Annual Report 2000

Key dates
Record Date for Final Dividend
9 November 2000
Annual General Meeting

Grow with ANZ

15 December 2000
Payment of Final Dividend
15 December 2000
Announcement of Interim Results
26 April 2001
Record Date for Interim Dividend
17 May 2001
Payment of Interim Dividend
2 July 2001

Front cover:
ANZ staff member Alexandra Haritou,
Corporate Financial Services.

The Carter family, from our ‘Grow with
ANZ’ television advertising campaign.

22000 Highlights*> Earnings per share up 15% to $1.04> Return on equity up to 18.3% (17.2%)> Annual dividend increased to 64 cents– fully franked

Profit after tax* up$m* after abnormals

2000
1,747
1,703

> Operating profit after tax up 15%
to $1,703m ($1,480m)

1500
1000
500
0

> Grindlays sold for $2.3b-500> Strong positions developedin B2C and B2B eCommerce-1000
91 92 93 94 95 96 97 98 99 00* before abnormal gain of $44m (1999 nil)3

ANZ is a performance organisation delivering for our shareholders
We aim to improve customer experience each day
People find opportunities find people
Our people have energy and passion

leadership is everyone’s responsibility
e.embrace the future

growing
respected
open
winning4

At a glance

1 of 8

Shareholders> Total shareholder return of 35.3% during year
> $941m dividends (16% increase)> Return to full franking> Electronic distribution of documents> Online and telephone voting introduced> Shareholder meetings held in Perth, Adelaide,
Brisbane, Auckland, Wellington and Christchurch

Sharemarket accumulation index
ANZ$

All Ordinaries

500
462

400

ANZ Chairman, Charles Goode,at the 1999 Annual General Meeting.

302 300

200
100
091 92 93 94 95 96 97 98 99 00

5

At a glance

2 of 8Staff> 23,134 employees> $1,758m in personnel expenses> Offered subsidised home pcs for Australianand New Zealand staff with more than 10,500
applications received> Introduced “Max”, ANZ’s Intranet site
> Share scheme introduced to enable staff to increase
shareholding from their salary at a discount> Graduate recruitment program expanded– 175 graduates recruited in Australia in 2000

Overall satisfaction levelfrom staff survey July 2000%
70

Call centre staff celebrate ANZ’s victory as thebest financial services call centre in Australia.

58
49

Databaseaverage forall companies

60
50

40
Average forcompanies
30
undergoing
major structural 20
change
10
0
1999

2000

Click here for more details
6

At a glance

3 of 8Customers> New customer segments introduced:– General Banking– Wealth Management– Small Business> Over 420,000 customers registered forInternet Banking> $200m investment in upgrading branchcomputers commenced> Personal Investor Magazine Awards:– Home Lender of the Year
Melma Hamersfeld,
Director of Metalicus Australia.

– Business Lender of the Year
– Best Business Credit Card
> Maintained leadership in Corporate Banking
customer satisfaction

7

At a glance

4 of 8Community> $2.5m in donations and community programs> Committed $750,000 to the Intensive Care
Appeal over three years> Committed $1m to support Foodbank
nationally over five years> Maintained ANZ’s dollar for dollar commitment
to match staff contributions to the ANZ Staff
Foundation> Committed $1m to the Foundation for Rural &Regional Renewal over three years
ANZ Human Resources Consultant, Sophie Williams offeredadvice and conducted training interviews as part of ANZ’spartnership with Australia’s Youth at Risk organisation.

Click here for more details
8At a glance

5 of 8Personal Financial Services
Achieving growthBusiness Outcomes> Leading mortgage origination bank in Australia
for the past two years> Approximately 27% of all credit card expenditurein Australia is on an ANZ credit card, more thanany other bank
> Home Lender of the Year and Business Lender of theYear (Personal Investor Magazine Awards–2000)> 423,000 Internet Banking customers (360,000
in Australia and 63,000 in New Zealand)> Successful alliance with E*TRADE Australia currently
generating approximately 50% of new customers> 4 million customers (3 million in Australia,
1 million in New Zealand)> 1,021 points of representation (871 in Australia,
150 in New Zealand)

45

Profit after tax
$772m

53

Staff
12,23542

Financial Outcomes> Profit $772m (1999 – $616m)> Income growth 9%

Assets$71,673m> Cost income ratio 55.2%> Asset growth 20%

Click here for more details
9At a glance

6 of 8

Corporate Financial Services
Leveraging our leadership position
ANZ is the leading corporate bankin Australia and New Zealand with
81,000 customers
Business Outcomes> Best FX Bank of the Year – INSTO
Magazine 2000

38

Profit after tax$647m> eauto launched – already one of thepremier automotive web sites in Australia> Transformed the Relationship Banking
business into a specialist industry segment> Developed innovative eProcurement
capabilities with MRO.com and corProcure> e initiatives – FX Online, eGate

20

Staff
4,689

Financial Outcomes> Profit $647m (1999 – $562m)> Income growth 6%> Cost income ratio 46.7%> Asset growth 10%

45

Assets$77,169m

Click here for more details10At a glance

7 of 8International
Selective investments
Business Outcomes> Grindlays sold for $2.3b toStandard Chartered Bank
> Entered into a joint venture with OCBC
of Singapore to create an Internet banktargeting the emerging affluent in Asia
> Investment in two new countries
in the Pacific2

Profit after tax$40m
8> Mobile banking launched in Indonesia
Financial Outcomes> Profit $40m (1999 – $62m)> Cost income ratio 65.6%> Asset growth 38%

Staff
1,961
5

> Impaired assets down

Assets$8,011m

Click here for more details11

At a glance

8 of 8

Technology
eTransforming ANZComprises
Technology, eCommerce and Payments
Business Outcomes> Majority of sites connected via a single Internet
Protocol network> Renegotiated telecommunications contracts
resulting in $25m in savings to the Group> Most employees now connected to the intranet
and email> Successfully completed Y2K and GST programs> Continued the move to standardised servers anddesktops providing all staff with the best tools at
a low cost
> Strategic alliances with Microsoft and Dell
> Established ANZ Ventures, an expert teamsupporting minority investments in eCommercecompanies including Identrus

Click here for more details
12Chairman’s message to shareholders
ANZ has again delivered on our promises
to shareholders. In the year ended 30
September 2000 profit rose 15% to$1,703m, a new record for the company.
Earnings per share grew by 15% to exceed$1.00 for the first time and the dividend
was increased by 8 cents to 64 cents per
share and was fully franked.
It is also pleasing to see this performancereflected in the share price, which rosein excess of 25% during the year and recorded all time highs.
Management and staff are to be complimented for theseachievements which were made in a rapidly changing andsometimes volatile world.
On 27 April we announced the sale of the Grindlays businessto Standard Chartered Bank. The transaction was completed on
31 July with ANZ receiving a total consideration of $2.3b including a$1.2b premium over book value. With the changes in world banking,the sale of Grindlays to Standard Chartered Bank enables ANZ toreceive value today from a buyer which specialises in emerging
markets banking. While we retain the liability for the dispute with
the National Housing Bank of India, even after provision for thisand other items, we realised over $400m net profit from the sale.
The sale of Grindlays allowed us in one move to “simplify and focus”
our international network in line with the strategy outlined in lastyears annual report. It also represents a substantial step in our
program to reposition ANZ as a more balanced organisation.
In conjunction with the announcement of the sale of Grindlays wealso announced a $1b on market share buyback to enhance ANZ’scapital management. As at 30 September this buyback wasapproximately 50% complete. Recently in October we announced
that participation in the Dividend Reinvestment Plan and Bonus
Option Plan would be capped at a maximum of 50,000 sharesfor each shareholder as a further capital management initiative.
In July we outlined further details of our strategy which focuseson the themes of specialisation, eTransformation and growth.
The establishment of individual customer businesses to focus on
general banking, wealth management and small business customers
underscores our commitment to improving the customer experience.
This strategy is discussed further in the CEO’s strategic overview andthe business commentaries.
Our focus is now shifting to the application of eCommerce to ourinternal operations and increasingly to growth. We already havesignificant momentum in eCommerce with greater penetration of
our customer base than our peers and first mover advantage inbusiness to business eCommerce. The announcement of the Asianinternet banking joint venture with Oversea Chinese Banking
Corporation of Singapore is an important building block in ourplans to leverage our eCommerce expertise in regional markets.
In terms of outlook for the 2001 year, while there is some prospectof further interest rate rises and a moderately slowing economy,
ANZ has a strong financial foundation, a clear strategy and good
momentum in key areas to continue to deliver shareholder value.

Charles Goode
Chairman13

1 of 2

Specialisation, eTransformation and growth
We have spent much time over the past three
years repositioning ANZ to reduce risk, improve
efficiency and establish a better balanced
organisation. This work is now largely complete.
In July we outlined our strategic thinking on
how to take ANZ forward in a rapidly changing
world. Our strategy is around three themes –specialisation, eTransformation and growth.

Specialisation>

Chief Executive Officer’s
strategic overview

Reconceive ANZ as a portfolio of specialist businesses
Make each of our 21 businesses a specialist in its own right>Establish three new stand alone customer businesses –General Banking, Wealth Management and Small Business>Accelerate the growth of our strong productmonoline businesses>

Move towards open architecture, selectively over time>

Manage the portfolio and brands actively from the centre

14

2 of 2eTransformation>

Become an “eBank with a human face”
Provide our customers with a multichannel, personalised
experience through seamless channel integration andweb enablement>

Create robust and flexible infrastructure by rationalisingcore systems and platforms, standardising desktops andservers and creating a single IP network across ANZ>

Build strong eCommerce capabilities through oureCommerce centre of excellence, ANZ Ventures disciplines
and by changing the way business and IT work together>

Continue aggressive cost reduction using technology
to improve productivity in payments, processing andinternal administration>

Differentiate by out-innovating and out-executing
the competition

GrowthCreate growth businesses> Build from our strong corporate franchise by creating new
businesses in corporate ePayments and eProcurement>>

Strengthen our consumer franchise through building
on our early eCommerce momentum, creating strong
core propositions and new businesses
Extend our leadership in the Pacific by replicating ourmodel in new countries>

Leverage our consumer and corporate eCommerce
and Cards capabilities by partnering to build new
businesses in Asia>

Build a small number of regional and/or global niches
which leverage our capabilities>

Be very selective about acquisitions, considering only
those which add strategically to individual businesses
or enhance capabilities and create value

Our strategy is already showing positive
momentum. The majority of our businesses arebuilding strong positions as leaders or co-leadersin their respective segments. We have establishedtargets for all of our businesses to outperform andwe are well placed to achieve these. We are
implementing a range of initiatives around thethemes of specialisation, eTransformation andgrowth in the year ahead and expect to achieve
further improvements in overall performance.
Finally, I’d like to personally congratulate andthank staff for their contribution to our great
result. We are entering 2001 with greater cohesion
for our shareholders, our customers and our staff.
I look forward to another successful year ahead.

15

Chief Financial Officer’s review

1 of 4

The following review excludes the impact of abnormals, unless stated otherwise.

Earnings and dividends per share up
Earnings per share

120>

Strong earnings and dividends per share growth
Earnings per share 103.9 cents; up 15% (1999 – 90.6 cents)

90>

Dividend per share 64 cents; up 14% (1999 – 56 cents)

64 60

>

Payout ratio 61% (1999 – 62%)30>Franking 100% interim, 100% final (1999–80% final)>

Return on equity increasing towards 20% target
The Group has a goal of achieving a return on equity of 20% for the next 2/3 years¢

Dividends per share

103.9

-0
-30
-60
-90
91 92 93 94 95 96 97 98 99 00

Higher return on equity%
18.3% 20
15>

During the year, we made progress towards achieving this goal, increasing our returnon ordinary shareholders’ equity from 17.2% to 18.3%

5>

Profit attributable to members of the company $1,703m; up 15% (1999 – $1,480m)

0>Average ordinary shareholders’ equity $8,789m (1999 – $8,237m)

10

-5
-10
-15
91 92 93 94 95 96 97 98 99 00

16

Chief Financial Officer’s review

2 of 4

Year on year profit comparison
$m
1900

>

Strong profit growth
The Group reported a strong profit increase of 15% to $1,703m

1800

>

This was a good profit result driven by increased revenues and flat expenses

1700
1703 1600>

Net interest income up $146m (4%) to $3,801m

1500

>

Non interest income up $206m (9%) to $2,583m>

Expenses flat at $3,314m>

Provisions down marginally to $502m, despite increased volume, reflecting
improved risk profile

expenses
b&d
debts
tax
non
interest
net income
1480 interest
income

1400
1300
1200
1100

,
NPAT 99,
NPAT 00

1000

Solid income growth
Non-Interest Income>

Operating income
Net interest income growth of 4% was the result of solid asset growth of 11%,
partly offset by margins decreasing from 3.05% to 2.87%

5000

>

Non-interest income (excluding abnormals) increased by 9% to $2,583m

4000

>

Fee income up 9%, reflecting increased lending fee volumes, together withincreased transaction fees

Net Interest Income $m

3801

2583

7000
6000

3000
2000
1000
0

91 92 93 94 95 96 97 98 99 00

17

Chief Financial Officer’s review

3 of 4

Cost income ratio lower
%
80
75

>

>

The $50m reduction of costs resulting from the sale of Grindlays 10 months into the year,
was partly offset by an additional $7m from irrecoverable GST and an additional $11m costs
associated with the purchase of EFTPOS New Zealand>

Implementation costs for the GST were $19m>

Restructuring provision of $361m created to cover costs involved in restructuring our current
technology, premises, and organisational infrastructure>Management has a cost income ratio target comfortably in the forties

70
65
60
55
51.7%
50
91 92 93 94 95 96 97 98 99 00

Cost income ratio below target of 53%
We made a commitment to reduce our cost income ratio to 53% – with expenses flat from last year
and with strong income growth, we have been able to reduce this ratio to 51.7% (1999 – 54.5%)

Improved asset quality in International
$m
60
50

$m
Provision for
Doubtful Debts(International)

Non-Accrual loans(International)
858

900

>

750

51

40

681

600

30

450

20

300

22

150

10

0

0
99

00

99

Asset quality
Last year we undertook to improve asset quality in our International division –there has been a material reduction in both provisions for doubtful debts andnon-accrual loans in International (excluding the impact of Grindlays)>

For the Group, non-accruals reduced by 10% to $1,391m, from $1,543m>

Specific provisions as a percentage of non-accrual loans were 49.7%>

General provision credited with $502m (1999 – $510m) using Economic Loss Provisioning(ELP), with reduction attributable to improved asset quality, partly offset by growth in loans
and advances

00

18

Chief Financial Officer’s review

4 of 4

Solid asset growth (excludes Grindlays)
International

CFS>

Balance sheet management
Our active capital management program resulted in share buybacks that returned $1,014m
in capital to shareholders>

Total assets grew 13%>

Change in asset mix to lower risk Personal Financial Services assets which now account for
50% of loans and advances (1999 – 38%)>

$5,961m raised from global capital markets during the year

$b

PFS

180
8,011

150

5,814

120
56,653

77,16990
60
59,70971,673

30
0
1999

2000

Total shareholder return
Value of $1000 invested in September 1990

Financial goals
ANZ is committed to maximising returns to shareholders. To achieve this going forward,
we have set ourselves the following financial goals for the next 2/3years:

$
6000
5000
>

Earnings per share growth above peer average (target 10+%)>Return on equity above 20%>

Cost income ratio comfortably in the forties>

Inner Tier 1of 6%>

Maintain AA category credit rating

4000
3000
2000
1000
0
91 92 93 94 95 96 97 98 99 00

19

1 of 3Customer Businesses
General Banking
Rural, regional, general consumer banking and small businesses
with annual turnover typically up to $3m> Creation of dedicated business unit with responsibility
for end to end product and service delivery> Providing control over both distribution and transaction products
creating a single responsibility for customer experience andmigration to self-service channels> Sales events up 200% per employee since January 1999
Strategies> Focus on continuing to improve productivity and thecustomer experience> Leverage information analysis capabilities for sales effectiveness> Transform and reposition the branch network
ANZ customers Joseph Scopelliti, Cindy Condon and baby Eva.

Personal portfolio

Wealth Management
Premier and Private Banking clients> Creation of dedicated business unit with responsibility
for end to end product and service delivery> Opened 11 new look Premier branches bringing the total
to 22 Premier branches in Australia and New Zealand

Accelerating growth
Personal Financial Services provides a full range offinancial services to around three million personaland small business customers in Australia andaround one million in New Zealand. It comprises
three customer businesses, three productbusinesses and Personal eCommerce:

Strategies> Offer customers choice from a menu of options – advice,products, price> Service proposition to be underpinned by an integrated productsuite covering banking and investment products and a seamless‘bricks and clicks’ approach> Extensive third party offerings forfunds management and insurance

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20

2 of 3
Small Business
Small business customers typicallywith annual turnover from around $3m> Share of small business debt increased
from 10% to 12% over the last year

> Improve productivity throughrationalisation of systems andincreased automation> Improve funding flexibility

Strategies> Creation of dedicated business unit withresponsibility for end to end productand service delivery

Cards
Credit cards, personal loans, corporate/purchasing cards and merchantprocessing of credit/debit cards> Develop integrated seamless offering
across relationship branches, callcentres and the internet for eachcustomer sub-segment> Retained and grew market leadership
position in credit card issuing, with ANZshare of total credit card spend up from
25% to 27%> Coalesce small business eCommerce
Product Businesses> Acquired EFTPOS New Zealand, theleading provider of merchant terminals
in the NZ market (40% market share)

Mortgages
Origination, funding and servicing ofboth ANZ and third party mortgages

Strategies> Continue to improve and leverage
Qantas Telstra Visa Program> Won the Personal Investor MagazineHome Lender of the Year for 1999
and 2000> Largest share of mortgage originations
and funding in Australia over the year.
Steadily grew share in New Zealand
Strategies> Continue the development of award
winning products, active databasemarketing campaigns and broadeningof distribution to maintain leadership

Infrastructure
Two key infrastructure initiatives
will be supporting the strategic
development of all the businesses
in the Personal portfolio:> Implementation of a new sales andservice platform and customer
relationship management system forfront-line staff. This will be web-based,
common across all channels and enable
a more consistent, positive andproactive experience for customers> Increased levels of ‘straight throughprocessing’ to improve responsiveness,
reduce cost and enhance the customer
experience
Funds Management & Insurance> Appointment of new experienced
management team

> Acquire new customers through crosssell to Personal base and new channels

Strategies> Leverage bank distribution strengths
and customers> Build leadership in eCommerceand other high growth merchantacquiring segments> Reposition asset management andoptimise products and features> Develop state-of-the-art operations,credit and portfolio management
capabilities> Leverage universal account and targetedmarketing to grow IFA channel

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21

3 of 3
Personal eCommerce
Personal and small business eCommerce> More than 420,000 customers now
registered on internet banking> Highest % customer take up of internet
banking of any bank in Australia> Launched myanz.com as a completely
self-tailorable home page or web site
incorporating internet banking and awide range of non-financial information> Alliances with MultiEmedia.com and
Gateway for small business enablementon the web

Mortgage market share

Strategies> Create a business that is obsessedwith satisfying our customers needs
with innovative online solutions> Establish anz.com as the leading
financial services portal in Australia
and New Zealand> Unlock new sources of value bytranslating our skills and partnerships
into new online offers to bothconsumers and the SME sector> Transfer and inculcate eCommercecapabilities in traditional businesses

Internet banking customers

Share of credit card spend%%
15% of total relationships

Sept 00

%
14

30
13.6

14

12

12.8
11.8

10

11.2

25

13

8
6.9

12

20

4

11

2

Aug 00015

10June 94

6

June 94

Aug 00

ANZ

St G

WBC

NAB

CBA

Source: Ord Minnett & Roy Morgan

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22

1 of 3Customer Businesses
Institutional Banking
Large corporate, multi-national, institutional andgovernment clients> Completed restructure of Institutional Banking into nine
industry segments> Awarded Best Bank in Australia 1999
(US Global Finance Magazine)
Strategies> Leverage industry specialisation capabilities> Increase advisory work and related corporate finance activities> Maintain focus on customer profitability, cross sell andeffective use of balance sheet

Jo Wastell, Corporate and Institutional Banking, with ANZ customer.

Corporate portfolio
Leveraging our leadership position
ANZ is the market leader in corporate banking
in Australia and New Zealand, serving some
81,000 corporate customers. It comprises threecustomer businesses, four product businesses
and Corporate eCommerce:

Corporate Banking
Mid-market corporate clients, typically with turnoverof $10-150m> Maintained leadership in Corporate Banking market shareand customer satisfaction while increasing profitability
and reducing risk
Strategies> Increase sales of new value added solutions such as private
equity, securitisation, fixed income and interest rate risk
management; investment banking products to middle
market customers> Deepen share of wallet through broader fee-based
offerings, eCommerce solutions and personal banking
packages for employees

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23

2 of 3
Asset Finance
Asset finance business focusing on
equipment and vehicle financing> Achieved significant efficiency
improvements in Esanda in Australia
and UDC in New Zealand throughbetter use of technology> Successfully launched eauto asa leading automotive web site –currently has the largest number ofparticipating dealer franchises of any
automotive web site in Australia
Strategies> Strengthen leading eCommerce position
in auto-finance> Continue unit-cost reduction in backoffice – transform operating platform> Grow into new asset and customer
classes where the back office and/or
customer base can be leveraged> Utilise extensive customer basefor the sale of non-asset related
products such as insurance

Structured Finance
Global project and structured finance

Strategies> Continued expansion of the productrange and focus on sales as the main
drivers of business performance

No.1 Arranger 1999, Asia Pacific(Project Finance International)> Expansion of the precious, semiprecious and base metals business> No.1 Arranger 1999, Asia andAustralia (Global Finance)> Increased penetration of FX Online
to major users/investors in Australia
and overseas

Product Businesses>

Strategies> Strengthen client relationships
through leveraging chosen industry
and geographic expertise

Capital Markets
Debt instrument and derivatives
origination and trading> Increase focus on structured,high margin product solutions> Partnership with Lehman Brothersfor offshore fixed income products> Establishment of securitisation
structure to reduce balance sheet
usage and risk levels> Establishment of new issues web
site for ANZ bonds issue data

Financial Markets
Foreign exchange and precious
metals trading> Best FX Bank, Australia 1999 (FX Week)> Best FX Bank of the Year
(INSTO Magazine 2000)> World No.1 FX Options AUD, 1999
(Risk Magazine)> No.1 Domestic Commercial Paper(Asiamoney July 2000)> Derivatives/Risk Management Houseof the Year (INSTO Magazine 2000)
Strategies> Introduction of Credit Derivatives
and Equity Derivatives businesses> Increase scope of securitisation
activities in Australia and New Zealand> Expand partnerships with Private
Banking and Corporate Banking

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3 of 3
Transaction Services
Incorporates trade finance, custody,
correspondent banking and cash
management services> No. 1 trade services provider
in Australasia 2000 (Brand
Wood International)> No. 1 in sub-custody in Australasia
2000 (Global Investor Magazine)> Leader in cash management andtransaction banking services. Major
deals won included Telstra 2 and
NRMA floats
Strategies> Continue to re-engineer and automate
processes to reduce cost and improve
responsiveness> Develop value added transaction
products and solutions> Embrace eCommerce in payments

Corporate eCommerce
B2B eCommerce> Independently judged to be B2B leader
in the SME/Corporate market with over
170,000 registered users

Overall satisfaction with bank
Corporate Banking
ANZ

NAB

CBA

WBC

8.5
8
7.5

> Established eProcurement market-placein conjunction with MRO.com

7> First bank to offer an online foreignexchange trading product> Continued development of ANZ eGate
as a leading multi-payment, multichannel payments platform

Score out of 10

6.5
6
1995

1996

1997 1998 1999 2000

Source: Roberts Research

Strategies> Provide turn-key online enablement
solutions with complementary partners
where financial services integration &ANZ distribution add value> Internet enable existing products
to create a corporate banking portalthat improves customer financial
decision making> Build the most innovative rangeof financial eProducts to enable
customer electronic trading

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25

1 of 3

International portfolio
Selective investments
Sale of Grindlays
As part of the previously announced strategy to reduce risk
and simplify and focus the international network, the saleof Grindlays to Standard Chartered Bank was completed
on 31 July 2000:> Price of $2.3b delivers good value for shareholders
representing 2.3 times net assets and 14.2 times earnings.
Dividend of $0.9b from retained earnings prior to sale
> Transaction enables the planned repositioning of thebusiness in a single move, quickly and without substantial
restructuring costs> Co-operation agreement established with Standard Chartered
Bank to enable continuity of service to customers in tradefinance and project finance> Freed up capital and management to focus on growth in
Asia-PacificInternational now provides financial services including
consumer finance, trade finance, structured finance and foreignexchange through ANZ’s international network in 20 countries
outside Australia and New Zealand and the money centres ofEurope and New York.

Francis Chew, Finance Manager, International

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26

2 of 3

Simplification completed in one movetransaction• Grindlays
Asia–
selective• Pacific – extendedinvestment
leading position•

Impact Grindlays Sale on risk profile
Asset in countries rated below 'Single A' $USm
10,000
9,460

8000
6000
4,835

4000
2000
0

31/3/00

30/9/00

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3 of 3
Grindlays transaction

Asia — selective investment

Pacific – extend leading position> $9.5b assets, $109m earnings
in 10 months to 31 July 2000

> Japan, Korea: trade, money centres> South Pacific well covered> Three Chinas: 4 branches> 41 branches> Simplifies network in one move

> South East Asia: Singapore,
Indonesia, Philippines, Vietnam,
Malaysia, Thailand> 20-60% share of market> Extracts immediate value at 2.3
times NAV and 14.2 times earnings

eAsia> Announcement of 50/50
ANZ/OCBC joint venture to build
web-led bank in Asian region> 10% share in Hong Konginternet broker Boom.com

Asia> Network positions in 11 countries> Investment in Panin Bank Indonesia
Strategies> Build existing positions– Re-energise network points– Support Panin to become a top
5 or 6 retail bank
> Invest in new growth

Pacific> Leading position in 8 markets> Strong track record
Strategies> Extend leadership position
to new geographies– Organic growth or acquisition– Rapid deployment of successful
management model– Target the emerging affluent
as they get online> Continue to drive operational
improvement– Partner to complement ANZ’s
strengths in eCommerce andmonoline businesses– Continue to invest in new
channels and products– Review opportunities toregionalise operations

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28

1 of 2

> Continued to develop a new, high capacity eCommerce
platform including servers, firewalls and networks> Web-enabled a large portion of ANZ’s workforce via network
upgrades and deployment of Windows NT PCs. 700 branches
connected in Australia this year. 16,000 desktops are now
connected to the intranet and email. This project continues
ANZ staff member Georgi Dickens, with Max,ANZ Staff Intranet in the background.

Technology, eCommerceand Payments> Continued to implement standardised servers and desktops,
including preparation for Windows 2000 rollout> Continued rationalisation and simplification of applications
and platforms providing significant cost savings andincreased business capability> Initiated the implementation of new global payments
technology, providing greater efficiencies and realtime capabilities> Successfully completed the Year 2000 and GST Programs

eTransforming ANZ – eBank with a human faceThis division oversees all technology andeCommerce strategy, policy and infrastructure
and manages the payments business:> Continued to develop specialist eCommerce Centre of
Excellence capability providing cost effective rapid deliveryof business solutions> Established a Customer Relationship Management (CRM)
Centre of Excellence developing a systems capability for asingle view of the customer

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2 of 2
Objectives> Established ANZ Ventures providing
expert support for making andmanaging minority equity investments
in strategic eCommerce and technology
companies> Renegotiated telecommunications
contracts resulting in $25m in savingsto the Group> Increased use of development
capability in Bangalore, India> Numerous projects under way to achievesignificant productivity savings tobusiness operations through automationand straight through processing> Developed the systems solutions for the
successful launch of many new products
including eGate and eauto.com

Provide our customers with a personalised,multi-channel experience throughseamless channel integration, webenablement and CRM technology> Provide robust, flexible and costeffective infrastructure – rationalise
core systems and platforms,
standardise desktops and servers
and create a single IP network> eCommerce capabilities – build
strong capabilities through oureCommerce Centre of Excellence,
ANZ Ventures discipline and improving
the way Business Units and IT
work together> Cost reduction – aggressively reduce
costs by using technology to improve
productivity, reduce complexity,
increase straight through processing
and automate administrative functions> Close alignment of IT and the Business
Units, from planning through to delivery> Provide low risk, high efficiency andstate-of-the-art payments capabilities

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30

Enabling our staff

1 of 2Max

pcs@home

ANZ’s staff intranet went live on
1 November 1999. Max provides staff witha powerful search tool and a platform forthe paperless office of the future.

ANZ became the first company in Australia
to implement a home-computer offer for
staff. More than 10,500 staff in Australia
and New Zealand applied for the heavily
subsidised PC deal which included
Internet access.

Max’s features include online leave forms,
a global contact list, daily news, ANZ
share price updates and business unit
home pages. Over 25,000 pages areavailable on Max which receives over
3 million hits per month.

The package is designed to help staff
and their families become familiar
with PC and Internet technology, andunderlines the strategic importance
ANZ places on eCommerce.

pcs@home has proved to be one of themost popular staff initiatives in ANZ’s
history. Delivery started in September
and continued throughout October.

Shares Scheme
ANZ has launched a Share Save Scheme
where staff can buy ANZ shares at a
5 per cent discount to the market pricefrom their salary.

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31

Enabling our staff

2 of 2

Staff Survey
More than 14,500 staff responded to the2000 Staff Survey. Overall, staff
satisfaction with ANZ increased from theprevious year by 9 per cent to 58 per cent.
Our survey provider says this is one of thebiggest improvements ever achieved in asingle year by a company of ANZ’s sizeand complexity.
98 per cent of staff indicated that giving
customers a high standard of service wasimportant to them, while 77 per cent said
they had the opportunity to show initiativein their jobs.

Pip Blackwell from St. Heliers branch in
Auckland, New Zealand, is one of the
10,500 staff who received a heavily
subsidised PC at home.

Survey action
%
50
42

27

Staff believe
40
Management
will act on
issues identified
30
in this survey
20
10
0

1999

2000

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32

1 of 2ANZ Staff Foundation> The ANZ Staff Foundation is a charitable trust that is fundedby contributions made by ANZ and its staff. Staff participationin community work is coordinated through the Foundation> The ANZ Staff Foundation donated over $100,000 to various
groups including:– Care Ring (Vic)– Eagles RAPS (NSW)– Noosa Youth Service
Association (Qld)– Palmwoods Riding forthe Disabled (Qld)– Rivskills (SA)– Speech and Hearing Centre (WA)– Starlight Children’s Foundation (National)
Wet ‘n’ Wise program about water safety.

– St John’s House Crisis Accommodation andSupport Centre (Qld)– Wimmera Community Care (Vic)

Community involvement
ANZ is strongly involved with the communities
in which it operates through the ANZ Staff
Foundation, direct donations and sponsorships.

Foodbank and ANZ staff participation
ANZ has committed $1m to support Foodbank nationallyat $200,000 a year for 5 years. ANZ gives Foodbank theopportunity to help welfare agencies around Australia meetthe most basic need of people – food.
The partnership between ANZ and Foodbank gives ANZ staff
the opportunity to make a real difference through volunteer
activities for those who need it most. A number of activities
have been conducted with Foodbank:> ‘Paint a fresh face on Foodbank’ –about 70 ANZ staff volunteers made a big
difference on the building’s “new” look

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33

2 of 2
Foodbank – cont.
> volunteer team work from a numberof business units to pack goods> SPC ‘Operation Share-A-Can’ – over 50
staff and partners volunteered their timeby working on the production line which
resulted in $750,000 worth of products
which were donated to Foodbank andthe Victorian Relief Committee
Foundation for Rural
and Regional Renewal
ANZ has donated $1m over 3 years
to the foundation to fund projects to
support and reinvigorate rural andregional Australia.

ANZ Staff Foundation supported involvementof Queensland community groups at a recent
Brisbane Broncos Game Day.

Wet‘n’Wise
Wet‘n’Wise, a major partnership with theRoyal Lifesaving Society in Australia, is anational program about water safety
and teaches young people how to saveothers. Wet‘n’Wise will see thedevelopment of resource kits forschools and a special website on watersafety, as well as building on existingwater safety education programs.

Donation of computers
ANZ has donated 180 Pentium
computers to 30 Victorian schools
in rural and regional areas and 130
Pentium computers to 25 NSW schools
in disadvantaged areas.

Intensive Care Appeal
ANZ is helping save 2000 lives eachyear through its support of the‘Intensive Care Appeal’, run by theAustralian and New Zealand Intensive
Care Foundation. The appeal aims toraise $5m over 3 years. ANZ has alreadycontributed $250,000 to the appeal thisyear and has committed the sameamount in 2001 and 2002.

ANZ is currently providing rent freeaccommodation to Philanthrophy
Australia on Level 10/530 Collins Street,
Melbourne, at an annual cost to theGroup of $65,000 for 3 years. ANZ also
supports their seminars and luncheonsin Martin Place, Sydney.

Youth at Risk Australia
ANZ has donated $100,000 to
conduct a series of educational/training
programs to skill young people in job
search and job retention tools – theprogram deals with issues such as
positive attitude, goal setting,presentation and communication skills,
interview techniques (ANZ Human
Resources staff ran these sessions)and relationship building.

Over 100 computers have also been
donated to Rotary to pass on tocharities and disadvantaged people.
Philanthropy Australia

Political Donations
In Australia in the year to September
2000, ANZ donated $80,000 to the
Liberal Party, $55,000 to the Australian
Labor Party and $10,000 to the
National Party.

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34

Risk Management

1 of 3The identification and management of risk is an essential part of banking.
Risk management policies are approved by the Board with the Board Risk
Management Committee supervising implementation and adherence to policy.

Risk

Credit Risk
The potential financial loss
resulting from the failure of acustomer to honour fully theterms of a loan or contract

Credit Risk

> Policy controls aimed at developing
and maintaining a well diversified credit
portfolio are supervised by the Board Risk
Management Committee> Major lending decisions require sign-off
from an independent credit area as well as
the business area. The largest transactions
require approval by the Credit and Trading
Risk Committee or Risk Management
Committee> Rebalancing portfolio towards lower risk
consumer credit> Capability developed to reduce
concentration risk through the credit
derivatives market> Main area of concern was cross border
lending. The sale of the Grindlays
network has reduced our exposures
to high risk countries

35

Risk Management

Risk

2 of 3Credit Risk

Asian exposure
US$b
15

Market Risk
Risk to earnings arising frommovements in interest andexchange rates and bond, equity
and commodity prices> The Group Asset and Liability Committee
oversees the Group’s balance sheet risk –trading risk is monitored by the Credit andTrading Risk Committee> Main area of concern was balance sheet
exposures to emerging markets. The saleof Grindlays has reduced our exposuresin this area

11.5
10
6.1

5.6

6

99

00

5

0
97

98

36

Risk Management

Risk

3 of 3Credit Risk

Market risk (Value at risk – average)
A$m

Operating Risk
Operating risk arises fromthe potential breakdown of
day-to-day processes

Prime responsibility of Business Units
is to ensure compliance with policies,
regulations and laws

23

20
15

> The Operating Risk Executive Committee is
responsible for development and oversightof operating risk policies> ANZ has spent significant time and effort
during the past year to develop world classmeasurement and management capabilities
in operational risk management

25

23

10
5

4

5
0

97

98

99

00

> Key focus areas include fraud prevention,
payments risk management, andeCommerce security

37

ANZ Directors online at the Board Meeting.

Corporate GovernanceGood corporate governance is essential for ANZ to carry out its business activities
and meet the objectives of shareholders, regulators, customers and employees.
Good Corporate Governance
Board of Directors to> Chart direction of Group> Monitor management’s performance> Ensure regulatory and ethical standards
are met> Approve delegations and discretions
to management> Appoint Chief Executive Officer
Experienced Balanced Board> Seven non-executive Directors andChief Executive Officer> Wide range of business backgrounds –see next page for Directors’ details

Effective Committee Structure> Directors appointed after 1993
Good Corporate Governancewill retire after 15 years service> Four main committees cover:
Board of Directors to – Audit– Risk> Directors resign and are proposed– Strategy – Human Resources
for re-election by shareholders> Chartevery
direction of Group> Regular meetings
three years> Monitor management’s performance> Chaired by non-executive Directors
Ethical Standards> Ensure regulatory and ethical standards are met> Committee charters regularly reviewed> Non-executives are ‘independent’> Approve –delegations and discretions to management> Details in Concise Financial Report
not substantial customers/suppliers>
Appoint
Chief
Executive
Officernor past executives
Active Participation> Non-executive Chairman Experienced Balanced
Board
> 10
board meetings during the year
> Directors must hold at least
2,000> Sevennon-executive> Directors
and Chief
Executive Officer
Annual strategy
reviewshares (page 31) – restrictions on> Wide range of businessbackgrounds
see next pagefor
> Openaccess to–information
includingshare trading
independent expert advice
Directors’ details> Code of Conduct covers conflict ofRegularand visits> Directors appointed>after
1993meetings
will retirewith
afterstaff
15 years
serviceinterest proceduresto branches> Directors resign and are proposed for re-election by
38
shareholders every three years

Board of Directors

1 of 4Mr C B GoodeB Com (Hons) (Melb), MBA (Columbia), Hon LLD (Melb)
Chairman, Company Director.
Director since July 1991. Appointed Chairman August 1995.
Chairman of Woodside Petroleum Ltd. Director of CSR Limited, Singapore Airlines Limited,
Air New Zealand Limited and other companies.
Lives in Melbourne. Age 62.

Mr J McFarlane obe
MA, MBA, FAIBF, FAIM, FHKIB, FRSA, FFTP (Hon), MSI
Chief Executive Officer.
Appointed Group Managing Director and Chief Executive Officer in October 1997. President of
the Australasian Institute of Banking and Finance, a Council Member of the Australian Bankers’
Association, Director of the Business Council of Australia, Australian Graduate School ofManagement 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).
Lives in Melbourne. Age 53.

39

Board of Directors

2 of 4Dr B W Scott ao
B Ec, MBA, DBA
Company Director.
Director since August 1985. Chairman of Management Frontiers Pty Ltd and The Foundation
for Development Co-operation Ltd. Director of Air Liquide Australia Ltd and the James N. Kirby
Foundation Ltd. Australian member of the Board of Governors of the Asian Institute of Management.
Former Chairman of the Australian Government’s Trade Development Council (1984–1990).
Former Federal President, Institute of Directors in Australia (1982–1986).
Lives in Sydney. Age 65.

Mr J K Ellis
MA (Oxon), FAICD, Hon FIE Aust, FAusIMM, FTSE
Company Director.
Director since October 1995. Chairman of Sandvik Australia Pty Ltd, Australia-Japan Foundation,
Australian Minerals & Energy Environment Foundation and Black Range Minerals Limited.
Director of Aurora Gold Limited, GroPep Limited and Pacifica Group Limited. Chancellor ofMonash University. Council Member, Victorian College of the Arts. Former Chairman, BHP Limited,
International Copper Association Ltd and Board Member of the Museum of Contemporary Art.
Lives in Melbourne. Age 63.

40

Board of Directors

3 of 4

Ms M A Jackson
B Econ, MBA, FCA
Company Director.
Director since March 1994. Chairman of Transport Accident Commission (Victoria), Qantas Airways
Limited and Methodist Ladies College. Director of The Brain Imaging Research Institute, Billabong
International Limited and Equest Telecom Pty Ltd. Board Member of Howard Florey Institute ofPhysiology and Medicine.
Lives in Melbourne. Age 47.

Dr R S Deane
PhD, B Com (Hons), FCA, FCIM, FNZIM
Company Director.
Director since September 1994. Chairman of Telecom Corporation of New Zealand Limited,
Fletcher Challenge Limited, ANZ Banking Group (New Zealand) Limited and Te Papa Tongarewa(The Museum of New Zealand). Director of Woolworths Limited, TransAlta Corporation, eVentures
New Zealand Limited, The Centre for Independent Studies Ltd and Institute of Policy Studies.
Formerly Chief Executive and Managing Director Telecom Corporation of New Zealand Limited,
Chief Executive Electricity Corporation of New Zealand Ltd, Chairman State Services Commission,
Alternate Executive Director International Monetary Fund and Deputy Governor Reserve Bankof New Zealand.
Lives in Wellington, New Zealand. Age 59.

41

Board of Directors

4 of 4Mr G K Toomey
B Com, FCPA, FCA, FCIS
Company Director.
Director since March 1998. Appointment as Chief Executive Officer of Air New Zealand Groupannounced. Formerly Deputy Chief Executive Officer and Executive Director of Qantas Airways
Limited (December 1993 to September 2000). Formerly Non-Executive Director of Air Pacific Limited(May 1998 to September 2000).
Lives in Sydney. Age 45.

Mr J C Dahlsen
LLB, MBA (Melb)
Solicitor and Company Director.
Director since May 1985. Former Consultant and Partner of the legal firm Corrs Chambers
Westgarth. Chairman of Woolworths Limited. Director of Southern Cross Broadcasting(Australia) Limited, Mining Project Investors Pty Ltd, The Smith Family and J.C. Dahlsen Pty Ltd
Group. Former Chairman of the The Herald and Weekly Times Ltd, Melbourne Business
School Limited and Deputy Chairman Myer Emporium Ltd.
Lives in Melbourne. Age 65.

42

Group Executives

David Boyles

John McFarlanePeter Marriott

Chief Information Officer

Chief Executive Officer

Chief Financial Officer

Peter Hawkins

Roger Davis

Elmer Funke Kupper

Personal Financial Services

Corporate Financial Services

Strategy & International

Bruce Brook

Greg Camm

Satyendra Chelvendra

Craig Coleman

Larry Crawford

Deputy Chief Financial Officer

Mortgages

On Sabbatical leave

Wealth Management

General Banking

Bob Edgar

Kathryn Fagg

Mick Green

Brian Hartzer

Corporate andInstitutional Banking

Global Transaction Services

Retail Risk Management

Cards

Graham Hodges

Murray Horn

Mark Lawrence

James MacKenziePeter McMahon

Small Business

New Zealand

Risk Management

Funds Management

Asset Finance

Grahame Miller

Elizabeth Proust

Rick Sawers

Alison Watkins

Investment Banking

Corporate Affairs andHuman ResourcesGroup Treasurer

Personal eCommerce

1
43

2000 Concise Financial Report
The 2000 Concise Financial Report has been derived from the Group’s 2000
Financial Report. This Concise Financial Report cannot be expected to provide as
full an understanding of the Group’s financial performance, financial position andfinancing and investing activities as the Group’s 2000 Financial Report. The Chief
Financial Officer’s Review on pages 8 to 9 provides a discussion and analysis of
the financial statements.
2000 Financial Report
A copy of the Group’s 2000 Financial Report, including the independent Auditors’
Report, is available to all shareholders, and will be sent to shareholders withoutcharge upon request. The Financial Report can be requested by telephone(Australia 1800 11 33 99, overseas 61 3 9615 5989) and by internet atinvestor.relations@anz.com or viewed directly on the internet at www.anz.com

Open Concise Financial Report44

Shareholder information
Dividends
The final dividend of 35 cents per sharewill be paid on 15 December 2000, 100%
franked. Dividends may be paid directly toa bank account in Australia, New Zealandor the United Kingdom. Shareholders whowant their dividends paid this way should
advise ANZ Share Registry in writing.
Dividend Reinvestment and Bonus Option
plans are available to shareholders.

The plans are detailed in a booklet called‘Shareholder Alternatives’, copies ofwhich are available from ANZ Share
Registry at the addresses shown below.
Stock Exchange Listing
The Group’s ordinary shares are listed on
the Australian Stock Exchange and the
New Zealand Stock Exchange. The Capital
Securities offered in 1993 and thePreference Shares issued in 1998 arelisted on the New York Stock Exchange.

1 of 2

American Depositary Receipts
The Bank of New York sponsors an
American Depositary Receipt (ADR)
program in the United States of Americaand 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 mattersrelating to their ADR holdings.

ANZ

ANZ Share Registry

Registered Office
Level 6, 100 Queen Street
Melbourne, Victoria 3000 Australia
Tel: (61 3) 9273 6141
Fax: (61 3) 9273 6142
Secretary: J Slatter

Australia
New Zealand
Level 12, 565 Bourke Street
Private Bag 92119
Melbourne, Victoria 3000 Australia
AucklandAustralia: 1800 11 33 99
Tel: 0800 174 007
Fax: (61 3) 9611 5710
Fax: (64 9) 522 0058
UK: (44 870) 702 0000
anzshareregistry@computershare.com.au

45

Shareholder information

2 of 2Credit Ratings (November 1999)
Short Term
Moody’s Investors Service
P-1
Standard & Poor’s Rating Group
A1+
Long Term Debt
Moody’s Investors Service
Aa3 (outlook stable)
Standard & Poor’s Rating GroupAA- (outlook stable)
2000 Financial Report
A copy of the Group’s 2000 Financial
Report, including the independent
Auditors’ Report, is available to allshareholders, and will be sent toshareholders without charge uponrequest. The Financial Report canbe requested by telephone(Australia 1800 11 33 99,
Overseas 61 3 9615 5989), by email atinvestor.relations@anz.com or viewed
directly on the internet at www.anz.com

Australian Telephone Numbers
Customer Banking Enquiries 13 13 14
anz.com 13 33 50
Esanda Finance 13 23 73
ANZ Funds Management 1800 021 052
Credit Card Enquiries 13 22 73
Lost or Stolen Cards 1800 033 844
Home Buyers Line 1800 035 500

Internet
ANZ product and company information
is available on www.anz.com

46