Global Foreign Exchange

Chris CooperGlobal Head of Foreign Exchange

Australia and New Zealand Banking Group Limited 20 July 2001

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The pre-eminent Australian FX bank

• Financial performance

• Low risk/volatility

• Leveraging our core capabilities into new growth opportunities

• Goals for Global Foreign Exchange

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The foreign exchange market

• “Globally FX volumes are falling despite earlier optimism. Daily volumes are trending ~ US$1tr per day

• US (corporate) markets are warming to the notion of currency hedging

• Portfolio investment flows are growing with investors seeking diversified holdings

• Retail FX is a growth sector

• Margins are falling and will fall further

• FX is a growth industry?

– For spot definitely no, for derivatives, eCommerce, risk advisory, retail, transition currencies definitely yes.”

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104

120

105

80

90

100

110

120

130

140

Mar-00 Sep-00 Mar-01

Operating Income

3234

40

20

25

30

35

40

45Profit After Tax

Mar-00 Sep-00 Mar-01

197

199199

190

195

200

205

210

47.5

48.6

50.0

45

46

47

48

49

50

51

52

53

The business continues to perform strongly…

Mar-00 Sep-00 Mar-01 Mar-00 Sep-00 Mar-01

FTE Cost Income

25% Growth

15% Growth

$m $m

%

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Spot Trading

Forwards Trading

Derivatives Trading

Sales

Commodities

…with earnings based on a diversified portfolio & recurring revenues...

Spot Trading

Forwards Trading

Derivatives Trading

Sales

1995 Portfolio 2001 Portfolio

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Source: Group Market Risk

Daily Value at Risk Trends

Limit US$5.2m

Avg use US$710k

Dec 99 Mar 010

1

2

3

4

5

6

Daily V

aR

…and an extremely low risk profile

Market Risk

• Core risk centres

• Risk managed under global books

• VaR levels reflect highly correlated risk

Credit Risk

• Primary world markets

• Growth for clients

• Liquidity to mitigate risk

• Use of netting

US$m

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We are the leading foreign exchange bank in Australia

League Tables

• Australia #1 FX bank of the Year (Asia Money 2001)

• Best FX Bank Australia (Greenwich)

• Top 7 Asian FX House (Asia Money)

• Japan #1 FX Bank (AUD/NZD) seven consecutive years

eCommerce

• anz.com/fx online =7th in the world (Euro money)

• Joined global portals Atriax and Currenex

• Chair bank, Atriax Bank Board

• Deepest client penetration in Australasia with user numbers topping 850

• 25% of all corporate deals online (market norm 5%)

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By leveraging our core capabilities with differentiated products and service...

Capability Differentiation

• Vanilla trading (spot & forward)

• FX & Commodity derivatives

• Commodity structuring

• Geographic sales force

• eCommerce

• Skilled work force

• Commodity capability

• Consultative Risk Mgmt

• G4 currency bridging service

X

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…we have developed additional growth initiatives...

All linked to

eTransformation

Investors

Improve ANZ product penetration to this sector

Small Business

Focusing on delivering commodity solutions to consumer manufacturers

Commodities

Focus on deeper penetration of global investors

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• Defend & grow our global franchise in core currencies across 32 countries

• Further diversify revenues through developing the commodities business

• Expand client base, especially investors

• Leverage first-mover advantage in eCommerce through:

– Global penetration of anz.com/FXOnline– Additional derivatives capability– Straight through processing– Risk and portfolio analysis– White labeling– Global Portals

…which underpin our business strategy

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Summary

• Strong performance with low volatility

• New initiatives will further diversify the revenue base

• eTransformation will have a real impact on our business

• Winning the war for talent is a critical management task

Goals• Double digit

earnings growth

• Maintain our leading position

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Copy of presentation available on

www.anz.com