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Media Release

1-9 Victoria Street
P O Box 540, Wellington
New ZealandPhone: 64 4 463 9400
Fax: 64 4 494 4290

For Release: 31 August 2007

ANZ National performs well in first nine months
ANZ National Bank today announced a profit of $848 million for the nine months ended
30 June 2007, up 6% on the June 2006 result.
After adjusting the headline profit for non-core items1, the underlying profit before
provisions increased by 6% ($70 million) over the corresponding June 2006 period. Avery strong performance by the Retail, Rural and Corporate businesses, with profit
before provisions growth of 13%, was offset by a lower Institutional result. Theunderlying net profit after tax was impacted by a lift in provisions following
unsustainably low provisioning charges in the corresponding June 2006 period. There
have been minimal changes to the credit risk profile across the portfolio and the Bank
has seen continued benign credit conditions in 2007.

June 2007 Nine Month Performance Summary• Net profit after tax of $848 million, a 6% increase over the June 2006 period ($803 million).
• Underlying profit before provisions of $1,295 million, a 6% increase over the June 2006
period ($1,225 million). Refer Appendix for the “Underlying” calculations.
• Underlying cost-to-income ratio decreased to 43.3% compared to 43.5% in the June 2006
period.
• Net loans and advances were up NZ$8,675 million (11% for the period) on the June 2006
position. Total customer deposits were up NZ$3,155 million (8% for the period) on the June
2006 position.

Revenue growth of 5% was driven by a strong 8% growth in the Retail, Rural andCorporate businesses. This was partially offset by a lower revenue contribution from theMarkets business in 2007, reflecting an exceptionally strong performance in the first halfof 2006, and the unwind of structured finance transactions in 2007. Net interest income
growth reflected strong lending and deposit growth, with net loans and advances
increasing by $8.7 billion or 11% over June 2006, to $85.1 billion (mortgages grew by1

Non-core items are: integration costs, the results of discontinued structured finance transactions, discontinued Truck
Leasing Limited operations, the $76 million post-tax gain from the sale of FleetPartners, ineffective hedge fair value
gains/losses, the $15 million post tax receipt from Lloyds TSB Group plc relating to an adjustment to the purchase pricefor The National Bank of New Zealand Limited Group (‘Lloyds receipt’), and the impact of the change in the company tax
rate from 33% to 30% for the 2008/09 income year on deferred tax balances.

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$6.0 billion since June 2006 to $48.4 billion, an increase of 14%) and total deposits
increased by $2.9 billion or 5% over June 2006. Customer deposits grew by $3.2 billion
since June 2006 to $43.6 billion, an increase of 8%.
Headline costs were 1% lower in the period, driven by the inclusion of integration costs($49 million) and Commerce Commission settlement costs ($10 million) in the priorperiod numbers. Underlying costs of $990 million were up 5% due to annual increases insalaries, an increase in the number of customer-facing staff and investment in businessinitiatives, partly offset by control of discretionary expenditure.
Provision for credit impairment increased $51 million from negligible levels in 2006. The
individual provision charge increased $11 million, mainly reflecting an exceptionally low
charge last year due to recoveries of past provisions. The collective provision charge
increased $40 million, largely due to a provision writeback in the nine months to June
2006 following the reassessment of the retail portfolio risk profile in the December
quarter of 2005. The collective provision charge for the June 2007 period was largely
driven by lending growth, with minimal impact from changes to the risk profile acrossthe portfolio. Credit conditions remain benign.
ANZ National Bank Chief Executive Graham Hodges said the Bank had performed very
well for the nine months to June 30 2007.
“Our underlying performance is the strongest we have seen for some time,” Mr Hodges
said. “Our market share has grown in a number of businesses and is holding up wellacross the board, which again supports our decision to maintain our multiple brandstrategy, including our two leading banking brands.”“Our focus over the past year or more has been to achieve strong revenue growth so wecan continue to reinvest in our businesses and deliver for our customers. This strategy
is working.”

For media enquiries contact:

For analyst enquiries contact:

Craig Howie
Head of Corporate Communications
Tel: +64 4 463 9414 or 027 490 9424
Email: craig.howie@anz.com

Stephen Higgins
Head of Investor Relations
Tel: +61-3-9273 4185 or +61-417-379 170
Email: higgins@anz.com

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APPENDIX – KEY CALCULATIONS OF UNDERLYING RESULT
9 MTH
JUN 07$m

9 MTH
JUN 06$m

Net operating income
Headline net operating income
Adjusted for: Discontinued businessMark to market of ineffective hedges
Lloyds receipt

2,2778-2,189(1)(3)(15)

Underlying net operating income

2,285

2,170

Operating expenses
Headline operating expenses
Adjusted for: Integration costs
Commerce Commission settlement
Discontinued business

992
(2)

1,005
(49)
(10)
(1)

Underlying operating expenses

990

945

1,295

1,225

Provision for credit impairment

56

5Profit after income tax from continuing operations
Headline profit after income tax
Adjusted for: Integration costs (post tax)
Discontinued businessMark to market of hedges
Impact of change in company tax rate
Commerce Commission settlement
Lloyds receipt772
1
527-

799
33(3)
(2)
7(15)

Underlying profit after income tax

805

819

Continuing operations

Underlying profit before provisioning