different.
2006 Shareholder Review

our results2006 INVESTOR SNAPSHOT

Customers

Staff

Awarded the Best Call Centre
in Australia for the third year
in a row

Most engaged staff amongst major
Australian companies – 60%

Number 1 lead bank for
Institutional clients in Australia
and New Zealand

Named the Leading Organisation
for the Advancement of Womenin Australia among organisations
with more than 500 employees

Communtiy

Shareholders

Received the Prime Minister’sAward for Excellence in Community
Business Partnership for Impact on
a Community

Our net profit attributable toshareholders of the company was$3,688m, and our Cash Earnings
Per Share was up 13.2%

We offer staff members eight hoursof volunteer leave each year.

The total dividend for 2006 was
125 cents, up 13.6%

–

06

05

195

110

172

05

125

43,83406

49,331

3,175

3,688

05

06

05

06

16%

13%

14%

13%

Net Profit
After Tax

MarketCapitalisation(cents per share)

Dividend

Cash Earnings
Per Share

($m)

1
2
4
6
8

($b)

2006 Investor Snapshot
Chairman’s Report
Chief Executive Officer’s Report
Our Business Performance
Five Year Summary(cents)10 The Board of Directors
12 Director and Executive
		 Remuneration 2006
13 People, Community and the Environment
14 Information for Shareholders

Investor Snapshot 2006 1

growthchairman’s report A MESSAGE FROM CHARLES GOODE
Our performance
Our profit after tax for the year ended 30 September 2006 was $3,688 million, up
by 16%; our cash profit (adjusted for AIFRS 2005 adjustments and non-core items)
was $3,587 million, up 14%; and our profit before provisions was up 10%.
The dividend for the year is 125 cents per share fully franked.
Revenue growth of 8% was the highest for many years. While costs increased by 6%
our cost to income ratio fell by 1.0% to 45.6%. The overall credit environment wasvery favourable with provisions for credit impairment at cyclical lows.
Expansion and Growth
The Personal division achieved exceptional results, with revenue growth of 13% andearnings up 22%. Personal is reaping the benefits of a clear customer proposition– simpler and more convenient banking – along with an expanded branch network,
more ATMs and longer opening hours.
In Institutional, good revenue growth of 8% and low credit losses led to growthin earnings of 11%.
In New Zealand, our integration program was successfully completed. The customer
base has been maintained and is now growing. We have strong businesses with
options for growth.

2   ANZ Shareholder Review 2006

These results are thework of an outstanding
group of people: ourstaff. On behalf of myfellow directors and allshareholders,I thankthem for their effort andcontribution.
expansionCharles Goode - Chairman

Turning to East Asia we celebrated 20
years in China and expanded our presencewith a 20% investment in Tianjin City
Commercial Bank. In Vietnam, ANZ and
Sacombank committed to a joint venture,
and we launched banking services in
Cambodia through ANZ Royal Bank, a joint
venture with Royal Group.

The Board
During the year, Dr Roderick Deane retired
as an ANZ director, and as Chairman and
Director of ANZ National Bank Limited. Dr
Deane joined the ANZ Board in 1994 andmade a very substantial contribution to
our board. We thank Dr Deane and wish
him well in retirement.

Outlook

We are optimistic about economic conditions in Australia and New Zealand. While
growth in the Australian economy is unlikely to exceed current levels, conditions
should still be conducive to reasonable earnings growth. New Zealand’s economy
may well be softer over the next two years, but nevertheless we remain confidentof the long term future for our New Zealand business. Our position in Asia willcontinue to grow in importance.

Charles Goode - Chairman

Chairman’s Report 3

difference

chief executive officer’s report A MESSAGE FROM JOHN McFARLANE

ANZ has once again performed well in 2006 for shareholders and we haveinvested and strengthened our foundation for sustainable growth in future years.
This performance is simply a milestone on a longer journey from the major banks
being perceived as the same, to making ANZ “a very different bank”.
It concerns me that many believe all banks are the same. It would not be so prevalenta view if it was not true. Changing this required us to create tangible reasons:
Why a customer should deal with us?
Why the community should place its trust in us?
Why people should invest their working lives in us?
Why shareholders should invest in us?
So against the trend of cost-cutting, we decided to invest to make “a very differentbank” a reality. This required a major change in emphasis where:
People, customers and the community would become the main focus rather thancosts and short-term return.
We would build a culture and talent base that could not easily be replicated.
We could all sleep at night with the level of risk.

4   ANZ Shareholder Review 2006

performance

In particular we recognised that thebank that comes up with ways toserve our customers better would
win over the long run. Our progress
demonstrates our commitment tosimpler and more convenient banking:In 2006 in Australia, we openeda new branch every fortnight andin 2007 we will open a new branchalmost every week.
In the last four years we added 10,000
new people, including the acquisitionof The National Bank of New Zealand.
We had a very different acquisition
in New Zealand, maintaining separatebusinesses and brands.
With the sizeable opportunity presented
by Asia’s economic growth and theinterdependence between Australia,
New Zealand, and Asia, we have begun
a major push into the region, including
expanding our business in Tianjin andShanghai in China.

We leveraged the technology andoperational capability in Bangalorebuilt over 17 years while maintaininga policy of having customer contact
at home in Australia and New Zealand.
We received special recognition throughthe Prime Minister’s Award for Impact
on a Community.
I am genuinely pleased with ourprogress, but realise it is only the
beginning. Therefore we are raising thebar on revenue growth and accelerating
our efforts to become “a very differentbank”. Our achievements in 2006
demonstrate we are well positioned
to do so.
All in all it has been a good year for
shareholders and I want to thank you
all for your continued confidence in us.

John McFarlane - Chief Executive Officer

Chief Executive Officer’s Report 5

Other – NPAT $132m
Asia – NPAT $125m

Australia

Asia
Cambodia
China
Pacific
Hong Kong
American Samoa Indonesia
Cook Islands
Japan
East Timor
Korea
Fiji
Malaysia
Kiribati
Philippines
Papua New
Singapore
GuineaTaiwanSamoa
Thailand
Solomon Islands Vietnam
Tonga
EuropeVanuatu
United Kingdom
Middle East &New ZealandSouth Asia

Australia – NPAT $2,488m

United Statesof America

6   ANZ Shareholder Review 2006

our focus

A UNIQUE GEOGRAPHICAL PRESENCE

1,258

06

22%

Personal NPAT - ($m)

05

176

169

1006
05

06

20%

New Zealand Banking
NPAT - (NZDm)New Zealand – NPAT $830m

06

11%

Institutional NPAT - ($m)

05

06

839

Pacific – NPAT $113m

1,396

05

1,256

1,033

Our home markets
of Australia and New
Zealand represent
90% of the Group’s
profit. We have grown
our Australian businesssignificantly in recent
years, and we are
the largest bank in
New Zealand.

4%

Partnerships & Private BankNPAT - ($m)

We are the only Australian bank with a significant
presence in Asia, and our representation is amongst
the largest in the region. We have a number of retailpartnerships in the region, and during the year weentered into a new partnership with Tianjin City
Commercial Bank in China. We continue to be indiscussions with Shanghai Rural Commercial Bank,and hope to conclude these discussions soon.
We remain the number one bank in the Pacific, holding
either number one or two position in each market inwhich operate. We also have a substantial presencein the key financial centres of London and New York.

Our Business Performance 7

five year summary

AIFRSPrevious AGAAP

2006
$m

2005
$m

2004
$m

2003
$m

2002
$m

Financial Performance
Net interest income
Other operating income
Operating expenses
Profit before provisions and income tax
Provision for credit impairment
Income tax expense
Minority interest
Cash profit1
Non-core items1

6,943
3,146
(4,605)
5,484(407)(1,486)
(4)
3,587
101

6,371
2,935
(4,340)4,966(565)(1,247)
(3)
3,151
24

5,252
3,267
(4,005)
4,514(632)(1,147)
(4)
2,731
84

4,311
2,808
(3,228)
3,891
(614)
(926)
(3)
2,348
–

4,018
2,796
(3,153)
3,661
(610)
(880)
(3)
2,168
154

Net profit after tax

3,688

3,175

2,815

2,348

2,322

Financial Position
Assets2
Net Assets
Tier 1 capital ratio3
Return on average ordinary equity4,5Cash earnings per share1,
Cost to income ratio6

335,771
19,906
6.8%
20.1%
194.5
45.6%

300,885
19,538
6.9%
19.0%
171.8
46.6%

259,345
17,925
6.9%
17.8%
161.1
45.3%

195,591
13,787
7.7%
20.6%
146.3
45.1%

183,105
11,465
7.9%
21.6%
134.0
46.0%

Shareholder value – ordinary shares
Total return to shareholders(share price movement plus dividends)
Market capitalisation
Dividend
Share price7 –30 Sep

17.1%
49,331125c$26.8632.6%
43,834110c$24.0017.0%
34,586101c$19.02

6.7%
27,31495c$17.17

15.3%
26,54485c$16.88Other information
Points of representation8
No. of employees (full time equivalents)
No. of shareholders9

1,265
32,256291,262

1,223
30,976
263,467

1,190
28,755
252,072

1,019
23,137
223,545

1,018
22,482
198,716

1   ANZ excludes from cash profit significant items,
abnormals, ANZ National Bank integration
costs and volatility associated with fair value
movements relating to economic hedges. ANZ
excludes these items to provide a better indicationof the core business performance. In addition, the2005 cash profit result has been calculated on an
AIFRS basis that is comparable with 2006, allowing
readers to see the impact on 2005 results ofaccounting standards that have only been applied
from 1 October 2005. The adjustment to restate2005 to statutory basis is included in non-core items.
2   From 1998 to 2001, consolidated assets include
the statutory funds of ANZ Life as required byan accounting standard. For the year 2004,
consolidated assets include the statutory fundsof NBNZ Life Insurance Limited.

ANZ Life was sold in May 2002 and NBNZ Life
Insurance Limited was sold on 30 September 2005
3   Calculated in accordance with Australian Prudential
Regulation Authority requirements effective at therelevant date

6    Excludes non-core items. Periods prior to 2005
also exclude goodwill amortisation. The 2005
ratio has been calculated on an AIFRS basis thatis comparable with that of 2006
7    Periods prior to 2004 adjusted for the bonus
elements of the November 2003 Rights Issue

4    Excludes non-core items and minority interest. The
2005 ratio has been calculated on an AIFRS basisthat is comparable with that of 20068    Includes branches, offices, representative offices
and agencies

5    For the periods 1997 to 2002 the return on
average ordinary equity calculation accrues thedividend over the year. From 2003, dividends may
no longer be accrued and are not included in thecalculation of return on average ordinary equity

9    From 2000 onwards the number of shareholders
does not include the number of employees whose
only shares are held by ANZEST Pty Ltd as the trustee
for shares issued under the terms of any ANZ
employee incentive plan

8   Five Year Summary

Strong lending growth partly offset
by lower interest margins.

46.0

45.1

45.3

46.6

45.6

05

268.8

04

245.9

03

217.4

145.9

162.6

02

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

06

02

03

04

05

06

Net Loans and Advances
including Acceptances - ($b)

Cost Income Ratio - (%)

Strong lending growth in Mortgages
in Australia and New Zealand andin Corporate and Business Banking
saw Net Loans and Advances up 9%
in 2006.

Strong income growth enabledcontinued investment in the businessand a reduction of the Cost to Income
Ratio to 45.6% in 2006.

03

04

30,976Net Interest Margin - (%)

02

05

32,25606

28,75505

22,4822.31

04

23,137

2.40

2.67
03

2.49

2.77
02

Series break due to AIFRS

06

Staff Numbers - (FTE)

Series break due to AIFRS

Increased competition largely inAustralian Mortgages, the Institutional
Division and New Zealand Deposits
were the key drivers of the 9 basis
point contraction in Net Interest Margin
in 2006.

ANZ Shareholder Review 2006 9

An increase in FTEs of 1,280 in 2006
brought the number of new staff
employed in the business in the last
4 years to over 10,000.

our board

BOARD OF DIRECTORS 2006

Mr C B Goode, AC

Mr J McFarlane, OBE

Dr G J Clark

Mr J K Ellis

B Com (Hons), MBA, HON LLD(Melb), HON LLD (Monash)

MA, MBA, SFFIN, FSI,FHKIB, FRSA

PHD, BSC (Hons), FAP, FTSE

MA, FAICD, HON FIE AUST, FAus
IMM, FTSE, HON DR ENG (CQU)

Chairman

Chief Executive Officer

Independent
Non-Executive Director

Chief Executive Officer
since October 1997.
Mr McFarlane is also a
Director of ANZ’s largest
subsidiary, ANZ National
Bank Limited in New
Zealand.

Non-executive director
since July 1991. Mr Goode
was appointed Chairman
in August 1995 and is an
ex officio member of all
Board Committees.
Experience and expertise
Mr Goode has abackground in the financeindustry and has been aprofessional non-executive
director since 1989. Mr
Goode brings a wide rangeof skills and significant
experience of the financeindustry to his role as
Chairman of the Board.
Age 68Residence Melbourne.

Independent
Non-Executive Director

Experience and expertise
Mr McFarlane brings
broad leadership,
management and banking
skills following a 31-year
career in banking. Mr
McFarlane is a former
Group Executive Director,
Standard Chartered Plc,
Head of Citibank in the
United Kingdom andManaging Director of
Citicorp Investment
Bank Ltd.
Age 59Residence Melbourne.

Chairman of theTechnology Committee
Non-executive director
since February 2004. Dr
Clark is a member of theGovernance Committee.
Experience and expertise
Dr Clark is Principal of
Clark Capital Partners,
a US based firm thatadvises internationallyon technology and thetechnology market place.
Previously he held senior
executive positions inIBM, News Corporationand Loral Space andCommunications. He brings
to the Board international
business experienceand a distinguished careerin micro-electronics,
computing andcommunications.
Age 63, Residence Basedin New York, United Statesof America but also
resides in Sydney.

10   ANZ Shareholder Review 2006

Independent
Non-Executive Director
Non-executive director
since October 1995. Mr
Ellis is a member of thethe Audit Committee. Mr
Ellis’ term as Chairman of
the Risk Committee ended
on 30 September 2006 at
which time he assumed therole of a Risk Committee
member.
Experience and expertise
A trained engineer,
Mr Ellis brings to theBoard his analyticalskills together with hispractical understandingof operational issues,
investments andacquisitions across a rangeof sectors including natural
resources, manufacturing,biotechnology andeducation.
Age 69Residence Melbourne.

The Board is responsible to shareholders for the governance of ANZ, andoversees its operations and financial performance. It sets the strategic direction
and financial objectives, determines the appropriate risk appetite for theorganisation, and monitors operational performance. It also monitors compliancein terms of ethical standards and regulatory requirements. The Board appoints
the Chief Executive Officer and regularly reviews his performance.

Mr D M Gonski, AO

Ms M A Jackson, AC

Mr D E Meiklejohn

Mr J P Morschel

B Com, LLB, S.I.A. (Aff),
FAICD, FCPA

B Ec, MBA, HON LLD (Monash),
FAICD, FCA

B Com, Dip. Ed, FCPA,FAICD, FAIM

DipS, FAIM

Independent
Non-Executive Director

Independent
Non-Executive Director

Independent
Non-Executive Director

Chairman of theGovernance Committee

Chairman of the People
Committee

Chairman of the Audit
Committee

Non-executive director
since February 2002. Mr
Gonski is a member of the
Risk Committee.

Non-executive director
since March 1994. Ms
Jackson is a memberof the Audit Committee.

Experience and expertise
A lawyer, Mr Gonski has
a broad experience acrossbusiness, the law andinvestment banking. He
also brings to his role on
the Board an appreciation
for the community throughhis work in the arts andthe not-for-profit sector.

Experience and expertise
A Chartered Accountant,with significant financial
expertise, Ms Jacksonhas broad commercial
and industrial experience
including her involvementin transportation, mining,the media, manufacturing
and insurance. This
expertise coupled withher work in health andeducation contributeto her role on the Board.

Non-executive director
since October 2004.
Mr Meiklejohn is a memberof the GovernanceCommittee and Risk
Committee.

Age 53
Residence Sydney.

Experience and expertise
Mr Meiklejohn has a strong
background in finance andaccounting. He also brings
to the Board his experience
across a number of
directorships of major
Australian companies
spanning a range ofindustries.
Age 64
Residence Melbourne.

Independent
Non-Executive Director
Chairman of the Risk
Committee

Non-executive director
since October 2004. Mr
Morschel is a memberof the Risk Committee
and, on 1 October 2006,
became its Chairman. He
is also a member of thePeople Committee.
Experience and expertise
Mr Morschel has a strong
background in banking
and financial services,and brings the experienceof being a director ofmajor Australian andinternational companies.
Age 63
Residence Sydney.

Age 53
Residence Melbourne.
For listings of current directorships visit our website
www.anz.com>about anz>corporate governance

The Board of Directors 11

director and executive
remuneration 2006
Director Remuneration
C GoodeIndependent Non Executive Director, Chairman

Short Term		
Employee
PostBenefits Employment$$

Long Term 		
Employee Share Based
Benefits
Payments
$
$

Total
$

699,842

12,276––712,118

Independent Non Executive Director

217,796

12,276––230,072

R Deane (retired 30 June 2006)
Independent Non Executive Director

282,016

9,104

–

–

291,120

248,477

12,276––

260,753

229,742

12,276––

242,018

248,500

12,276––

260,776

249,866

12,276––262,142

Independent Non Executive Director

235,264–––

235,264

Total Non Executive Directors

2,411,503

82,760––2,494,263

Chief Executive Officer – Executive Director

4,710,617

428,700

59,376

2,066,960

7,265,653

Total of all Directors

7,122,120

511,460

59,376

2,066,960

9,759,916

1,651,856

49,72537,607996,030

2,735,218

236,593

14,663–

551,566

802,8222,243,266

58,50040,575661,1143,003,455

1,808,786

7,459

48,447584,1872,448,879

1,928,931

52,65034,830750,228

2,766,639

1,942,913

58,50020,0201,471,726

3,493,159

Chief Risk Officer

1,532,706

43,875

11,716447,5932,035,890

Total Disclosed Executives

11,345,051

285,372

193,195

5,462,444 17,286,062

G Clark

J EllisIndependent Non Executive Director

D GonskiIndependent Non Executive Director

M Jackson

Independent Non Executive Director

D Meiklejohn

Independent Non Executive Director

J MorschelJ McFarlane

Disclosed Executives1
R Edgar2

Senior Managing Director

E Funke Kupper (resigned effective 1 Feb 2006)

Group Managing Director, Asia Pacific

B Hartzer

Group Managing Director, Personal

G Hodges3

Chief Executive, ANZ National Bank Ltd (NZ)

P Marriott

Chief Financial Officer

S TargettGroup Managing Director, Institutional

P Hodgson

1 For the year ended 30 September 2006, remuneration details of the Key
Mangement Personnel (KMP) identified as executives of the Group (asrequired under AASB 124) and the five most highly remunerated executives
in the Company and the Group (as required under the Corporations Act
2001), other than the Chief Executive Officer.

2 R Edgar was the Chief Operating Officer prior to October 2005.
3 Prior to November 2005, G Hodges was the Group Managing Director
Corporate. Between 1 November 2005 and 31 December 2005, he was theChief Executive Designate (New Zealand), with his position changing to Chief
Executive, ANZ National Bank Limited, New Zealand effective 1 January 2006.

				

12   Director and Executive Remuneration

ANZ has the mostengaged workforce
of all major Australiancompanies.

our people
ANZ has long taken a very different approach to people. The
people who work for us invest a large part of their lives in ANZ.
In return, we aim to provide a workplace where values are real
and respected, and where staff engagement is at a world-classlevel. Our goal is a vibrant, energetic and high performing culture– and we’re well on the way to achieving it.
2007 Goals
Launch a new learning facility for ANZ employees.
Improve our performance on the ANZ Engagement
and Culture Survey.

ANZ received theSpecial Award
for Impact on theCommunity in the2006 Prime Minister’sAwards for Excellencein Community Business
Partnerships.

ANZ has set itself
apart among the
FT500 by enacting acommendable response
to global climate change.
Paul Dickinson
Carbon Disclosure
Project Co-ordinator

our community
Our community investment strategy focuses on addressing
the major social issues that affect the financial services
industry, in particular financial literacy and inclusion. We
also provide opportunities for our people to support causesthat matter to them.
2007 Goals
 nable 1,500 people to participate in Saver Plus and reachE
20,000 people through MoneyMinded.
Achieve 60,000 hours of staff volunteering and 15% participation
in workplace giving.

our environment
We have an obligation to operate in a way that seeks tominimise the social and environmental impacts associatedwith our business, while at the same time enabling
opportunities for positive social and economic development.
2007 Goals
 chieve our target to reduce our environmental footprintA
by a minimum of 5% by 2007.
Continue to improve supply chain reporting and expand thereach of our Sustainable Procurement Policy.

Our People, Community and the Environment 13

handy contacts
ANZ
Registered Office
Level 6
100 Queen Street
Melbourne VIC 3000
Australia
Telephone +613 9273 6141
Facsimile +613 9273 6142
Company Secretary: Tim L’Estrange
Investor Relations
Level 22
100 Queen Street
Melbourne VIC 3000
Australia
Telephone +613 9273 6466Facsimile +613 9273 4899
investor.relations@anz.com

share registery
important dates for shareholders*

Date
15 December 2006
15 December 2006

Event
Annual General Meeting-Sydney
Final Dividend Payment Date

26 April 2007
14 May 2007

Interim Results Announcement
Interim Dividend Ex-Date

18 May 2007

Interim Dividend Record Date

2 July 2007

Interim Dividend Payment Date

25 October 2007

Annual Results Announcement

8 November 2007

Final Dividend Ex-Date

14 November 2007

Final Dividend Record Date

18 December 2007

Final Dividend Payment Date

18 December 2007

Annual General Meeting-Perth*If there are any changes to these dates, the Australian Stock
Exchange will be notified accordingly.

Australia
GPO Box 2975
Melbourne VIC 3001
Australia
Telephone 1800 11 33 99 /+613 9415 4010
Facsimile +613 9473 2500
anzshareregistry@computershare.com.au
New Zealand
Private Bag 92119
Auckland 1020
New Zealand
Telephone 0800 174 007
Facsimile +649 488 8787
United Kingdom
PO Box 82
The Pavilions
Bridgwater Road
Bristol BS99 7NH
Telephone +44 870 702 0000
Facsimile +44 870 703 6101

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