HIGHLIGHTSFor Release: 25 October 2007

ANZ 2007 Profit $4,180 million
ProfitProfit after tax $4,180 million

up 13.3%

Cash* profit after tax $3,924 million

up

Cash* profit before provisions $6,114 million

up 11.5%

9.4%

Earnings per share

EPS 224.1 centsup 12.1%

Cash* EPS 210.3 cents

up

8.1%

up

8.8%

Shareholder return

Full year dividend 136 cents
Total Shareholder Return

15.6%*Cash Return on equity

19.6%

Business highlights*
Revenue and profit before provisions growth at highest level for many years
Another great performance from Personal – revenue up 12%, profit up 16%
New Zealand Businesses performing well, impacted by normalisation of credit costs
Institutional mixed, better performance expected in 2008
Credit quality strong, although as expected credit costs up significantly from unsustainably low
level in 2006
Strategic flexibility enhanced with $1 billion dividend reinvestment plan underwrite; cost to 2008
EPS approximately 0.4%

* Adjusted for non-core items (including significant items, ANZ National Bank incremental integration costs and non-core
income arising from the use of derivatives in economic hedges and fair value through profit and loss)

1

HIGHLIGHTS (continued)

For Release: 25 October 2007

ANZ 2007 Profit $4,180 million
Australia and New Zealand Banking Group Limited (ANZ) today announced a record profit after tax of$4,180 million for the year ended 30 September 2007, up 13.3%. Earnings per share were 224.1 cents,
up 12.1%.
The headline result included a gain on the Fleetpartners sale, and a number of other non-core items.
Adjusting for these, cash* profit was $3,924 million, up 9.4% and cash* EPS was up 8.1%. The full year
dividend was 136 cents, up 8.8%.
Lending growth (13%) and customer deposit growth (17%) were both strong, particularly in Institutionalin the last two months of the year. Net interest margin declined 12 basis points, however 4 basis pointsof this was due to the accounting treatment of economic hedging instruments.
Revenue growth was the highest in recent years at 9.7%* or above 10%* when adjusting for foreignexchange movements. Cost growth was 7.6%*, with the consolidation of ETrade Australia and Stadium
Australia having a disproportionate impact on costs. While credit quality still remains sound, credit costsrose by 39%, in line with our earlier guidance to the market.
ANZ Chief Executive Officer Mr Mike Smith said: “Revenue growth of 10% was a feature of ANZ’s
performance in 2007, helping deliver good growth in profit before provisions. The Personal Division was
the standout. New Zealand performed well. Strong results are flowing through from our network
business and banking partnerships in Asia. We are addressing the mixed performance from theInstitutional Division with initiatives to improve performance in 2008.
“We have committed approximately $1.5 billion to investments during 2007. Given this, we are taking
the opportunity to enhance our strategic flexibility by offering a discount of 1.5% under our Dividend
Reinvestment Plan, which is underwritten and expected to raise an additional $1 billion at a cost to 2008
EPS of approximately 0.4%.
“While I have been Chief Executive for less than a month, it is clear that ANZ has significant strengths.
These include a top quality management team and a strong culture. However we cannot afford to sitstill. My immediate priority is to re-energise the business by bringing more edge and urgency to ANZ’sperformance. In the coming months, I also want to create a stronger vision for ANZ’s future. That will
involve a focus on growth opportunities domestically and in Asia. My aim is to revitalise our momentum
in creating a significant domestic and regional financial services institution that delivers superior growthand performance for our shareholders”, Mr Smith said.
Outlook
Commenting on the 2008 outlook for ANZ, Mr Smith said: “Despite a certain degree of global uncertainty,
we expect conditions in Australia, New Zealand and Asia Pacific to remain supportive. This provides areasonable foundation for 2008. Personal should continue to do well although opportunities to sustain
the unusually high levels of growth experienced in recent years are becoming more limited. New Zealandshould have reasonable performance, and I am confident of an improvement from Institutional. The
growth we are now seeing from Asia will continue to become more material to the Group.
“ANZ has invested in its business in recent years and we are well placed to continue strong revenue
growth in the period ahead. We will continue to invest in developing our business but with a reneweddiscipline around managing the appropriate margin between revenue and expense growth to deliver
superior performance for our shareholders. The credit environment should remain benign, althoughprovision growth is expected to exceed lending growth, as 2008 will not benefit from the same level ofrecoveries as 2007”, Mr Smith said.
* Adjusted for non-core items (including significant items, ANZ National Bank incremental integration costs and non-core income arising from the use ofderivatives in economic hedges and fair value through profit and loss)

2

HIGHLIGHTS (continued)

Divisional Performance
Personal delivered another outstanding result. Profit growth was 16% on revenue growth of 12%.
Growth in profit before provisions was 17%, in line with the very strong 2006 result. Most businessesdelivered double-digit earnings growth, while Mortgages was adversely impacted by higher funding costs.
Investment and Insurance Products was up 70%, assisted by the acquisition of ETrade Australia during
the year. Consumer Finance (up 23%), and Banking Products (up 21%), were particularly strong, andtheir performance reflects the strength of our customer proposition.
Staff numbers were up 9%, and we opened 39 new branches in the year. Credit costs increased in linewith expectations at 17%, due to portfolio growth and the seasoning of our consumer finance portfolio.
Individual provisions were within $2 million of our plan for the year.
Institutional delivered net profit growth of 6%. Revenue growth was 8%, offset by cost growth of 10%,
reducing profit before provisions to 6%. Both revenue and expense growth rates were distorted by theconsolidation of Stadium Australia. While average lending asset growth was 7%, end of period growth
was 16%, reflecting the very strong growth seen in the latter part of the year due to higher customer
demand and the global market turmoil. The recent liquidity issues in global markets have softened thedownwards pressure on margins, and this should assist the business going into 2008. Another good
feature of the result was the very high growth in customer deposits, up 27%.
Strong revenue growth in Markets and Corporate Finance was offset by weaker performance from theother units, however the second half saw a significant improvement from Business Banking.
Geographically, Institutional had strong growth in profit before provisions in Australia and Asia (up 11.3%
and 13.5% respectively), however was weaker in New Zealand (down 14% in New Zealand dollars).
New Zealand Businesses profit was up 6% in New Zealand dollars, with good revenue growth of 8%.
Profit before provisions was strong at 13%, offset by a large increase in credit costs to NZD78 million,
which normalised from an unsustainably low NZD5 million in 2006. Expense growth was well contained
at 4%. Corporate and Commercial Banking, ANZ Retail, The National Bank Retail, Rural Banking, andUDC all delivered double-digit profit before provisions growth. Despite higher credit costs they are still
well below cycle average, and credit quality remains strong, with the level of net non-performing loans(0.08%) and individual provision charges (0.08%) well below that seen in Australia.
Partnerships & Private Bank delivered very strong growth, with revenue and profit both up 34%. ING
Australia (INGA) is now delivering very good momentum, with profit up 27%. Before capital investment
earnings which were up 21%, INGA’s profit was up 31%, with the business now delivering improved
returns as it moves beyond the legacy issues that had previously constrained performance.
International Partnerships almost doubled earnings over the year, assisted by a full year contribution
from Bank of Tianjin, and five months from AMMB. The outlook for Partnerships is very promising.

For media enquiries, contact:

For analyst enquiries, contact:

Paul Edwards
Head of Corporate Communications
Tel: 03-9273 6955 or 0409-655 550
Email: paul.edwards@anz.com

Stephen Higgins
Head of Investor Relations
Tel: 03-9273 4185 or 0417-379 170
Email: stephen.higgins@anz.com

3

HIGHLIGHTS (continued)

Group1Key Business Drivers

Personal

New ZealandBusinesses(NZD)
InstitutionalYear ended
Sep 07

Change2

Change2

Change2

Change2

Total assets
Deposits & other borrowings
Risk weighted assets

$m
$m
$m

392,613234,873275,018

17%
15%
14%

12%
11%
12%

31%
24%
19%

14%
12%
15%

Average interest earning assets
Net interest margin
Net interest income
Other operating income
Total operating income

$mbps
$m
$m
$m

333,361
2.19
7,302
3,765
11,06711%(12bps)5%20%10%

11%(5bps)
9%21%
12%

9%(18bps)
(2%)
23%
8%

14%
(9bps)
10%
5%
8%

FTE
Operating expenses

No.
$m34,353
4,953

7%
8%

9%
8%

6%
10%

2%
4%

$m

6,114

11%

17%

6%

13%

Individual provision charge
Collective provision charge
Total provision for credit impairment

$m
$m
$m

484
83
567

43%
20%
39%

34%
(38%)
17%

20%
11%
19%

181%
large
large

Cash profit

$m

3,924

9%

16%

6%

6%

EVA

$m

2,280

10%

16%

5%

15%

ActualActualActualProfit before provisions

31

Other Measures
Individual provision charge
as a % of average net advances%

0.174bps

0.24

0.08

0.08

Return on average assets
Return on average RWAs
Cost to income ratio
Cost to average assets

%%%%

1.08
1.55
44.8
1.36

(3bps)
0bps(80bps)(6bps)

1.00
1.69
47.7
1.55

1.07
1.31
39.3
1.02

1.06
1.34
47.6
1.51

1.

All numbers adjusted for non-core items

2.

Compared to full year ended 30 September 2006

3.

Profit before credit impairment and income tax

4