and monitoring the Group’s risk
management principles and policies, strategies,
processes and controls including credit, market,
balance sheet and operating risk. It may approvecredit transactions and other matters beyond theapproval discretion of executive management.
The Risk Management Committee met nine times
during the year. Further details on ANZ’smanagement of risk issues can be found on
pages 38 and 39 of this Annual Report.

ANZ has been recognised
in a major shareholder survey
as being one of the best
governed companies in Australia.

> Dr. Brian Scott, Chairman> Mr. David Gonski> Mr. Charles Goode> Ms. Margaret Jackson

Compensation Committee> Dr. Brian Scott, Chairman> Mr. John Dahlsen> Dr. Roderick Deane> Mr. Jerry Ellis> Mr. David Gonski> Mr. Charles Goode> Ms. Margaret Jackson
The Compensation Committee makes
recommendations to the Board in respect of theCompany’s compensation program including any
equity–based programs and evaluates theperformance of and recommends the compensation
for senior executive officers and Board appointees
including the Chief Executive Officer. The
Compensation Committee meets at least threetimes during the year. Details on ANZ’sremuneration policy, including equity–based
remuneration, can be found on page 52 of thisAnnual Report.
Additional Committees
In addition to the four main Board Committees, theBoard has constituted the Shares Committee andthe Executive Committee which convene whennecessary. The Shares Committee, comprising aminimum of two directors, has the power toadminister the Company’s Employee Share Plan
and Employee Share Option Plan. The Executive
Committee, comprising three directors, has the fullpower of the Board and is convened as necessary
in between regularly scheduled Board meetings.
The Board also forms and delegates authority to ad
hoc Committees of the Board as and when needed
to carry out its functions.
On page 45 is a table setting out details of
directors’ attendance at Board and Committee
meetings during the course of the last
financial year.

Corporate GovernanceStatement (cont)
Remuneration of Non–Executive Directors

Company Policies

Relationship with the External Auditor

Non–executive directors’ fees are determinedby the Board of Directors based on advice fromexternal advisors including reference to fees
paid to non–executive directors of comparable
companies.

The Board has approved and adopted policies toapply to employees within the Group. Summariesof the policies can be found on www.anz.com.

Non–executive directors’ fees are within the limit
approved by shareholders at the 21 January 1998
Annual General Meeting. Directors’ fees are set atlevels that fairly represent the responsibilities ofand time spent by the non–executive directors on
ANZ–related matters.

These policies set out the ethical standards
expected of directors and employees. The codes
require that directors and employees adhere to thelaw, that they disclose their own relevant interests,
that they act in the best interest of the Group andthat they act honestly and ethically in all theirdealings. The policies also cover such matters as
the confidentiality of information, acceptance ofgifts or entertainment and use of ANZ goods,
services and facilities.

As highlighted on page 43, the Audit Committee
policy on non–audit services states theaudit–related and some non–audit services that
may be conducted by ANZ’s external auditor.
It sets in place a formal approval process regarding
the provision of non–audit services, which are only
considered where they are not perceived to be inconflict with the role of auditor. This approval
process is the responsibility of the
Audit Committee.

Directors may elect to take all or part of their feesin shares under the Directors’ Share Plan which
was approved by shareholders at the 1999 Annual
General Meeting. Under this plan, shares arebought on market to an equivalent value to thefee that would otherwise have been paid to thedirector and are held in trust for the director forat least one year.
Non–executive directors also participate in the
directors retirement plan, which provides that,after eight years of service, a director may receivea retirement benefit equivalent to the last thirty six
months of fees (pro–rated for a lesser period ofservice).
On page 45 is a table detailing the remunerationof each non–executive director for the last
financial year.
Equity Participation by Non–Executive Directors
It is Board policy that all directors have a sharequalification of at least 2000 ANZ shares.
In addition, as set out above, directors may
participate in the Directors’ Share Plan. Detailsof directors’ shareholdings are set out on page 45of this Annual Report.
Executive Remuneration including Employee Shareand Option Plans
The objective of ANZ’s remuneration policy is
to ensure that remuneration packages properlyreflect the duties and responsibilities of thesenior executives and are sufficient to attract,
retain and motivate personnel of the requisite
quality. The policy focuses on creating value
for shareholders by rewarding senior employees
based on enhancement of shareholder value
through improvements in Economic Value
Added™ (EVA™).
There are three components to executive
remuneration packages, a fixed component andtwo variable or ‘at risk’ components; short–term
incentive (STI) and long–term incentive (LTI). The
fixed reward is generally targeted to the market
median levels being paid in the finance industry in
the relevant markets in which ANZ operates. The
STI and LTI components are based on performanceand reflect achievements against agreed key result
areas and competencies.
A detailed discussion on executive remuneration
and a table setting out the remuneration of senior
officers of the Company can be found on page 53of this Annual Report.

Code of Conduct for Directors and Code of
Conduct for Employees

Market (Information) Disclosure Policy (reviewed
and updated in 2002)
ANZ is committed to achieving best practice in thearea of market disclosure. The policy is designed toensure that there is full and timely disclosure of
ANZ’s activities to shareholders and the market. It
is important that all shareholders have an equal
opportunity to receive or obtain information issued
by ANZ. This policy covers announcements thatmust be lodged with stock exchanges as well as
announcements and presentations made to
analysts, investors and the media. It requires thatonce material information is disclosed to therelevant stock exchanges, it will be placed on
www.anz.com.
Share Trading Policy (reviewed and updated in 2002)
The policy covers trading in ANZ securities bydirectors and all employees as well as contractors
and consultants engaged by ANZ. The Share
Trading Policy prohibits trading for all persons
aware of unpublished ANZ price sensitive
information. In addition, it specifically prohibits
trading by directors, certain employees,
contractors and consultants working in specificareas of the Company during blackout periods.
There are two blackout periods each year,
covering approximately six weeks leading
up to the day after the announcement of thehalf year and full year results.
Employee Indemnity Policy
This policyprovides that the Company will indemnify
employees against any liability incurred in carryingout their roles subject to certain requirements
being met. Further details on this policy andon
indemnities given tocertainemployees can befound on page 54 of this Annual Report.
Serious Complaints Process (approved in 2002)
ANZ has a history of implementing policies andprocedures consistent with responsible andwell–managed business practices. The Serious
Complaints Process is an additional mechanism
by which ANZ staff, contractors and consultants
may voice concerns they have regarding any
potential malpractice or impropriety that they findwithin ANZ. It is intended to operate as a last resort
and requires that protection be given to employees
against dismissal or penalty as a result of
disclosing concerns in good faith.

Significant Accounting Policies
Details of the significant accounting policies
and any changes in accounting policies madesince the date of the last Annual Report are set
out in the Financial Report and on www.anz.com.
Group (Internal) Audit
Group Audit provides independent assurance thatthe design and operation of the risk and control
framework across the Company is effective. Theinternal audit function operates under a Charter
from the Audit Committee that gives it unrestricted
access to review all activities of the Company.
The Group General Manager Audit reports to the
Chairman of the Audit Committee.
A risk–based audit approach is used to ensure thatthe higher risk activities in each business areaudited each year. All audits are conducted in amanner that conforms to international auditing
standards. Group Audit plays an active role inensuring compliance with the requirements ofsupervisory regulatory authorities, including
APRA. Group Audit also works collaboratively withthe external auditor to ensure a comprehensive
audit scope.
Political Donations
In Australia in the year to September 2002, ANZ
donated $150,000 to the Liberal Party and$75,000 to the Labor Party.

We’ve madereal progress inreinforcing a strong
framework of good
governance.

44
45

Non-Executive Director Emoluments
Fees Paid
Cash

Value ofdeferred shares1

Subsidiary
Board

Committee
Chairman’s fee

Retirement
BenefitSuperannuation
contributions

Total

Non-executive directors
C B Goode (Chairman)J C Dahlsen
R S Deane
J K Ellis
D M Gonski
M A Jackson
B W Scott
G K Toomey

76,000110,000
110,000
89,00071,194110,000
83,748–274,000––
21,000––26,252–––
93,744–
17,747
5,824–––
17,500–17,500––13,750
–

–
–
–
–
–
–
–
98,090

9,468
9,464
8,954
9,464
6,556
9,309
9,464
–

359,468
136,964
212,698
136,964
95,497125,133
133,214
98,090Total

649,942

321,252

117,315

48,75098,09062,6791,298,028

Amounts in $

2

4

3

1 Participation in Directors’ Share Plan. Value of shares at the date they were purchased on market
2 Appointed 7 February 2002
3 Fees paid in NZ$ converted at average exchange rate of 1.20
4 Resigned 8 October 2001

Directors’ Meetings
The number of Board meetings and Committee meetings held during the year, and attended by each director are set out in the following table:C B GoodeJ C Dahlsen
R S Deane
J K Ellis
D M Gonski
M A Jackson
J McFarlane
B W Scott
1

2

Board
A
B

Risk
Management
A
B

10 10
10 9
10 10
10 10
7 6
10 10
10 10
10 10

9
9
9
9
7
6
9
6

8
7
6
9
6
5
7
5

Audit
A B

8
8
–
–
–
8
–
8

8
8
–
–
–
8
–
8

Human
Resources
A
B

3

Executive
Committee
A
B

SharesCommittee
A
B

Committeeof the Board
A
B

Nominations& Corporate
GovernanceCommittee
A
B

Compensation
Committee
A
B

2
–
–
2
–
–
2
2

2
–
–
2
–
–
2
2

7
3
–
–
–
3
7
–

7
–
–
3
–
–
1
7

7
–
–
1
–
1
6
–

1
1
–
–
1
1
–
1

1
1
1
1
1
1
1
1

7
3
–
–
–
3
7
–

7
–
–
3
–
–
1
7

7
–
–
1
–
1
6
–

1
1
–
–
1
1
–
1

4

1
1
1
1
1
1
1
1

Column A - Indicates the number of meetings the Director was eligible to attend
Column B - The number of meetings attended. The Chairman is an ex-officio member of all Board Committees
1 New Zealand resident
2 Appointed 7 February 2002
3 Disbanded 31 March 2002
4 Formed 1 July 2002

Directors’ Shareholdings
Shares

Options2

Non-beneficially held
SharesC B GoodeJ C Dahlsen
R S Deane
J K Ellis
D M Gonski
M A Jackson
J McFarlane
B W Scott218,779
83,40075,00057,601
2,000
73,406
1,132,370
69,982––––––2,500,000–

143,986
8,500
–
–
–
–
–
–

Total

1,712,538

2,500,000

152,4861

Beneficially held

1 Shares include deferred shares
2 750,000 options are exercisable at $11.49 from 31 December 2002 to 31 December 2004 inclusive, 750,000 options are exercisable at $14.78 from 31 December 2003 to 31 December 2004 inclusive and500,000 options are exercisable at $17.20 from 31 December 2004 to 31 December 2005 inclusive; however, the options may be exercised only if the ANZ Accumulation Index over the period from the date on
which the options are granted to the last trading day of any month occurring during the relevant exercise period equals or exceeds the ASX 100 Accumulation Index calculated over the same period.
500,000 options are exercisable at $17.52 from 31 December 2003 to 31 December 2007 inclusive; however, one half of the options may be exercised only if the ANZ Total Shareholder Return (“ANZTSR”)
calculated over the period commencing on the date of grant and ending on the last day of any month after the second anniversary of their date of grant exceeds the percentage change in the S&P/ASX 200 Banks(Industry Group) Accumulation Index (formerly the Accumulated Banking and Finance Index) over that same period; the other half of the options may be exercised only if the ANZTSR calculated over the relevant
period exceeds the percentage change in the S&P/ASX 100 Accumulation Index over that same period.

Board of Directors

Mr. C B Goode AC
B Com (Hons) (Melb),
MBA (Columbia University, New York),
Hon LLD (Melb), Hon LLD (Monash)

ChairmanCompany Director.
Director since July 1991,
appointed Chairman August 1995.
Mr Goode is ex–officio member ofall Board Committees. Mr Goode is
Chairman of Woodside Petroleum
and Director of Singapore Airlines
Ltd. Chairman of the Ian Potter
Foundation and Howard Florey
Institute of Experimental
Physiology and Medicine.
Lives in Melbourne. Age 64

Dr. B W Scott AO
B Ec, MBA, DBA

Company Director.
Director since August 1985. Dr Scottis Chairman of the Nominations &Corporate Governance Committee
and Compensation Committee andMember of the Audit Committee
and Risk Management Committee.
Chairman of Management Frontiers
Pty Ltd, and The Foundation for
Development Co-operation Ltd. Directorof Air Liquide Australia Ltd and the James
N. Kirby Foundation Ltd. Australian
member of the Board of Governors,
Asian Institute of Management. Former
Federal President, Institute of Directors
in Australia.
Lives in Sydney. Age 67

Mr. J K Ellis
MA (Oxon) FAICD, Hon FIE Aust, FAusIMM, FTSE

Company Director.

Appointed October 1997. Directorships include
The Business Council of Australia, the Australian
Graduate School of Management and the Financial
Markets Foundation for Children. Former Group
Executive Director, Standard Chartered PLC(1993–1997), Head of Citibank, United Kingdom(1990–1993), Managing Director, Citicorp
Investment Bank Ltd (1987–1990), Director
London Stock Exchange (1989–1991).

Director since October 1995.
Mr Ellis is Chairman of the
Risk Management Committee
and member of the Compensation
Committee. He is Chairman ofPacifica Group Ltd,
Australia–Japan Foundation
and Black Range Minerals Ltd.
Director of GroPep Ltd andChancellor of Monash University.
Former Chairman, BHP Ltd
and International Copper
Association Ltd.

Lives in Melbourne. Age 55

Lives in Melbourne. Age 65

Mr. J McFarlane OBE
MA, MBA

Chief Executive Officer.

46
47

Dr. R S Deane
PhD, B Com (Hons), FCA, FCIS, FNZIM

Company Director
Director since September 1994. Dr Deane
is a member of the Risk Management
Committee, Compensation Committee
and Chairman of ANZ Banking Group(New Zealand) Ltd. He is Chairmanof Telecom New Zealand Ltd,
Fletcher Building Ltd and Te Papa
Tongarewa (Museum of New Zealand).
He has a number of directorships
including TransAlta Corporation (Canada)
and Woolworths Ltd. Formerly Chief
Executive and Managing Director,
Telecom New Zealand Ltd, Chief
Executive, Electricity Corporation of
New Zealand Ltd, Chairman of Fletcher
Challenge Ltd, State Services
Commission, Alternate Executive Director,
International Monetary Fund and Deputy
Governor, Reserve Bank of New Zealand.

Ms. M A Jackson
B Econ, MBA, FCA

Company Director.
Director since March 1994. Ms Jackson
is a member of the Audit Committee,
Risk Management Committee,
Compensation Committee andNominations & Corporate GovernanceCommittee. She is Chairman of Qantas
Airways Ltd, Chairperson of Methodist
Ladies College. Director of The Brain
Research Institute and Billabong
International Ltd. Board Memberof Howard Florey Institute ofExperimental Physiology and Medicine.

Lives in Wellington, New Zealand. Age 61

Lives in Melbourne. Age 49

Mr. J C Dahlsen

Mr. D M Gonski AO

LLB, MBA (Melb)B Com, LLB

Solicitor and Company Director.

Company Director.

Director since May 1985. Mr Dahlsen is
Chairman of the Audit Committee and amember of the Risk Management Committee
and Compensation Committee. Mr Dahlsen
is a former Consultant to and Partner of thelegal firm Corrs Chambers Westgarth. He is
Chairman of Southern Cross Broadcasting(Australia) Ltd, and a director of The Smith
Family and J. C. Dahlsen Pty Ltd Group.
Former Chairman of Woolworths Ltd,
Melbourne Business School Ltd, The Herald
and Weekly Times Ltd and Deputy Chairman
Myer Emporium Ltd.

Director since February 2002. Mr Gonski
is a member of the Risk Management
Committee, Compensation Committee
and the Nominations & Corporate
Governance Committee and a Director of
ING Australia Ltd. He is Chairman of Coca
Cola Amatil Ltd and Investec Wentworth
Pty Ltd, Director of Westfield Holdings Ltd
and John Fairfax Holdings Ltd. Mr Gonski
is Chairman of the National Institute ofDramatic Art (NIDA) and the Art Galleryof New South Wales.

Lives in Melbourne. Age 67

Lives in Sydney. Age 49

Guide to the Financial Report

Introduction

AssetsThe Annual Report of ANZ is a key communication
to our stakeholders. ANZ presents two reports,
the ANZ Annual Report (this document) and the
ANZ Financial Report. Both reports show how ANZ
performed during the year ended 30 September
2002 and the overall financial position of theGroup at the end of the year. ANZ also publishes
a results announcement to the market each halfyear. All these documents can be accessed on
www.anz.com.

ANZ’s assets include:

ANZ prepares its financial reports in accordancewith Australian Accounting Standards. Particular
terms required by the Standards may not befamiliar to some readers and this guide isdesigned to assist readers to better understandthe report.
Annual Report Contents> Liquid assets – the cash or cash equivalents
held by ANZ> Due from other financial institutions – themonies owed to ANZ by other banks andfinancial institutions> Trading securities – the securities held by ANZ
that are regularly bought and sold as part of its
normal trading activities> Investment securities – the investments insecurities that ANZ intends to hold to maturity> Net loans and advances – ANZ’s largest asset
by value, this consists of the loans ANZ has
advanced to individuals and organisations,less an allowance for doubtful loan recoveries

The ANZ Annual Report has two main sections.
The front section contains information aboutsignificant matters that impacted the management
and performance of ANZ during the year, including
discussion and analysis of the financial results,
updates on the 17 business units and Group–wide
programs and information on the directors andsenior management.

> Customers’ liabilities for acceptances – theamounts owed to the Group from customers for
acceptances, a form of lending

The back section, the Concise Financial Report,
contains financial information required byAustralian Accounting Standards including theConsolidated Statements of Financial Performance,
Financial Position and Cash Flows. Thesestatements have been prepared by ANZ’s staff,
reviewed by ANZ’s Audit Committee and Board,and audited by our external auditor, KPMG.
The assets, liabilities and results of controlled
companies are included within the consolidated
results of the Group.

> Regulatory deposits – the cash ANZ has
deposited at central banks to meet regulatory
requirements

Consolidated Statement of Financial Performance
Financial performance refers to ANZ’s profit for theyear including:> The sources of ANZ’s income split between
interest income and other income> The expenses incurred by ANZ during the year,
which include interest expense and otherexpenses> The provision for doubtful debts which
represents the economic loss provisioning(ELP) charge> Life insurance investment assets – the assets
held in life insurance investment funds. For theyear ended 30 September 2002, this figure isnil as ANZ sold its life business into a joint
venture company> Shares in associates – ANZ’s investment incompanies where the interest is large enoughto provide influence rather than control overthe company> Deferred tax assets – the future tax savings to theGroup as a result of timing differences that arise
due to different treatment of transactions underaccounting and tax rules> Goodwill – the remaining amount, after
amortisation, of the historic excess over net asset
value paid by ANZ for the acquisition of othercompanies> Other assets – includes the assets that do not
fit into the above categories including theincrease in market value of amounts receivablefrom derivatives (refer also to ‘Payables andother liabilities’) and interest accrued and not
yet received> ANZ’s tax expense for the year

> Premises and equipment – the value of all theland, buildings, furniture, equipment, etc. which
is owned by the GroupThe key figure to look at is ‘Net profit attributable
to shareholders of the Company’, which is the
profit for the year.

Liabilities

Consolidated Statement of Financial Position
This Statement is a summary of the assets,
liabilities and shareholders’ equity as at 30
September 2002. It shows what ANZ as a Groupowns as assets, what it owes as liabilities and the
ANZ Group’s net assets. Net assets are equal tototal shareholders’ equity.
The assets and liabilities are listed in order ofliquidity, with those assets representing cash
shown first and those hardest to convert to cashi.e. fixed assets, last.

ANZ’s liabilities include:> Due to other financial institutions – the monies
owed to other Banks and financial institutions
by ANZ> Deposits and other borrowings – ANZ’s largest
liability, this represents ANZ’s obligation
to its depositors> Liability for acceptances – the amount owed
to customers who have purchased customer
acceptances from the Group> Income tax liabilities – the amounts payable
in respect of income tax> Payables and other liabilities – includes various
operating creditors, accrued interest payable
and market value of amounts payable onderivatives held by the Group> Provisions – the Group’s accrued obligation forlong service, annual leave, dividend payments
and other obligations which although known,
are not yet payable> Life insurance policy liabilities – the amounts
owed to investors in the Group’s life insurance
investment funds. For the year ended 30
September 2002, this figure is nil as ANZ
sold its life business into a joint venture company> Bonds and notes – the Group’s liability forlong–term financing bond and note facilities
issued in wholesale markets to provide
long–term financing> Loan capital – the long-term funding that would
rank behind other creditors, and ahead of only
shareholders’ in the event of a winding up
Net Assets
This term is used to describe the difference
between the value of total assets and the valueof total liabilities. The net asset value of theGroup is equal to total shareholders’ equity.
Total Shareholders’ Equity
Components that make up shareholders’equity are:> Ordinary and preference share capital – theamounts received when shares were originallysubscribed for> Reserves – retained profits plus surpluses ordeficits arising from (for example) revaluationsof properties, foreign exchange gains or losses
on capital in offshore operations> Retained Profits – the amount of profits retainedby the Group
Consolidated Statement of Cash Flows
The Consolidated Statement of Cash Flowssummarises the Group’s cash payments and cash
receipts for the financial year. The values may differ
from those shown in the Consolidated Statementof Financial Performance because the Consolidated
Statement of Financial Performance is prepared onan accrual accounting basis. Notably, the cash flow
statement does not include doubtful debt losses.
Cash in this statement refers to cash on hand,bank deposits and other forms of highly liquid
investments that can readily be converted to cash.
Directors’ Declaration
This declaration contains the directors’ sign–offthat the Annual Report complies with AccountingStandards and provides a true and fair view of theperformance and financial position of the Company.
Audit Report
The independent audit report is the external
independent opinion on the Financial Report.

48
49

Concise Financial Report

This Concise Financial Report cannot be
expected to provide as full an understandingof the Group’s financial performance, financial
position and financing and investing activities
as the Group’s 2002 Financial Report.
The Chief Financial Officer’s Review on pages 23
to 25 provides a discussion and analysis of theconcise financial statements.

2002 Financial Report
A copy of the Group’s 2002 Financial Report,
including the independent Auditors’ Report,
is available to all shareholders, and will besent to shareholders without charge uponrequest. The Financial Report can be requested
by telephone (Australia: 1800 11 33 99,
Overseas: (613) 9615 5989) or by email
to investor.relations@anz.com.

The 2002 Concise Financial Reporthas been derived from the Group’s
2002 Financial Report.

Contents
10 Year Summary
Directors’ Report
Consolidated Statement of
Financial Performance
Consolidated Statement of
Financial Position
Consolidated Statement of Cash Flows
Notes to the Concise Financial Statements
Directors’ Declaration
Independent Auditors’ Report
Financial Highlights in Key Currencies
Exchange Rates
Shareholder Information

50
51
55
56
57
58
60
61
61
61
62

1,2

Ten Year Summary

2002
$m

2001
$m

2000
$m

1999
$m

1998
$m

1997
$m

1996
$m

1995
$m

1994
$m

1993
$m

Financial Performance
Net interest income
Other operating income
Operating expenses

4,018
2,970
(2,905)

3,833
2,573
(3,092)

3,801
2,583
(3,314)

3,655
2,377
(3,300)

3,547
2,142
(3,442)

3,437
2,110
(3,502)

3,327
1,839
(3,397)

3,084
1,754
(3,116)

2,794
1,793
(3,001)

2,539
1,730
(2,975)

Profit before tax, debt
provision and prior period abnormals
Debt provision
Income tax expense
Outside equity interests

4,083
(860)
(898)
(3)

3,314
(531)
(911)
(2)

3,070
(502)
(863)
(2)

2,732
(510)
(736)
(6)

2,247
(487)
(576)
(9)

2,045
(400)
(466)
(8)

1,769
(175)
(469)
(9)

1,722
(237)
(442)
(10)

1,586
(388)
(388)
(7)

1,294
(637)
(190)
(7)

Profit (loss) after tax
before prior period abnormals
Net prior period abnormal profit (loss)

2,322
–

1,870
–

1,703
44

1,480
–

1,175
(69)

1,171
(147)

1,116
–

1,033
19

803
19

460
(213)

Profit (loss) after tax

2,322

1,870

1,747

1,480

1,106

1,024

1,116

1,052

822

247

1

Financial Position
Assets183,105 185,493 172,467 152,801 153,215 138,241 127,604 112,587 103,874 103,045

Net Assets

11,465

10,551

9,807

9,429

8,391

6,993

6,336

5,747

5,504

5,133

Tier 1 capital ratio
Return on average ordinary equity
Return on average assets
Cost income ratio

7.9%
21.6%
1.3%
46.0%

7.5%
20.2%
1.1%
48.3%

7.4%
19.3%
1.1%
51.7%

7.9%
17.6%
1.0%
54.5%

7.2%
15.9%
0.7%
60.9%

6.6%
17.2%
0.7%
63.1%

6.7%
18.3%
0.9%
65.8%

6.6%
17.9%
0.9%
64.4%

6.8%
15.6%
0.8%
65.4%

5.9%
5.0%
0.2%
69.7%

Shareholder value – ordinary shares
Total return to shareholders(share price movement plus dividends)
Market capitalisation
Dividend
Franked portion– interim– finalClosing share price– high– low– 30 Sep

15.3%
26,544
85c
100%
100%
$20.38$16.33$17.6525.5%
23,783
73c
100%
100%
$17.39$13.44$15.9835.3%
20,002
64c
100%
100%
$13.46$9.60$13.2819.6%
16,04556c
75%
80%$12.45$8.58$10.25-15.6%
13,88552c
60%
60%$11.88
$8.45
$9.02

62.4%
17,017
48c
100%
100%
$11.58$7.10$11.2833.9%
10,687
42c
50%
100%
$7.28
$5.41
$7.23

52.4%
8,199
33c
0%
33%
$5.75
$3.55
$5.67

2.0%
5,293
25c
0%
0%
$5.68
$3.78
$3.91

47.2%
5,285
20c
0%
0%
$4.40
$2.53
$4.04

Share information(per fully paid ordinary share)
Earnings per share– basic
Dividend payout ratio
Net tangible assets

147.3c57.8%$6.58

117.4c62.0%$5.96

106.8c
59.1%
$5.49

90.6c
62.1%
$5.21

72.6c
67.8%
$4.98

68.6c
61.6%
$4.59

76.3c
55.5%
$4.24

69.9c
49.1%
$3.94

55.9c
46.4%
$3.58

13.5c
65.6%
$3.43

2

3,4

3

5

No. of fully paid ordinary shares issued (millions) 1,503.9 1,488.3 1,506.2 1,565.4 1,539.4 1,508.6 1,478.1 1,446.0 1,353.6 1,308.2
DRP issue price– interim$19.24 $15.05 $11.62 $10.95 $10.64
$9.77
$5.59
$4.40
$3.78
$3.42
– final– $18.33 $14.45 $11.50 $10.78
$9.92
$7.60
$6.27
$3.73
$4.44
Other information
Points of representation
No. of employees (full time equivalents)
No. of shareholders

6

7

1,018
1,056
1,087
1,147
1,205
1,473
1,744
1,881
2,026
2,136
22,482 22,501 23,134 30,171 32,072 36,830 39,721 39,240 39,642 40,277
199,556 181,035 179,244 214,151 151,564 132,450 121,847 114,829 121,070 115,000

1 From 1997, the annual debt provision charge has been calculated based on economic loss provisioning; prior year data has not been restated for this change in measurement approach
2 Data for 1998, 1999, 2000 and 2001 includes the consolidation of assets in the statutory funds of ANZ Life as required by an accounting standard applicable from 1 October 1999
3 After abnormals and significant transactions
4 From 2001, the return on average ordinary equity calculation accrues the dividend over the year; prior year data from 1997 has been restated for this change in calculation
5 Before goodwill amortisation, abnormals and significant transactions
6 Prior to 1997 excludes temporary staff
7 For 2000, 2001 and 2002 the number of shareholders does not include the number of employees whose shares are held by ANZEST Pty Ltd as the trustee for shares issued under the termsof any ANZ employee incentive plan.

50
51

Directors’ ReportState of Affairs

Future Developments

The directors present their report together withthe concise financial report of the consolidated
entity (the Group), being Australia and New
Zealand Banking Group Limited (the Company)
and its controlled entities, for the year ended
30 September 2002 and the auditors’ report
thereon. The information is provided inconformity with the Corporations Act 2001.

In the directors’ opinion, there have been no
significant changes in the state of affairs of theGroup during the financial year, other than:

Details of likely developments in the operationsof the Group in future financial years arecontained in the Chairman’s Report and the Chief
Executive Officer’s Report. In the opinion of thedirectors, disclosure of any further information
would be likely to result in unreasonableprejudice to the Group.

Principal Activities
The principal activities of the Group during theyear were general banking, mortgage lending,life insurance, leasing, hire purchase andgeneral finance, international and investmentbanking, investment and portfolio management
and advisory services, nominee and custodian
services and executor and trustee services.

>>

Deposits and other borrowings increased
by 8% from $104,874 million to $113,297
million.

>The charge for doubtful debts has
been determined using economic loss
provisioning and is based on the Group’s
risk management models.
The economic loss provision charge
increased from $531 million to $860 million
reflecting a down grade in the overall risk
profile due to the slowing world economy,
and a special provision for doubtful debts
of $250 million. Our economic loss
provisioning models recognise that thegeneral provision balance must be regularly
reviewed, and in rare situations, increased
to cover unusual events. The balance has
been restored to an appropriate level.

There has been no significant change in thenature of the principal activities of the Groupduring the financial year.
At 30 September 2002, the Group had 1,018
points of representation.
ResultConsolidated net profit after income tax
attributable to shareholders of the Company was$2,322 million. Further details are contained in
the Chief Executive Officer’s Report and the Chief
Financial Officer’s Review on pages 7 and 23
respectively of this Annual Report.
Dividends
The directors propose that a final fully franked
dividend of 46 cents per fully paid ordinary
share be declared on 7 November 2002 andbe paid on 13 December 2002. The proposed
payment amounts to $692 million.

>

Net specific provisions were $728 million,
up from $520 million.

>

Gross non-accrual loans decreased to$1,203 million, or 0.9% of net loans andadvances.

>

During the financial year, the following fully
franked dividends were paid on fully paid
ordinary shares:
Type

Cents pershare

Amount before
bonus options
$m

Final

40

595

Interim

39

583

Date ofpayment

14 December
2001
1 July 2002

The final dividend for the year ended
30 September 2001 was paid on 14 December
2001 and is detailed in the Directors’ Report
dated 5 November 2001.
Review of Operations
A review of the operations of the Group during
the financial year and the results of those
operations are contained in the Chairman’s
Report, the Chief Executive Officer’s Report andthe Chief Financial Officer’s Review on pages 6,
7 and 23 respectively of this Annual Report.

Net loans and advances increased by 7%from $123,657 million to $132,060 million,
primarily from growth in mortgage lending
and commercial lending in Australia and
New Zealand.

>

The Group settled its long standing litigation
with National Housing Bank in India (NHB).
This resulted in the recovery of $248 million($159 million after tax) from the net amountof $575 million, which had been provided
when the Group sold Grindlays to Standard
Chartered Bank.
Certain life and general insurance and funds
management businesses were sold to a joint
venture with ING Group, and a 49% interestin the joint venture was acquired. A profit
after tax of $170 million arose on sale of thebusinesses.

While the above matters are those considered
to be significant changes, reviews of mattersaffecting the Group’s state of affairs are also
contained in the Chairman’s Report, the Chief
Executive Officer’s Report and the Chief Financial
Officer’s Review.
Events since the End of the Financial YearNo matter or circumstance has arisen between
30 September 2002 and the date of this reportthat has significantly affected or may
significantly affect the operations of the Group
in future financial years, the results of those
operations or the state of affairs of the Group
in future years.

Environmental Regulation
The operations of the Group are not subject
to any particular and significant environmental
regulation under the law of the Commonwealthor of a State or Territory.
Rounding of Amounts
The Company is a company of the kindreferred to in Australian Securities andInvestments Commission class order 98/100
dated 10 July 1998 pursuant to section 341(1) of
the Corporations Act 2001. As a result, amounts
in this report and the accompanying financial
statements have been rounded to the nearest
million dollars except where otherwise indicated.
Shareholdings
The directors’ shareholdings, both beneficial
and non-beneficial, as at the date of this reportin the shares of the Company are detailed in the
Corporate Governance Statement on page 42 of
this Annual Report.
Share Options

Details of share options issued over un-issued
shares granted to directors, senior executives
and officers, and on issue as at the date of thisreport are shown under Directors’ and Executive
Officers’ Emoluments in this report, and innote 51 of the Financial Report.
No person entitled to exercise any option has orhad, by virtue of an option, a right to participate
in any share issue of any other body corporate.
The names of all persons who currently holdoptions are entered in the register kept by theCompany pursuant to section 170 of the
Corporations Act 2001. This register may beinspected free of charge.
Directors’ Qualifications and Experience
The Board comprises seven non-executive
directors who have a diversity of businessand community experience and one executive
director who has extensive banking experience.
The names, qualifications and experience ofthe directors who are in office at the date ofthis report are contained on pages 46 and 47of the 2002 Annual Report and those pages
are incorporated in and form part of this report.
Special responsibilities and attendance atmeetings by directors, are shown in the
Corporate Governance Statement on page 42of this Annual Report.

Directors’ and Executive Officers’ Emoluments
The Human Resources (“HR”) Committee
assisted the Board in its oversight of major
policies and guidelines relating to the
management of the Group’s human resources.
Its responsibilities included the review of
proposed remuneration and profit sharing
programs, and recommended these programs
to the Board for approval and monitored their
ongoing operation. The HR Committee also
reviewed and approved all remuneration
entitlements for senior executives, including
for the Chief Executive Officer (“CEO”).
As a result of the Board review conducted in
February 2002, the HR Committee was dissolved
and replaced by the Compensation Committeeof the Board.
The Compensation Committee, chaired by
Dr Brian Scott and comprising all non-executive
Directors, is responsible for (amongst otherthings):
>

>

>

>

>

ANZ’s general compensation program - inconsultation with senior management, toreview and recommend to the Board ANZ’sgeneral approach to compensation, andoversee the development andimplementation of compensation programs;
Senior executive compensation program - toreview and recommend to the Board forapproval compensation programs applicable
to ANZ’s senior executives;
CEO compensation - to review andrecommend to the Board for approval
corporate goals and objectives relevant tothe compensation of the CEO, evaluate theperformance of the CEO in light of thosegoals and objectives, and recommend to
the Board the CEO’s compensation levelbased on this evaluation and other relevant
factors;
Executive compensation governance - toreview and approve any statement on
ANZ’s remuneration policy and executive
compensation disclosures that may berequired by any listing rule, legislation,
regulatory body, or other regulatory or
legislative requirement, or any statement
proposed for inclusion in ANZ’s annual
report.
Advising on directors fees - to review thecompensation of non-executive directors
annually. The CEO does not participate indiscussion or decisions relating to his own
remuneration.

The Compensation Committee recommends to
the Board fees for the Chairman or other nonexecutive directors, after receiving independent
external advice. Non-executive directors fees arewithin the limit agreed to by shareholders at
the Annual General Meeting held on 21 January
1998, and are set at levels that fairly represent
the responsibilities of, and the time spent by,
the non-executive directors on Group matters.
Regard is also given to the levels of fees paid
to non-executive directors in comparable
companies.
ANZ’s Compensation Policy
ANZ’s compensation framework has been
designed to support a policy of rewarding
Senior Executives for the delivery of specificperformance targets and the execution of
appropriate business and growth strategies.
This framework aims to differentiatecompensation on the basis of achievement
against both individual and business unit
performance aligned to sustained growthin shareholder value.
ANZ's Senior Executive compensation policy is
structured to provide a fixed salary component,a short-term incentive (STI) and a long-term
incentive (LTI). The STI and LTI are variable or 'at
risk' components of a Senior Executive'scompensation. The compensation frameworkis administered by ANZ's Board of Directors.
The compensation policy is managed aroundthe following guiding principles:>

to focus on creating and enhancing value
for ANZ's shareholders;>to differentiate individual compensationcommensurate with contribution to overall
results and according to individual
responsibility;>

to provide a greater emphasis on 'at risk'
components of total compensation; and>to provide a compensation proposition to
successfully motivate, attract and retain thehigh quality workforce required to deliveron ANZ's business and growth strategies.

The fixed compensation component comprises
salary and superannuation contributions.
The variable or 'at risk' component ofcompensation comprises a semi-annual STI
consisting of cash and deferred shares, anda semi-annual LTI consisting of performancehurdled deferred shares and performance
hurdled options.

ANZ's compensation policy limits increases in
fixed remuneration (salary and superannuation)and emphasises 'at risk' compensation asa method of ensuring payment is contingent
upon and commensurate with the deliveryof measurable performance and thesuccessful execution of other key strategic
business objectives.
The STI is administered under the ANZ Executive
Remuneration Scheme. The STI is determinedbased firstly, on individual Senior Executive
performance against financial and non-financial
measures and, secondly, on overall business
unit performance results. The composition of
the incentive includes both cash and deferredshares, with better relative performance receivinga greater portion of the incentive 'pool'.
The LTI is administered under the ANZ Group
Share Option Plan. The LTI is determined basedon individual performance and the potential todeliver on ANZ's long-term growth and businessstrategies. The composition of LTI consists ofindividual performance-hurdled deferred shares
and/or performance options. The individual
performance hurdle is aligned to ensure senior
executives clearly demonstrate sustained
performance on both long-term financial andnon-financial measures in the interests ofshareholders and employees.
Both deferred shares and options areused as a mechanism to link a significant
portion of senior executives' remuneration
to the attainment of sustained growth inshareholder value.
Recently, ANZ introduced a new form of“indexed-linked” option for executives.
The new option has a dynamic exercise price,i.e. the exercise price will be adjusted in linewith the movement in the S&P/ASX 200 Banks(Industry Group) Accumulation Index (excluding
ANZ). This has replaced the “traditional” option
where executives could benefit from a generalrise in the market. As an additional constraint,
the option can only be exercised if the adjusted
exercise price is equal to or below the originalissue price. This new form of option will ensurethat executives will only be rewarded for the true
outperformance of ANZ’s share price over andabove the movement in the above Index.
The provision of shares and options is
in line with market practice in Australia.

52
53

Director and Executive Emoluments
Details of emoluments paid or payable to non-executive directors are contained in the Corporate Governance Statement of this Annual Report on page 45.
Details of the emoluments of the executive director and of the five executives of the Group or Company receiving the highest emolument for the year ended
30 September 2002, are set out below.
Executive Emoluments
Cash and benefits
Annual Compensation and Short Term Incentive
1

Performance Related Bonus
2
Cash component
Deferred shares

Amounts in $Salary or fees

Benefits

J McFarlane (Managing Director)

1,419,462––

654,189
469,760
658,446
705,761
658,446

8,227
25,973
3,970
3,970
3,970

220,355
458,891
261,865
213,198
256,671

D L Boyles
G Branston3
E Funke Kupper
P J O Hawkins
P R Marriott

Superannuation
contributions

Total

1,398,520

80,5382,898,520

318,645
639,021369,135
295,802359,329

37,584–37,58440,26937,584

1,239,000
1,593,645
1,331,000
1,259,000
1,316,000

1 Benefits include the provision of housing, cars and parking, private health insurance, subsidised loans and certain other expenses
2 Deferred Shares are held in trust for up to 10 years and are restricted for one and three years. Subject to the Board determining otherwise the shares are forfeited if the recipient leaves the Group
within the restricted period for reasons other than retirement, retrenchment, death or disablement. These shares are issued at the 5 day weighted average price up to and including the date of issue.
3 Conversion rate of GBP @ 0.3621

Long term incentive
4,5

Options granted
6,7

8Type I
Value $

Type II

Number Issued

Date

Exercise Price $J McFarlane (Managing Director)
Initial contract approved 1999 AGM 9
New contract approved 2001 AGM10

500,000
500,000

31.12.2001
31.12.2001

17.20
17.52

D L Boyles
G Branston
E Funke Kupper
P J O Hawkins
P R Marriott

70,000113,100
57,00054,00070,00024.04.2002
24.04.2002
24.04.2002
24.04.2002
24.04.2002

18.75
18.75
18.75
18.75
18.75

Number Issued

Date

Strike Price $140,000
28,600131,000
87,000153,000

24.10.2002
24.10.2002
24.10.2002
24.10.2002
24.10.2002

18.06
18.06
18.06
18.06
18.06

4 All options expire seven years from the date of grant except for J McFarlane’s which expire four years and six years respectively from the date of grant. These options are exercisable between three andseven years of the date of grant if certain performance conditions are met. Each option entitles the holder to purchase one ordinary fully paid share in the company. Estimated values calculated usinga modified Black Scholes model, per option, at the dates of issue, were: $2.68 (31 December 2001), $2.95 (24 April 2002), $1.10 (24 October 2002, index linked).
5 Subject to the Board determining otherwise the options are forfeited if the recipient leaves the Group prior to them becoming exercisable for reasons other than retirement, retrenchment, death or
disablement. The number of options issued under long term incentive arrangements is predicated on a market competitive assessment of long term compensation benchmarks. In the event of
retirement, retrenchment, death or disablement the release of options will be pro-rated for those issued on or after 24 April 2002.
6 All Type I options issued except for the first series issued to J McFarlane may be exercised only if the ANZ Accumulation Index over the period from the date of grant to the last trading day of any
month occurring during the relevant measurement period equals or exceeds (for 50% of the options issued) the S&P/ASX 100 Accumulation Index and (for the remaining 50% of the options issued)
the S&P/ASX 200 Banks (Industry Group) Accumulation Index, both calculated over the same period.
7 J McFarlane’s first series of options may be exercised only if the ANZ Accumulation Index over the period from the date on which the options are granted to the last trading day of any month occurring
during the relevant exercise period equals or exceeds the S&P/ASX 100 Accumulation Index calculated over the same period.
8 Type II options have a dynamic exercise price. The final exercise price will be the initial strike price indexed by the change in the S&P/ASX 200 Banks (Industry Group) Accumulation Index excluding
ANZ. These options cannot be exercised if the exercise price falls below the original issue price.
9 Exercisable from 31 December 2004, subject to the performance conditions being met.
10 Exercisable from 31 December 2003, subject to the performance conditions being met.
11

Deferred Shares

J McFarlane (Managing Director)
D L Boyles
G Branston
E Funke Kupper
P J O Hawkins
P R Marriott

NumberValue $––

14,0002,700
12,5009,500
14,800256,635
49,452
228,855
174,468
271,083

11 Deferred shares are held in trust for up to 10 years and are restricted for three years. Subject to the Board determining otherwise the shares are forfeited if the recipient leaves the Group within
the restricted period for reasons other than retirement, retrenchment, death or disablement. The number of shares issued under long term incentive arrangements is predicated on a market
competitive assessment of long term compensation benchmarks. These shares have an additional restriction, ie. the entitlement will only vest in the event of individual performance conditions
being met. In the event of retirement, retrenchment, death or disablement the release of long term incentive shares will be pro-rated.

Directors’ and Officers’ Indemnity
The Company’s Constitution (Rule 11.1)
permits the Company to indemnify each officer
or employee of the Company against liabilities(so far as may be permitted under the
Corporations Act 2001) incurred in the execution
and discharge of the officer’s or employee’s
duties.
It is the Company’s policy that its employees
should not incur any liability for acting in thecourse of their employment legally, within thepolicies of the Company and provided they
act in good faith.
Under the policy, the Company will indemnify
employees against any liability they incur incarrying out their role. The indemnity protects
employees and former employees who incura liability when acting as an employee, trustee
or officer of the Company, or a subsidiary of theCompany at the request of the Company.
The indemnity is subject to the Corporations Act
2001 and will not apply in respect of any liability
arising from:>a claim by the Company;>a claim by a related body corporate;>a lack of good faith;>illegal or dishonest conduct; or>non compliance with the Company’s policies
or discretions.

The Company has entered into Deeds of Access,Insurance and Indemnity with each of its directors
and secretaries and with certain employees andcertain other individuals who act as directors ofrelated body corporates or of another company.
To the extent permitted by law, the Company
indemnifies the individual for all liabilities,
including costs, damages and expenses incurredin their capacity as an officer of the company towhich they have been appointed.
The Company has indemnified the trustees
and former trustees of certain of the Company’s
superannuation funds and directors, former
directors, officers and former officers of trusteesof various Company sponsored superannuation
schemes in Australia. Under the relevant Deeds
of Indemnity, the Company must indemnify eachindemnified person if the assets of the relevantfund are insufficient to cover any loss, damage,liability or cost incurred by the indemnified
person in connection with the fund, being loss,
damage, liability or costs for which theindemnified person would have been entitledto be indemnified out of the assets of the fundin accordance with the trust deed and theSuperannuation Industry (Supervision) Act
1993. This indemnity survives the terminationof the fund. Some of the indemnified persons
are or were directors or executive officersof the Company.

The Company has also indemnified certain
employees of the Company, being trustees
and administrators of a trust which is a
subsidiary entity, from and against any loss,
damage, liability, tax, penalty, expense or
claim of any kind or nature arising out of orin connection with the creation, operation or
dissolution of the trust, where they are acting ingood faith and in a manner that they reasonably
believed to be within the scope of the authority
conferred by the trust.
Except for the above, no person has been
indemnified nor has the Company or a
related body corporate of the Company madean agreement to indemnify any person who
is or has been an officer or auditor of theCompany or of a related body corporate.
During the financial year, and again since theend of the financial year, the Company has
paid a premium for an insurance policy forthe benefit of the directors, secretaries,and executive officers of the Company, anddirectors, secretaries and executive officersof related bodies corporate of the Company.
In accordance with common commercial
practice, the insurance policy prohibits
disclosure of the nature of the liability insured
against and the amount of the premium.
Signed in accordance with a resolutionof the directors.

John Dahlsen
Director
4 November 2002

John McFarlane
Chief Executive Officer

54
55

Australia and New Zealand Banking Group Limited and Controlled Entities
Consolidated Statement of Financial Performancefor the year ended 30 September 2002
2002
$mConsolidated
2001
$m

2000
$m

Total income

12,007

12,824

14,031

Interest income
Interest expense

9,037(5,019)10,251(6,418)

10,241(6,440)Net interest income
Proceeds, net of costs, on disposal of investments
Carrying amount of assets given up
Net profit on disposal of investments
Other operating income
Prior period abnormal income

4,018
566
(392)
174
2,796
–

3,833

3,801

2,573
–

2,583
1,207

Operating income
Operating expenses
Prior period abnormal expenses

6,988(2,905)–

6,406(3,092)–

7,591(3,314)(986)

Profit before debt provision
Provision for doubtful debts

4,083
(860)

3,314
(531)

3,291
(502)

Profit before income tax

3,223

2,783

2,789

Income tax expense
Prior period abnormal tax

(898)
–

(911)
–

(863)
(177)

Total income tax expense

(898)

(911)

(1,040)

Profit after income tax
Net profit attributable to outside equity interests

2,325
(3)

1,872
(2)

1,749
(2)

Net profit attributable to shareholders of the Company

2,322

1,870

1,747

Currency translation adjustments, net of hedges after tax
Revaluation of properties

(98)
–

197
–

170
31

Total adjustments attributable to shareholdersof the Company recognised directly in equity

(98)

197

201

Total changes in equity other than those resulting
from transactions with shareholders as owners

2,224

2,067

1,948

Earnings per ordinary share (cents)
Basic
Diluted

147.3
146.6

117.4
117.0

106.8
106.0

Dividend per ordinary share (cents)

85

73

64

6.58

5.96

5.49

Net tangible assets per ordinary share ($)

The notes appearing on pages 58 to 60 and the discussion and analysis appearing on pages 23 to 25 form an integral part of these financial statements.

Australia and New Zealand Banking Group Limited and Controlled Entities
Consolidated Statement of Financial Position
as at 30 September 2002
Consolidated
2002
$m

2001
$m

AssetsLiquid assets
Due from other financial institutions
Trading securities
Investment securities
Net loans and advances
Customers’ liabilities for acceptances
Life insurance investment assets
Regulatory deposits
Shares in associates and joint venture entities
Deferred tax assets
Goodwill
Other assets
Premises and equipment

7,410
3,815
5,873
3,609
132,060
13,796
–
178
1,692
1,218
180
11,810
1,464

7,794
4,829
4,827
3,487
123,657
14,324
4,774
133
64
1,200
137
18,906
1,361

Total assets

183,105

185,493

Liabilities
Due to other financial institutions
Deposits and other borrowings
Liability for acceptances
Income tax liabilities
Payables and other liabilities
Provisions
Life insurance policy liabilities
Bonds and notes
Loan capital

10,860113,297
13,796
1,340
12,4501,744–
14,7083,445

12,690104,874
14,324
1,335
15,9482,142
4,458
15,3403,831

Total liabilities

171,640

174,942

Net assets

11,465

10,551

Shareholders’ equity
Ordinary share capitalPreference share capital
Reserves
Retained profits

3,939
1,375
534
5,600

3,733
1,526
717
4,562

Share capital and reserves attributable to shareholders of the Company
Outside equity interests

11,44817

10,538
13

Total shareholders’ equity

11,465

10,551

Note

Contingent liabilities

5

The notes appearing on pages 58 to 60 and the discussion and analysis appearing on pages 23 to 25 form an integral part of these financial statements.

56
57

Australia and New Zealand Banking Group Limited and Controlled Entities
Consolidated Statement of Cash Flowsfor the year ended 30 September 2002
2002
$mConsolidated
2001
$m

2000
$m

Inflows (Outflows)

Cash flows from operating activities
Interest received
Dividends received
Fees and other income received
Interest paid
Personnel expenses paid
Premises expenses paid
Other operating expenses paid
Income taxes paid
Goods and services tax received (paid)
Net (increase) decrease in trading securities

10,1483
2,919(5,367)(1,900)(268)(1,893)(853)(28)(1,030)11,05475
2,783(6,703)(1,827)(253)(1,775)
(823)
(53)
(629)

9,916
192
2,460
(6,108)(1,735)(283)(1,199)
(754)
4
(25)

Net cash provided by operating activities

1,731

1,849

2,468

(442)
554
37
(9,441)
(1)

983
909
(27)
(4,829)(36)(1,755)(792)(90)(17,633)(50)(2,851)
2,436(4,005)
3,630(8,109)8,553(1,050)
–

(36)
–

(43)
1,510

(385)
101
248
201

(452)
127
–
(454)

(275)
249
–
(1,405)(10,593)(4,190)(19,840)(1,211)
9,152
362

(826)
890
581

3,111
12,763(843)

4,538(3,519)7,542(2,878)

5,555(1,341)

759
(589)
1
(1,178)
112
–

–
(244)
(1)
(1,028)
114
(495)

152
(147)
(19)
(749)
36
(1,014)

Net cash provided by financing activities

8,427

3,655

17,504

Net cash provided by operating activities
Net cash (used in) investing activities
Net cash provided by financing activities

1,731(10,593)
8,427

1,849
(4,190)
3,655

2,468
(19,840)
17,504

Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Foreign currency translation on opening balances

(435)
9,071
(711)

1,314
6,462
1,295

132
6,634
(304)

Cash and cash equivalents at end of year

7,925

9,071

6,462

Cash flows from investing activities
Net decrease (increase)
Liquid assets - greater than three months
Due from other financial institutions
Regulatory deposits
Loans and advances
Shares in controlled entities and associates
Investment securities
Purchases
Proceeds from sale or maturity
Controlled entities, associates and joint venture entities
Purchased (net of cash acquired)Proceeds from sale (net of cash disposed)
Premises and equipment
Purchases
Proceeds from sale
Recovery from NHB litigation
Other
Net cash (used in) investing activities
Cash flows from financing activities
Net (decrease) increase
Due to other financial institutions
Deposits and other borrowings
Payables and other liabilities
Bonds and notes
Issue proceeds
Redemptions
Loan capital
Issue proceeds
Redemptions
Decrease in outside equity interests
Dividends paid
Share capital issues
Share buyback

The notes appearing on pages 58 to 60 and the discussion and analysis appearing on pages 23 to 25 form an integral part of these financial statements.

Notes to the Concise Financial Statements
1: Basis of preparation of concise financial report
This concise financial report has been derived from the Group’s 2002 Financial Report which complies with the Corporations Act 2001, AccountingStandards, Urgent Issues Group Consensus Views and other authoritative pronouncements of the Australian Accounting Standards Board. A fulldescription of the accounting policies adopted by the Group is provided in the 2002 Financial Report. The accounting policies are consistent withthose of the previous financial year.
2: Critical accounting policies
The Group has identified the following critical accounting policies:>

Economic loss provisioning;>

Specific provisioning;>

Deferred acquisition costs, software assets and deferred income;>

Derivatives and hedging; and>Special purpose and off-balance sheet vehicles.

The ANZ results announcement released on 24 October 2002 contains details of the critical accounting policies. The results announcement can beobtained from www.anz.com.
3: Significant events this financial year
On 19 January 2002, former ANZ subsidiary Grindlays Bank Limited completed the settlement of its long running dispute with India’s National Housing
Bank (NHB). The dispute originated in 1992. Since January 2001 the amount in dispute had been deposited with the Supreme Court of India. Of thisamount (including interest) of Rupees 16.45 billion (AUD 661 million at 19 January 2002 rates), Grindlays recovered under the terms of the settlement
Indian Rupees 6.20 billion (AUD 248 million), with NHB receiving the balance. ANZ in turn received a payment of USD 124 million from Standard Chartered
Bank (SCB) under the terms of an indemnity between ANZ and SCB.
Following an assessment of the general provision balance, a special provision for doubtful debts of $250 million was charged during the year.
Our economic loss provisioning models recognise that the general provision balance must be regularly reviewed, and in rare situations, increased
to cover unusual events. The balance has been restored to an appropriate level.
On 10 April 2002, ANZ and ING Group announced the formation of a joint venture which combines the funds mangement and life insurance business of
ANZ and ING Group in Australia and New Zealand. The joint venture commenced on 1 May 2002 under the name of ING Australia Limited. ING Australia
is owned 49% by ANZ and 51% by ING Group. ANZ contributed businesses and capital valued at $1,839 million, recognising a profit after tax on disposalof $170 million.
4: Dividends
Ordinary Dividends

Interim dividend
Final dividend
Bonus option plan adjustment
Dividends on ordinary shares

2002

2001

2000

$m

$m

$m

583
692
(23)

491
595
(24)

445
528
(32)

1,252

1,062

941

A fully franked final dividend of 46 cents, is proposed to be paid on each fully paid ordinary share on 13 December 2002 (2001: final dividend of 40 cents,
paid 14 December 2001, fully franked; 2000: final dividend of 35 cents, paid 15 December 2000, fully franked). The 2002 interim dividend of 39 cents,
paid 1 July 2002, was fully franked (2001: interim dividend of 33 cents, paid 2 July 2001, fully franked; 2000: interim dividend of 29 cents, paid
3 July 2000, fully franked).
The tax rate applicable to the franking credits attached to the interim dividend and to be attached to the proposed final dividend is 30%(2001: 30%, 2000: 34%).
Preference Dividends

Dividends on preference shares

2002
$m

2001
$m

2000
$m

117

119

102

In 1998 the Company issued 124,032,000 preference shares, raising USD 775 million via Trust Securities issues. The Trust Securities carry an entitlement
to a distribution of 8% (on USD 400 million) and 8.08% (on USD 375 million). The amounts are payable quarterly in arrears. Payment dates are thefifteenth days of January, April, July and October in each year.
Dividend Franking Account
The amount of franking credits available in the Company for the subsequent financial year is nil (2001 and 2000: nil), after adjusting for franking creditsthat will arise from the payment of tax on Australian profits for the 2002 financial year less franking credits which will be utilised in franking the proposed
final dividend and franking credits that may not be accessible by the Company at present.

58
59

5: Contingent Liabilities
There are outstanding court proceedings, claims and possible claims against the Group, the aggregate amount of which cannot readily be quantified.
ANZ in Australia is being audited by the Australian Taxation Office (ATO) as part of normal ATO procedures. The Group has received various assessmentsthat are being disputed and is likely to receive further assessments.
Based on external advice, ANZ has assessed the likely progress of these issues, and believes it holds appropriate provisions.
Further details regarding Group contingent liabilities are contained in the 2002 Financial Report.
6: Segment Analysis
During the year ended 30 September 2002, the Group managed its activities along the following lines of business:
Personal Banking and Wealth Management, Corporate Businesses, Investment Banking, Consumer Finance, Mortgages, Asset Finance, Small to Medium
Business and other. A description of each of the operating business segments, including the types of products and services the segments provide tocustomers, is detailed in the 2002 Financial Report.
1, 2Business Segment Analysis

Personal
Banking& Wealth Corporate Investment
Management Businesses
Banking$m$m$m

Consolidated
30 September 2002

Consumer
Finance Mortgages
$m
$m

Asset
Finance$m

Small toMediumBusiness
$m

Other
$m

Consolidated
Total
$m

External interest income
External interest expense
Net intersegmant interest

555(1,011)
1,533

1,421
(744)
(12)

989
(1,433)
706

598
(1)
(208)

3,671
(159)
(2,830)

967
(472)
(159)

423
(191)
87

413
(1,008)883

9,037(5,019)–Net interest income
Other external operating income
Net intersegment income

1,077
821
306

665
720
(36)

262
538
(4)

389
388
(86)

682
89
(230)

336
69
(8)

319
80
(33)

288
265
91

4,018
2,970
–

Operating income

2,204

1,349

796

691

541

397

366

644

6,988

Other external expenses
Net intersegment expenses(1,056)
(284)

(306)
(139)

(335)
(27)

(234)
(74)

(119)
(42)

(150)
(29)

(124)
–

(581)
595

(2,905)–

Operating expenses(1,340)

(445)

(362)

(308)

(161)

(179)

(124)

14

(2,905)

Profit before debt provision
Doubtful debt provision
Income tax and outside equity interests

864
(38)
(253)

904
(144)
(233)

434
(68)
(55)

383
(161)
(73)

380
(28)
(106)

218
(69)
(47)

242
(16)
(69)

658
(336)
(65)

4,083
(860)
(901)

Profit after income tax

573

527

311

149

246

102

157

257

2,322

Total external assets
Total external liabilities

10,63539,342

42,82240,373

25,66920,654

5,551
249

64,826
3,551

12,410
9,704

6,764
7,589

Asset
Finance$m

Small toMediumBusiness$m

14,428 183,105
50,178 171,640

1 Results are equity standardised
2 Intersegment transfers are accounted for and determined on an arm’s length or cost recovery basis
1, 2Business Segment Analysis

Consolidated
30 September 2001

Personal
Banking& Wealth Corporate Investment
Management Businesses
Banking$m$m$m

Consumer
Finance Mortgages
$m
$m

Other
$m

Consolidated
Total
$m

External interest income
External interest expense
Net intersegment interest

626(1,162)
1,632

1,802
(865)
(268)

1,761
(2,043)
491

567
–
(233)

3,768
(154)
(2,959)

1,012
(552)
(122)

405
(185)
83

Net interest income
Other external operating income
Net intersegment income

1,096
814
272

669
665
(38)

209
548
(8)

334
329
(70)

655
78
(203)

338
59
(9)

303
68
(38)

229
12
94

3,833
2,573
–

Operating income

2,182

1,296

749

593

530

388

333

335

6,406

Other external expenses
Net intersegment expenses(1,038)
(292)

(303)
(147)

(331)
(23)

(205)
(61)

(108)
(42)

(158)
(30)

(113)
(8)

(836)
603

(3,092)–

Operating expenses(1,330)

(450)

(354)

(266)

(150)

(188)

(121)

(233)

(3,092)

Profit before debt provision
Doubtful debt provision
Income tax and outside equity interests

852
(38)
(288)

846
(149)
(231)

395
(64)
(43)

327
(171)
(57)

380
(24)
(120)

200
(65)
(43)

212
(17)
(65)

102
(3)
(66)

3,314
(531)
(913)

Profit after income tax

526

466

288

99

236

92

130

33

1,870

Total external assets
Total external liabilities

13,59739,99844,245
37,13329,851
26,112

4,881
313

55,901
3,014

12,013
9,566

6,013
6,873

1 Results are equity standardised
2 Intersegment transfers are accounted for and determined on an arm’s length or cost recovery basis

310 10,251(1,457) (6,418)
1,376–

18,992 185,493
51,933 174,942

7: Capital Management
The Group’s Tier 1 ratio increased to 7.9% (2001: 7.5%). The total capital adequacy ratio remains strong at 9.5% (2001: 10.3%), with a small reductionin the Tier 2 ratio.
In light of the joint venture with ING Group, we have refined our capital management policy to incorporate certain non-consolidated vehicles. Our principal
focus going forward is Adjusted Common Equity, defined as Tier 1 capital, less preference shares and deductions from total capital, (including investment
in funds management subsidiaries and the ING joint venture). Adjusted Common Equity decreased from 5.9% to 5.7% of risk weighted assets to be
comfortably near the top of our target range of 5.25% to 5.75%, even after funding the joint venture from internal resources.
8. Equity Instruments Issued to Employees
Under existing Australian Accounting Standards, equity instruments issued to employees are not required to be expensed. The impact of expensing
options1, and shares issued under the $1,000 employee share plan, have been calculated and are disclosed below.
Consolidated
2002$m

Net profit attributable to shareholders of the Company
Expenses attributable to:
Options issued to Management Board1
Options issued to general management1
Shares issued under $1,000 employee share plan

2,322

Revised net profit attributable to shareholders of the Company

2,278

Revised earnings per share basic (cents)

144.4

(7)
(19)
(18)

1 Based on fair values estimated at grant date using a modified Black Scholes model. Value of options amortised over vesting period.

9: Events Since the End of the Financial Year
There have been no significant events since 30 September 2002 to the date of this report.

Directors’ Declaration
The directors of Australia and New Zealand Banking Group Limited declare that in their opinion the accompanying concise financial reportof the Consolidated Group for the year ended 30 September 2002 complies with Accounting Standard AASB 1039 ‘Concise Financial Reports’.
In our report on the Group’s 2002 Financial Report we declared that:(a) the financial statements and notes comply with the Corporations Act 2001, including:(i) complying with applicable Australian Accounting Standards and other mandatory professional reporting requirements; and(ii) giving a true and fair view of the financial position of the Company and of the consolidated Group and of their performance as represented by the
results of their operations and their cash flows; and(b) in the directors’ opinion at the date of this declaration there are reasonable grounds to believe that the Company and consolidated Group will be able
to pay its debts as and when they become due and payable.
Signed in accordance with a resolution of the directors

John Dahlsen
Director
4 November 2002

John McFarlane
Chief Executive Officer

60
61

Independent audit report on concise financial
report to the members of Australia and New
Zealand Banking Group Limited
Scope
We have audited the concise financial reportof Australia and New Zealand Banking Group
Limited and its controlled entities for thefinancial year ended 30 September 2002,
consisting of the statement of financial
performance, statement of financial position,statement of cash flows, accompanying notes
as set out on pages 55 to 60, and theaccompanying discussion and analysis set
out on pages 23 to 25 in order to express an
opinion on it to the members of the Company.
The Company’s directors are responsible forthe concise financial report.
Our audit has been conducted in accordancewith Australian Auditing Standards to provide
reasonable assurance whether the concise
financial report is free of material misstatement.

We have also performed an independent
audit of the full financial report of Australia
and New Zealand Banking Group Limited
and its controlled entities for the year ended
30 September 2002. Our audit report on
the full financial report was signed on
4 November 2002, and was not subject
to any qualification.
Our procedures in respect of the audit of theconcise financial report included testing thatthe information in the concise financial report
is consistent with the full financial report andexamination, on a test basis, of evidence
supporting the amounts, discussion and analysis,
and other disclosures which were not directly
derived from the full financial report.
These procedures have been undertaken toform an opinion whether, in all material respects,
the concise financial report is presented fairly inaccordance with Accounting Standard AASB 1039
‘Concise Financial Reports’ issued in Australia.

The audit opinion expressed in this reporthas been formed on the above basis.
Audit Opinion
In our opinion the concise financial reportof Australia and New Zealand Banking Group
Limited and its controlled entities for the year
ended 30 September 2002 complies withAASB 1039 ‘Concise Financial Reports’ issuedin Australia.

KPMG

Peter Nash

Chartered Accountants
MelbournePartner

4 November 2002

Financial Highlights in Key Currencies
2002
AUD

20021
USD

20021
GBP

20021
NZD

Financial Performance
Net income
Operating expenses

6,988(2,905)

3,719(1,546)2,530(1,052)

8,386(3,486)

Profit before tax and debt provision
Provision for doubtful debts

4,083
(860)

2,173
(458)

1,478
(311)

4,900
(1,032)

Profit before tax
Income tax expense
Outside equity interests

3,223
(898)
(3)

1,715
(478)
(2)

1,167
(325)
(1)

3,868
(1,078)(4)

Profit after tax

2,322

1,235

841

2,786

183,105
171,640
11,465

99,627
93,3896,238

63,66659,6793,987

212,127
198,845
13,282

147.3
85
6.58

78.4
45
3.50

53.3
31
2.38

176.8
102
7.90

Millions

Financial Position
AssetsLiabilities
Shareholders’ equity
Ratios – per ordinary share
Earnings per share – basic
Dividends per share – declared rate
Net tangible assets per share
2

1 USD, GBP and NZD amounts – items relating to financial performance converted at average rates for financial year 30 September 2002 and items relating to financial position at closing rates
at 30 September 2002
2 Includes outside equity interests

Exchange Rates
The exchange rates used in the translation of the results and the assets and liabilities of major overseas branches and controlled entities are:
2002

Great British pound
United States dollar
New Zealand dollar

2001

2000

Closing

Average

Closing

Average

Closing

Average

0.34770.5441
1.15850.3621
0.53231.20010.33310.49031.21270.36270.52301.24730.37200.5444
1.33240.39030.61011.2647

Shareholder information
Ordinary shares
At 7 October 2002 the twenty largest holders of ordinary shares held 905,163,558 ordinary shares, equal to 60.19 per cent of the total issued ordinary
capital.
Name

Number of shares%

Chase Manhattan Nominees Ltd
National Nominees Ltd
Westpac Custodian Nominees Ltd
Citicorp Nominees Pty Ltd
RBC Global Services Australia
Nominees Pty Ltd
Commonwealth Custodial Services Ltd
ANZ Nominees Ltd
AMP Life Ltd
MLC Ltd
Queensland Investment Corporation
Cogent Nominees Pty Ltd

215,389,449
195,600,949
142,493,966
85,783,111

14.32
13.01
9.47
5.70

39,023,804
36,087,910
35,355,516
25,810,122
23,335,932
20,285,482
17,644,800

2.59
2.4
2.35
1.72
1.55
1.35
1.17

Name

HKBA Nominees Ltd
Mercantile Mutual Life Insurance
Company Ltd
NRMA Nominees Pty Ltd
ANZEST Pty Ltd
PSS Board
The National Mutual Life Associationof Australasia Ltd
Government Superannuation Office
Australia Foundation Investment
Company Ltd
Victorian Workcover Authority

Number of Shares%

11,962,916

0.80

11,147,276
8,887,753
7,491,859
7,462,405

0.74
0.59
0.50
0.50

6,578,833
5,979,339

0.44
0.40

4,677,049
4,165,087

0.31
0.28

905,163,558
Distribution of shareholdings
At 7 October 2002
Range

Number ofholders% ofholders

Number ofshares% ofshares1 to 1,000 shares
1,001 to 5,000 shares
5,001 to 10,000 shares
10,001 to 100,000 sharesOver 100,001 shares

108,22171,697
11,831
7,421
386

54.2
36.0
5.9
3.7
0.2

49,761,533
161,958,794
84,093,962
158,655,510
1,049,529,283

3.3
10.8
5.6
10.5
69.8

Total

199,556100

1,503,999,082

100

At 7 October 2002:> there were no entries in the Register of Substantial Shareholdings; and> the average size of holdings of ordinary shares was 7,536 (2001: 8,221) shares; and> there were 2,863 holdings of less than a marketable parcel (less than $500 in value (or 28 shares based on a market priceof $17.63), (2001: 1,772 holdings), which is less than 1% of the total holdings of ordinary shares.
Voting rights of ordinary shares
The Constitution provides for votes to be cast:(i) on show of hands, 1 vote for each shareholder; and(ii) on a poll, 1 vote for each fully paid ordinary share.
Preference shares
At 7 October 2002 Hare and Co was the only holder of preference shares and held 124,032,000 preference shares, being 100 per cent of the total issued
preference capital.
Voting rights of preference shares
A preference shareholder may not vote in normal circumstances, but may vote:(i) when a preference share dividend (or equivalent) is not paid by the prescribed quarterly payment date. This entitlement to vote ceases after full
payment of four consecutive quarterly preference share dividends; and(ii) on proposals or resolutions that affect the rights attached to the preference shares including proposals to restructure or wind up ANZ.
Employee shareholder information
At the Annual General Meeting in January 1994, shareholders approved an aggregate limit of 7% of all classes of shares and options,which remain subject to the rules of a relevant incentive plan, being held by employees and directors.
At 30 September 2002 participants held 2.62% of the issued shares and options of ANZ under the following incentive plans:> ANZ Employee Share Acquisition Plan;> ANZ Employee Share Save Scheme;.
> ANZ Share Option Plan; and> ANZ Share Purchase Scheme.

Dear Shareholder,62
63

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Shareholder Information

Dividends

Credit Ratings

Important Dates for Shareholders

The final dividend of 46 cents per share will be
paid on 13 December 2002, 100% franked.
Dividends may be paid directly to a bank accountin Australia, New Zealand or the United Kingdom.
Shareholders who want their dividends paid thisway should advise ANZ Share Registry in writing.
Dividend Reinvestment and Bonus Option plans
are available to shareholders. The plans aredetailed in a booklet called ‘Shareholder
Alternatives’, copies of which are available fromANZ Share Registry at the addresses shown below.

Short Term

Date

Event

13 December 2002

Annual General Meeting(Perth)13 December 2002

Final Dividend Payment

24 April 2003*

Interim Result Announced

1 July 2003*

Interim Dividend Payment

23 October 2003*

Annual Result Announced

12 December 2003*

Annual General Meeting

12 December 2003*

Final Dividend Payment

Moody’s Investors Service
Standard & Poor’s Rating Group

P-1
A1+

Long Term
Moody’s Investors Service
Standard & Poor’s Rating GroupAa3(outlook stable)AA(outlook stable)

Handy Contacts
Stock Exchange Listings
The Group’s ordinary shares are listed on theAustralian Stock Exchange and the New Zealand
Stock Exchange. The Capital Securities offered in
1993 and the Preference Shares issued in 1998
are listed on the New York Stock Exchange.
The subordinated bonds issued by Australia and
New Zealand Banking Group (New Zealand)
Limited in 2002 are listed on the New Zealand
Stock Exchange.

ANZ

American Depositary Receipts

Investor Relations
Level 20
100 Queen Street
Melbourne VIC 3000
Tel: +613 9273 6466
Fax: +613 9273 4899
investor.relations@anz.com

The Bank of New York sponsors an American
Depositary Receipt (ADR) program in the UnitedStates of America and ADRs are listed on the
New York Stock Exchange. ADR holders should
deal directly with the Bank of New York, New York,
telephone (212) 815 2276, fax (212) 571 3050
on all matters relating to their ADR holdings.

Registered Office
Level 6
100 Queen Street
Melbourne VIC 3000
Australia
Tel: +613 9273 6141
Fax: +613 9273 6142
Company Secretary: Tim Paine

2002 Financial Report

Share Registry

A copy of the Group’s 2002 Financial Report,
including the independent Auditors’ Report, isavailable to all shareholders, and will be sent toshareholders without charge upon request. The
Financial Report can be requested by telephone(Australia 1800 11 33 99, Overseas +613 9615
5989), by email at investor.relations@anz.com orviewed directly on the internet at www.anz.com.

Australia
Level 12565 Bourke Street
Melbourne VIC 3000
Australia
Tel: 1800 11 33 99 / 9615 5989
Fax: +613 9611 5710
anzshareregistry@computershare.com.au

Removal from Mailing List
Shareholders who do not wish to receive a copy of
the Annual Report must advise the Share Registryin writing.
Change of Address
Shareholders who have changed their address
will need to advise the Share Registry in writing,quoting their shareholder number, name andcompany if applicable.

New Zealand
Private Bag 92119
Auckland 1020
New ZealandTel: 0800 174 007 or +649 488 8700
Fax: +649 488 8787
Investor Enquiries: +649 488 8777
United Kingdom
Tel: +44 870 702 0000

* tentative dates

ANZ 2002 Annual Reportwww.anz.com