Anz Group Holdings Limited · ASX:ANZ
Anz — Australia and New Zealand Banking Group — Non-Deal Roadshow (November 2003)
25 slides from Anz's roadshow presentation, Nov 6, 2003
Slide 1: 2003 Roadshow Presentation
2003 Roadshow Presentation Australia and New Zealand Banking Group Limited November 2003
Slide 2: Agenda
Agenda B» WN ANZ 2003 Result Review Page 3 NBNZ Acguisition page 9 Strategy Page is Outlook page 23 Important Notice: "This presentation is directed only at persons who are persons falling within Section 274, or are sophisticated investors falling within Section 275, of the Securities and Futures Ac
Slide 3: Another Solid Result for ANZ, up 8.3%
Another Solid Result for ANZ, up 8.3% v Sep 02 ° NPAT $2,348m T 1.1% ° EPS 148.3 cents tT 0.7% Before Significant Items ° NPAT $2,348m T 8.3% ° EPS 148.3 cents T 8.2% e EPS (Excluding goodwill) 152.4 cents T 9.2% e Dividend 95 cents T 11.8% e Net Specific Provisions $527m J (27.6% ) 3 th ae
Slide 4: Full year result driven by asset and deposit growth
Full year result driven by asset and deposit growth Full year NPAT growth increased 8.3% with growth in net income, tight expense control, and improving credit quality being the highlights. Net interest income * strong lending growth resulted in a $454m increase in net interest income, offset by a 1
Slide 5: A specialised portfolio - efficient allocation of resources to deliver results
A specialised portfolio - efficient allocation of resources to deliver results NPAT by business segment Risk Weighted Assets by business segment A specialised portfolio allows us to Other, a Other, efficiently allocate resources to : those businesses experiencing, or Corporate 42% psset with the pot
Slide 6: Specific provisions down 28% on 2002- no large single provisions
Specific provisions down 28% on 2002- no large single provisions Specific Provisions $m Significant impact from single customers Sep- Mar- Sep- Mar- Sep- Mar- Sep- Mar- Sep- Mar- Sep- 98 99 99 ee) 00 Ol o1 02 02 03 03 . Beez Net specific provisions - $m (LHS) mitt Yy International SPs (RHS) om Ge EL
Slide 7: Non-accrual loans continue to fall
Non-accrual loans continue to fall Historic Geographic Gross Non-Accrual Loans $m Gross Non-Accrual $m Loans (LHS) 1800 L7se 1000 . fo 1662 Non-Accrual Loans/ Loans & : 1543 advances (RHS) 1500 1.50% — goq 792 #1 2000 132001 1391 1 2002 2003 1.25% 1200 600 1.00% 900 0.75% 400 600 0.50% 200 300 0.25%
Slide 8: Capital targets reduced, reflecting lower risk
Capital targets reduced, reflecting lower risk Drivers of ACE ratio Net impact of FX rate movements on ACE % capital was approximately -$235 million. Earnings Dividend 1.59 (1.02) FX impact on RWA was approx -$3.2bn down due to FX rate movements, again 7.25 4 principally the US$ depreciation (US$ ac
Slide 9: NBNZ Acquisition
NBNZ Ac
Slide 10: NBNZ acquisition creates the leading bank in New Zealand
NBNZ acquisition creates the leading bank in New Zealand Purchase price equivalent to A$4.915 billion (at exchange rates on 23 October 2003) ANZ and NBNZ, when combined, will create: The leading bank in New Zealand ¢ One of New Zealand’s top three companies ¢ Market leadership in all major market se
Slide 11: NBNZ acquisition is transforming for ANZ
NBNZ acquisition is transforming for ANZ Acquisition an important step in a broader strategy. ANZ is now: ¢ The leading bank in New Zealand The leading bank in the South Pacific ¢ The leading Australian bank in Asia « Leading positions in Australia: —Institutional -Corporate -Cards -Esanda « With re
Slide 12: Key financial highlights
Key financial highlights Purchase price equivalent to A$4.915 billion (at exchange rates on 23 October 2003) Excludes a NZ$575 million dividend to be paid to Lloyds TSB prior to completion from NBNZ’s retained earnings Total funding by means of: e 2 for 11 renounceable rights issue at A$13 per share
Slide 13: Estimated operating cost synergies and integration costs
Estimated operating cost synergies and integration costs Operating Cost Synergies integration Costs Estimated at ~A$110m pa (before tax) Estimated at ~A$230m (before tax) within 3 years over 3 years Expected cost synergies represent * Key integration cost components: around 20% of NBNZ’s cost base #
Slide 14: Managing key integration risks
Managing key integration risks Consideration Mitigant « Maintain both brands and both branch networks Minimise Impact on | ¢ New Zealand centric retail business model leveraging NBNZ Customers ‘client-facing” systems for retail, rural and SME ¢ Manageable concentration issues in corporate and instit
Slide 15: NBNZ Group strong track record
NBNZ Group strong track record Strong growth in loans and advances High asset quality ~ Provisioning charge as % of loans and advances NZ$b bps 40 15 35 12 9 30 6 : | @ 20 4 T ’ ot T T 1 Dec-01 Dec-02 Jun-03 Dec-01 Dec-02 Jun-03 (LTM) % Declining cost-to-income ratio Consistent growth in NPAT “ NZ$m
Slide 16: NBNZ purchased at attractive multiple
NBNZ purchased at attractive multiple Price* / LTM cash earnings multiples 20 7 165 13.3 io 124 - 11.2 8 4 44 0 T T T 1 Australian Regional Past Domestic Major Australian ANZ Standalone ANZ / NBNZ Banks Acquisitions* Banks (excl ANZ) Price* / Net tangible assets multiples 3.54 3.0 3.0 3.04 2.9 2.5 4
Slide 17: Funding the NBNZ acquisition
Funding the NBNZ acquisition Target ACE/RWASs ratio range lowered to 4.75-5.25% The transaction is to be funded via the following sources: ® Net proceeds of A$3.570 billion from a 2 for 11 deeply discounted rights issue at $13 # A$1.370 billion in Hybrid, subordinated and wholesale funding The size
Slide 18: Strategy
Strate 18
Slide 19: ANZ has positioned itself to meet market challenges
ANZ has positioned itself to meet market challenges ANZ has developed a strong, balanced platform for sound organic growth which positions us well to meet market challenges. Our model of a portfolio of specialist businesses is distinctively different from our competitors. Its insight is that speed,
Slide 20: Monolines win, but returns more volatile — diversification reduces risk
Monolines win, but returns more volatile — diversification reduces risk Independent analysis* has found that monoline specialists create greater returns than generalists. ANZ’s response has been to create a portfolio of specialist businesses. Whilst the returns from individual business units within
Slide 21: We have rebalanced the bank's lending portfolio
We have rebalanced the bank’s lending portfolio ANZ has refocused the loan book towards lower risk retail lines of business through: 1. Corporate to retail lines of businesses «In 2003, Gross Lending Assets are split approx. 66/34% across retail and corporate lines of business (compared with an appr
Slide 22: Clear international strategy
Clear international strategy ANZ’s international focus is twofold and remains clear 1. US and Europe - REDUCE Modest capital “>> reallocation if growth Involving: * Focusing on core products and relationships * Reallocating capital to fund growth options * Returning excess capital, primarily to dome
Slide 23: Outlook
Outlook * We expect ANZ will continue to perform well in a tougher industry environment in 2004 Expected NPAT growth in 2004 for existing businesses on a stand alone, individual basis: « Growth in net profit after tax for ANZ and NBNZ on an individual/stand alone basis expected to be moderately lowe
Slide 24: General background information and contact
The material in this presentation is general background information about the Bank’s activities current at the date of the presentation. It is information given in summary form and does not purport to be complete. It is not intended to be relied upon as advice to investors or potential investors and
Slide 25: Copy of presentation available on www.anz.com
Copy of presentation available on www.anz.com
Australia and New Zealand Banking Group — Non-Deal Roadshow (November 2003) on 6ix