Corporate Financial Services — Leveraging our leadership position

Corporate Financial Services - Leveraging our leadership position for specialisation and growth Roger Davis Head of Corporate Financial Services 18 July 2000

ANZ Corporate: leveraging our leadership position • Portfolio of Specialist Product and Customer Businesses with strong to dominant market positions – Strong performance – Customer centricity – Product excellence • Significant Growth Opportunities: – Capital markets – Business e. Commerce – Leveraging the middle-market franchise

CFS: a major contributor to the bank’s earnings $311 m $738 m % Institutional Corporate Transaction Services Asset Finance Capital Markets Financial Markets Structured Finance Customer Businesses

CFS: financial performance $m % Profit Income % Net Interest Margin (LHS) Non Interest Income (RHS) % Costs % $m Provisioning Cost to Income (LHS) Cost to Assets (RHS) Actual Credit Costs Economic Credit Co

CFS: a leader in Corporate Banking Share of Significant Relationships % with Large Corporates #1 Best Bank in Australia US Global Finance Magazine 1999 #1 Arranger - Asia Pacific Project Finance International 1999 #1 Domestic Commercial Paper Asia Money 1999 #1 Arranger/Co-Arranger - Greater Asia Capital Data Loan 1999 #1 Interest Risk Management BRW/KPMG Poll 1998 #1 FX House All Round Excellence Asia Money 1999 #1 AUD/USD Currency Options Bank Risk Magazine 1999 50 40 30 20 10 0 ANZ WBC NAB CBA Source: 1999 Greenwich Associates Share of Primary Relationships with Middle-Market Companies 30% 20% 10% 0% ANZ NAB WBC CBA Source: 1999 Roberts Research

CFS: a balanced portfolio of service and asset businesses RAROC Higher Glob al FX Globa l Trans GC M Fin. Products GSF Asset Financ e Institution al Corpora te Lower Economic Capital

A customer focus and product centric business 6 Product Businesses Financial Markets Capital Markets Structured Finance Global Transactio n Services 3 Customer Segments Institution Corporate al Esanda* Overall Satisfaction with Bank ANZ NAB CBA WBC Business e. Commerc e Asset Finance Source: Corporate Banking Roberts Research Group

Customer centricity: Institutional Banking Share of Corporate Profit Customer EVA Deciles Mar-00 21% Market Penetration - Large Corporates % 50 40 30 20 10 0 Strategies • Leverage industry specialisation • Leverage strong market position to become an adviser ANZ NAB CBA Source: Greenwich Associates WBC • Maintain focus on customer profitability and effective use of balance sheet • Build e-Commerce capability

Customer centricity: Corporate Banking Share of Corporate Profit Customer EVA Deciles* 18% Market Penetration - Middle Market Strategies • Deepen share of wallet • Build broader fee-based business - ie “Wall Street to Main Street” selling • Build e-Commerce solutions • Cross sell retail products

Customer centricity: Asset Finance Share of Corporate Profit 14% % share (est. ) Source: KPMG, Financial Reports, Roy Morgan, Esanda $b (est. ) Strategy New Business Writings market share writings Motor Vehicle Deal Volumes Australia Motor. Comm Total Other Total Cars Vehicles Motor Market Vehicles Source: ABS, AFJ, Esanda • Improve sustainability of core franchise • Radically transform the business • Accelerate growth program

CFS: market leader in customer satisfaction Satisfaction with Relationship Manager Tailoring solutions to our clients' business needs ANZ NAB CBA WBC ANZ CBA NAB WBC 6 Coordinating specialist resources to service our clients’ business 6. 5 7 7. 5 8 8. 5 Satisfying our international trade specialist clients ANZ CBA NAB WBC 6 6. 5 7 7. 5 8 8. 5 6 Source: Roberts Research Group - 1999 Customer Satisfaction Research 6. 5 7 7. 5 8 8. 5

A focused customer and product centric business 6 Product Businesses Financial Markets Capital Markets Structured Finance Global Transactio n Services 3 Customer Segments Institution Corporate al Esanda* Overall Satisfaction with Bank ANZ NAB CBA WBC Business e. Commerc e Asset Finance Source: Corporate Banking Roberts Research Group

Product centricity: Global Transaction Services Share of Corporate Profit Customer Perception - Global Trade Services % 70 60 50 40 30 20 10 0 Australasia Region, January 2000 ANZ NAB WBC CBA Citibank HSBC Source : Brendan Wood International League Tables No. 1 Trade Services provider in Australasia 2000 (BWI) No. 1 in sub-Custody in Australasia 2000 (GI) Leader in major transaction banking services Leader in AUD/NZD Correspondent Banking Strategy • Continue to re-engineer the cost base • Increase % of STP • Replace inefficient processing systems • Insource where we have scale and sustainable competitive advantages

Product centricity: Asset Finance Share of Corporate Profit 14% % share (est. ) Source: KPMG, Financial Reports, Roy Morgan, Esanda $b (est. ) Strategy New Business Writings market share writings Motor Vehicle Deal Volumes Australia Motor. Comm Total Other Total Cars Vehicles Motor Market Vehicles Source: ABS, AFJ, Esanda • Improve sustainability of core franc • Radically transform the business • Accelerate growth program

Product centricity: Global Structured Finance Share of Corporate Profit 16% Key Activities • • • Industrial Transportation Project Finance Corporate Finance Export Credit Leasing and Tax Initiatives League Tables • Further strengthen client relationships • Continue to maintain a diversified portfolio across sectors and geography with strong ECA support • Increase focus on structured, high margin solutions • Expand corporate finance and ECA activity in Asia No 1 Arranger 1999, Asia Pacific No 1 Arranger 1999, Asia and Australia No 1 Arranger, South Asia 1997 to Date Indian Loan House of the year, 1999 No 1 Arranger, Export Credit Business, Australia, 1999 (EFIC) No Project Finance Intl, Global Finance, Capital Data • Exploit the cooperative agreement Source: 1 Advisor Petrochemicals (PFBL Loanware, IFR Asia, EFIC

Product centricity: Financial Markets Share of Corporate Profit $m FX Cumulative Trading Revenue 14% Initiatives League Tables Best FX Bank, Australia 1999 Top 10 World FX Bank 1999 Best FX Bank of the Year World No 1 FX Options AUD, 1999 Best of Breed Treasury Banker Swaps and Options (Asiamoney 2000) • • • Continue to focus on sales Continued expansion of product range Continue to develop Global capability Centralisation of global infrastructure Increased penetration of FX Online in Australia and overseas

Product centricity: Capital Markets Share of Corporate Profit IR Derivative Cumulative Trading Rev 5% Cumulative Daily Revenue $m League Tables No 1 Domestic Commercial Paper Derivatives/Risk Management House of the Year No 2 Lead Manager, Corporate Bonds No 3 Best Lead Manager, Securitisation, No 3 Australia/New Zealand MTNS Initiatives • Credit Derivatives and Equity Derivatives • Securitisation • Development of new channels into Middle Market and Retail • Secondary market offshore • Partnership with Lehman Brothers

ANZ Corporate: leveraging our leadership position • Portfolio of strong Product and Customer Businesses with strong to dominant market positions – – Customer centricity – • Strong performance Product excellence Growth Opportunities: – Capital markets – Business e-Commerce – Leveraging the middle-market franchise

Growth initiatives Goal: to double profit from 1999 to 2004 • On track after 12 months • No silver bullets but rather a continued reliance on consistent double-digit growth initiatives across CFS • Three key areas of activity are worth highlighting: – Capital markets – B 2 B – Middle market:

Growth: credit derivatives Key Points • The Securities Trading Business will use credit derivatives to achieve the following CFS objectives: – to enhance diversification of credit portfolios – to trade forward expectations or inconsistencies of creditrisk pricing, and – to allow new sources of investment capital to be committed to credit risk Australian Credit Derivatives Market

Growth: equity derivatives Australian Exchange $b Traded Options Market Key Points • Increasing penetration • Growth is expected in innovative equity product • ANZ Capital Markets has a strong and highly profitable track record • ANZ captured 6% market share with its first series of issues Australian Warrant Market $b

Growth: private equity funding Key points • Equity investment capability of A$75 m. • Strict investment criteria • Not well serviced by existing players • Leverage ANZ market position • Potential revenue of around $2530 m over 3 years Australian Private Equity Funds Under Management $m

Growth: increase product penetration in middle-market Estimated $80+ million revenue target over three years Source: FPRG, CPA, Roberts Research

Capital Markets deals for the middlemarket

Middle market product penetration Status • Steady increase in revenues from selling FX products and Capital Markets products to middle-market customers: Product Penetration in Middle Market $m – Revenue from Capital Markets products in 1 H 00 grew 14. 5% versus 1 H 99 – Revenue from FX products in 1 H 00 grew 28. 6% versus 1 H 99 FX Products Cap Mkts Products

e-Commerce momentum B 2 B

Growth: business e-Commerce Australian Online Total Revenue Estimates (A$b) Total Online Revenues (A$b) Business-tobusiness (B 2 B) Business-toconsumer (B 2 C) B 2 B Portal (e. Procureme nt) e. Products (e. Gate, Identrus) Corporate Banking Portal (FXOnline)

Growth: FX online Registered Users Key Points • Automated real time dealing • JV with Reuters • Leverage ANZ dominant FX position • First mover advantage • 35% share of the FX online market Transaction Volume

Growth: e. Gate Key Points • ANZ e. Gate is a secure internet payment gateway • $500 m market opportunity. • Operational March 2000 • e. Gate Version 2 soft release September 2000 (multi currency) • Future versions will include escrow and e. Cheques e. Gate Customers Actual Target

Growth: e. Procurement Key Points • Internet marketplace • Added value through integration of financial services • Leveraging cor. Procure initiative • Currently in beta test with 10 -20 clients • JV with MR & O • Leverage customer base • Collaborative approach Business System Integration • Inventory • Purchasing • Accounting • Human Resources Desktop Requisition Workflow Approval Routing Supplier Marketplace Maintenance, Repair, and Operating Supplies and Services Browse Suppliers’ catalogues and perform transactions in real time Distributed Buyers

Growth: eauto. com. au

Summary: leveraging our corporate leadership position CFS - A Growth Business Leverage our strong market position • Goal: To double Corporate Financial Services’ profit by 2004 • Our growth plans will be predicated on a range of key initiatives from across the business • Crucial to these efforts will be our success in • – building share in the Middle Market – expanding our Capital Markets initiatives – • building a B 2 B platform These initiatives are expected to generate $300 m in revenue over the next 3 years We have strong to leadership positions in: – – – – Middle-market Large corporates Financial markets Capital markets Structured finance Trade banking Asset financing Nurture e-commerce franchise • • Fully exploit: – Powerful ANZ brand integrity – Large and attractive customer base Transition e-commerce initiatives into vibrant and viable businesses: – – – ANZ e. Gate ANZ e. Procurement (eg MRO. com, cor. Procure) ANZ B 2 B Portal