Slide 1: fea == = ==
fea == = == = — st FF mr—————C. SS 2 Se Re — oe SoS
Slide 2: Where we are now
Where we are now e NZ banking market fundamentally attractive despite cyclical economic slowdown e Integration program successfully completed and we have defended the franchise well e Focus has shifted from defending to growing e Almost 3 years on we are very pleased with the National Bank acquisiti
Slide 3: The NZ banking market is fundamentally attractive...
The NZ banking market is fundamentally attractive... Return on Assets higher in New Zealand than Aust.“ Attractive returns on 1.5% assets and equity driven by 1.3% business mix i.e. weighted 1.1% to Consumer, SME & 0.9% Corporate 0.7% Low credit losses 0.5% +t ; 1 , . : Fyoi FYO2. FYO3) =~FYO4~— sFY
Slide 4: ...despite some cyclical challenges
. despite some cyclical challenges System credit growth forecast . to soften from historic highs ¢ GDP forecast to slow in % 9 FY06 & FYO7 before 24 Forecasts returning to above average ° OECD growth in FY09 e System credit growth expected to slow to between 8% to 11% Total = = = Housing = » » » Bus
Slide 5: Executing ANZN strategy: Phase I - DEFEND
Executing ANZN strategy: Phase I - DEFEND Phase I — Defend Phase II - Grow 2004 - 2005 ~ 2006 -« Integrate businesses ° Defend customer base e Build financial performance
Slide 6: Integration strategy has been successful...
Integration strategy has been successful... ANZN growing customers {Main Bank Net Customer Acquisition rolling four quarters) ue. 20,000 4 Customer base maintained and now growing 10,000 4 0 T Proved customer 10,008 4.03 Jun-04 Yec-04 Jun-05 Dec-05 Jun-06 satisfaction in ANZ; aM maintained in Nation
Slide 7: ...but we have unfinished business
..Dut we have unfinished business Revenue performance has fallen short of group targets* . . 5%-7% xX Headline costs higher than anticipated X No market share gains in last two years Revenue Growth Expense Growth V4 During integration m1HO5 m1H06 Group targets revenue and profit Share of sector Reve
Slide 8: Executing ANZN strategy: Phase II - GROW
Executing ANZN strategy: Phase II - GROW Phase II — Grow Phase 1 - Defend 2004 - 2005 2006 e Strong platform for growth- : * Distinctive business. structure ¢ Clear market share growth strategies e Portfolio of brands enhance growth. options e Leverage scale ¢ Step-up financial performance al it NE
Slide 9: Strategies are in place to step-up financial performance
Strategies are in place to step-up financial performance Focus on opening “jaws” whilst still investing* Growth Drivers 1. Distinctive Business Structure 2. Building market positions and share 3. Portfolio of brands enhance growth options Revenue Growth Expense Growth 4. Leverage scale t@ 1HO5 @ 1HO
Slide 10: 1. Business is structured to deliver growth and efficiency
1. Business is structured to deliver growth and efficiency ANZ National — ‘one kitchen, two dining rooms’ ANZ NBNZ Rural Corp. & Private upc Institutional Retail Retail Charlie Comm. Bank Malcolm Nigel Wayne Craig Graham Jeff Catherine Tilbrook Williams Besant Sims Greenslade; McDowell see a a ane A
Slide 11: 2. Shifting to growth
2. Shifting to growth ¢ Growing where we are underweight e Consumer Finance e Private Banking e Leverage off successful Australian businesses and models e Focus where the growth is e Increased investment and focus on Auckland ¢ National Bank only major bank gaining share ¢ Continued focus on tertiar
Slide 12: 2. Maximising the biggest opportunity in NZ
2. Maximising the biggest opportunity in NZ Opportunity to increase Share of Wallet (“SOW”) in both brands* e Increase customer cross sell e Increased collaboration across businesses and brands ¢ Investing in customer analytics ‘ ANZ NBNZ , e Direct Banking strategy: m SOW with ANZ/National i SOW el
Slide 13: 3. Our portfolio of brands enhance growth options
3. Our portfolio of brands enhance growth options e We remain committed to a ‘two brand’ strategy * increases natural share * greater strategic options * provides greater market information * complimentary customer propositions ¢ Additional mass market and niche brands increasing penetration upc? —s
Slide 14: 4. Learning how to leverage the advantages of scale...
4. Learning how to leverage the advantages of scale... . 2 Lo | ye a jaa ena pi Higa MeO — . _ a oe ee _ coo . | a iq Poe co - a oo oo LC _ co co a oe Tos oo . i ee ae a oC 2 .. ne | _ on a = i ae i ce 1. | | a cc... 14
Slide 15: ...whilst acknowledging the challenges of scale
...whilst acknowledging the challenges of scale e We understand benefits of a specialist business model 1. Big players often lose! ¢ Organisational discipline & structures in place to unlock ‘collaboration’ benefits 2. Mergers often fail! 3. We purchased a large incumbent position rather than grew i
Slide 16: Why we will win!
Why we will win! 7 _ Lo q | : soe oS i L | Lo s, te ize = ease ga 2 a | gat e) : e rt . -_ c . ae se ee i _ B oF - L L - oe 2 Se _ ee i 9 ee ete Too gs z _ oo. a cs S i ee \ a | _. . CU 9 7 oo a ge - aa ross | 5 - co a a _
Slide 17: Our financial targets
Our financial targets e Revenue CAGR within 7% - 9% Group targets* e Expense CAGR bottom end of 5% - 7% Group targets* however e Cost performance guided by Revenue performance e CTI reduced to 40% - minimum of 1% reduction p.a. *assumes system credit growth of high single ee 17 digits to low double
Slide 18: Key Messages
Key Messages e Almost 3 years on we are very pleased with the acquisition e NZ remains an attractive market despite cyclical economic slowdown e Stable and experienced management team « We have successfully defended the franchise through the integration e Focus has shifted from defending to growing
Slide 19: Additional Information
Additional Information al it NE 19 Fe ey A es, ie is
Slide 20: Credit quality is strong
Credit quality is strong Non Accrual Loans remain low $m 300 7 T 0.4% T 0.3% 200 + 7 0.2% 100 4 7 0.1% 04 0.0% Mar-04 Mar-05 Sep-05 Mar-06 Jul-06 ea Non Accrual Loans (LHS) =@ Non Accrual Loans / Net Lending Assets (RHS) Slight up-tick in delinquencies from historically low levels (60 day delinquenc
Slide 21: 'Two Brand' retail strategy essential to growing share
‘Two Brand’ retail strategy essential to growing share Gaining share through customer acquisition more likely under two brand strategy 100% 7 90% 4 Single Brand Strategy ™ (36% share*) % wonof 80% 7 “ her bank customers 70% * 56% of customers who are 4 “oy switching from switching 50% Two Brand Stra
Slide 22: Expected weakness in the NZD will impact ANZN's FY07 earnings growth
Expected weakness in the NZD will impact ANZN’s FY07 earnings growth at a Group level A$/NZ$ exchange rate « Over the past 20 years the average AUD / NZD exchange rate has been 1.22 i.e. close to its current level. ¢ The top end of the NZD range has been clearly defined at around 1.05 - 1.10 « The b
Slide 23: NZ integration complete - costs impacted by RBNZ requirements
NZ integration complete - costs impacted by RBNZ requirements, revenue attrition contained Reduced scope lowered initial estimates RBNZ requirements increased final costs i 1 1 j i 1 H i H Hi if % i 1 1 i I Revenue benefits 2007 pa : Driven by Institutional businesses Reduced scope & RBNZ requiremen
Slide 24: NBNZ Integration is complete
NBNZ Integration is complete 2004 2005 2006 (f) 2007 (f) NZ$m Total Integration costs 49 139 51 0 Incremental Integration Opex 29 85 42 oO Cost synergies 6 33 44 70 Revenue synergies 1 26 44 50 Attrition 20 33 34 34 Net synergies -13 26 54 86 ¢ The Integration programme was a substantial body of wor
Slide 25: ANZ and National Bank reach 54% of New Zealanders
ANZ and National Bank reach 54% of New Zealanders ANZN Current oyessinsiinnssnnsnnte 5 Reach : enone Pn nnn seni 11% 54% : “ee t S 3 x ey er © c 2 : =o ge 28 =D vu ae : z Oo £é gs : o8 SE ON t zZzV = 9 Sz ‘ 5? os = : Main Bank Total Cust. Total NZ Share Reach Banking Mkt Source: AC Nielsen Consumer
Slide 26: Customers extending terms to offset impact of rising short term rates
Customers extending terms to offset impact of rising short term rates Repricing profile of ANZ Retail home loan book Growth in longer dated loans a rational consumer response to inverted yield curve m4<5 years 3 <4 years O2<3 years O1 <2 years &< 1 year © Floating 0% + = T T T T _ T T Dec- Jun- Dec-
Slide 27: Executive biographies
Executive biographies Graham Hodges - Chief Executive & Director Graham Hodges is Chief Executive and Director of ANZ National Bank Limited, responsible for ANZ's New Zealand businesses. He was appointed to this role effective 1 January 2006. Prior to this, Graham held the positions of Group Managin
Slide 28: Executive biographies
Executive biographies Wayne Besant - MD ANZ Retail Wayne Besant has recently been appointed Managing Director ANZ Retail. ANZ Retail encompasses the Personal, Business Banking, Mortgage and Advisory Distribution segments. Wayne was previously General Manager ANZ Distribution, a role he held since 20
Slide 29: Executive biographies
Executive biographies Jeff Greenslade - MD, Corporate & Commercial Banking Jeff Greenslade is the Managing Director of Corporate & Commercial Banking for ANZ National Bank. Prior to ANZ's acquisition of the National Bank of New Zealand (NBNZ) in 2003, Jeff was the Director, Corporate and Commercial
Slide 30: SS Sc —
SS Sc — Te S,-————_c ST
Slide 31: Retail Session
Retail Session 1. Understanding ANZ National retail issues Craig Sims 2. National Bank Retail Craig Sims 3. ANZ Retail Wayne Besant al it NE 31 Fe ey A es, ie is
Slide 32: ANZ National Retail Banking Profile
ANZ National Retail Banking Profile Key Metrics Revenue Composition by Business Consumer Finance _ Branches 148 160 ) , Business : | Deposits Banking ATM's 412 292 | Staff 2,700 3,100 Pp | Market Share" am 18% 18% Other i Mortgages | Business Banking | _ Market Share™* 12% 26% * Source: ACNielsen Ma
Slide 33: ANZ and National Bank brands reach different customers
ANZ and National Bank brands reach different customers CORE TARGET BRAND ESSENCE CUSTOMER BENEFIT BRAND SIGNATURES BRAND EXPRESSION New Zealanders who want everyday banking solutions Can do attitude of staff Convenience and Simplicity in an NZ context Blue, staff, local, community The better we know
Slide 34: NZ Mortgages — putting your mind to rest
NZ Mortgages — putting your mind to rest ¢ Beginning to gain share following a long period of underperformance by ANZ ¢ No significant movement in share during ‘fixed rate war’ e Recent margin contraction largely driven by switching from variable to fixed e > 80% of market now fixed rate (70% pre pr
Slide 35: Customer acquisition, what is really happening?
Customer acquisition, what is really happening? Survey 1: NBNZ acquiring, ANZ . : * flat, combined slightly down Reality: NBNZ acquiring, ANZ . 7 . Aa A Net Customer Acquisition Over Time improving, combined gaining soe) Mw, ote be 25% ent _— iwi 20% a . 5% 4 15% ~~ 10% . ‘ 50, OOO 2% . 5% fey -10%
Slide 36: The National Bank
The National Bank Ae te 36 Axe
Slide 37: The National Bank - the fundamentals are in good shape
The National Bank —- the fundamentals are in good shape One of New Zealand’s strongest brands High staff engagement 66% 60% NBNZ Retail ANZ Group Banking Benchmark Customer satisfaction remains at Solid profit growth top end of major peers* (Profit before Provisions pcp”) 80% _. aT 70% Oa 8% 8% 8% A
Slide 38: We continue to build on our core strengths...
We continue to build on our core strengths... Tertiary Market Share: Spectacular ¢ #1 in tertiary market provides retention and transition our ‘pipeline for growth’ (Retention of acquired youth customers’) 100% ¢ 24% more tertiary customers in 80% 2006 60% ° We keep more tertiary customers ne Yo whi
Slide 39: ...and are having success in a number of attractive growth segments...
..and are having success in a number of attractive growth segments... e To succeed in NZ, you must succeed in Auckland, NZ’s fastest growing market e Increased investment and focus on Auckland paying dividends ¢ The only major bank to gain share since 2002 ¢ Future investment and focus weighted to A
Slide 40: ...however there are areas we need to improve
. .Nnowever there are areas we need to improve « Below systems Mortgages growth driven by a number of factors: e ANZ recovery, a source of growth in the past e Defensive vs Aggressive pricing strategy e Performance turnaround underway ¢ Deposits performance below market share in 1HO6 ¢ Online saver
Slide 41: Why we will win!
Why we will win! 1. We will continue to win in Auckland 2. Market leading small business proposition 3. Strong brand & growth pipeline > J Proven capability to win market share in Auckland Realistic expansion opportunities in Auckland Significant customer information advantage Largest dedicated smal
Slide 42: Summary
Summary e National Bank a strong brand, strong fundamentals e More customers bank with us today post the merger e Building successfully on core strengths and addressing areas of softness ¢ Speed of renewal to deliver above system growth e We will continue to win! Ae i ele ie as 42
Slide 43: rr
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Slide 44: ANZ Retail - "We're back in the game"
ANZ Retail - “We’re back in the game” Successful turnaround underway Investing for growth e Increasing representation e People & culture e Simple customer propositions We are growing market share in all products Great team of people; staff love working here 44 Ae i ele ie as
Slide 45: Business is turning around, but more to do!
Business is turning around, but more to do! 1. Low Customer Satisfaction 2. Uncompetitive Products 3. Disparate Business Model e Rebuild Sales & Service Capability * > 200 new frontline FTE & 6 branches opened e Frontline leadership focus, increased recruitment & training e Increased brand & communi
Slide 46: How are we tracking?
How are we tracking? * AC Nielsen main bank customer satisfaction. Excellent & Very Good 46 * Source: Annual Growth — 2006 YTD to July ratings (rolling 4 quarter average) ** Source: share of Banking Ombudsman complains
Slide 47: Mortgages: Leading the turnaround
Mortgages: Leading the turnaround Mortgage share decline reflective of Mortgage share growth now business deterioration (FY99 - FY02)* reflective of turnaround success (annualised mortgage growth) (FYO3 - FYOQ6) * (annualised mortgage growth) 20% 7 20% 4 16% 7 16% 5 12% + ‘ 12% 4 8% Nx 8% | 4% 7 4%
Slide 48: Early days, but momentum is building
Early days, but momentum is building Above system Balance Sheet growth (2006 YTD FUM growth annualised*) 14% 14% We, b Mortgages Consumer Deposits Finance ti ANZ ta System Profit Growth Rebuilding (Profit before Provisions pcp growth) 7% -1H06 hoh growth* -15% * Source: Mortgages RBNZ C6 home lendin
Slide 49: Why we will win!
Why we will win! 1. Clear Business Momentum 2. High Staff engagement 3. Leverage Australian Personal Banking success > b Build on current momentum to capture natural share ¢ Significant scope in all product segments Improve cross sell and customer retention Key focus on Auckland market Staff engagem
Slide 50: ANZ Retail - Definitely back in the game
ANZ Retail -— Definitely back in the game Successful turnaround underway, but more to do We are growing share with even more upside Our people are highly engaged, they want to win We have proven that we can deliver, to reclaim ‘what is ours’ 50 aur ie as
Slide 51: SS rrrrrrrr—“—i‘“‘“<‘“i<‘i‘i‘i‘i‘i‘i‘i‘“i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i
SS SS ee ee = ee SS rrrrrrrr—“—i‘“‘“<‘“i<‘i‘i‘i‘i‘i‘i‘i‘“i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i‘i ee ee: ee ee
Slide 52: Key Messages
Key Messages e Rural market significant component of NZ economy e We have successfully defended our position through integration e Predominately a lending business, gaining traction on cross sell, significant opportunity remains e¢ Credit growth and credit quality outlook favourable Ae i ele ie as 5
Slide 53: Rural - a large driver of the NZ economy
Rural - a large driver of the NZ economy NZ Rural Market Significant contributor to NZ economy Temperate climate, fewer extremes - beneficial to low cost pastoral farming Sound support infrastructure Solid industry economics Low loss history ANZN Rural Business Contributes ~ 12% of ANZN NPAT 17,200
Slide 54: Good financial performance, credit quality strong
Good financial performance, credit quality strong Increased competition Managing income and cost impacting 1HO6 performance growth (Profit Before Provisions pcp growth) 45% (Cast to Income ratio) ‘oO 12.0% 8.0% 40% 37.3% 0, 4.9% 35% [J 30% + : : : : Sep-04 Mar-05 Sep-05 Mar-06 1HO5 2HO5 1HO6 Solid B
Slide 55: Rural customers in strong financial position
Rural customers in strong financial position e Credit growth has been mid double digit, forecast to slow to ~ 10% - Ongoing aggregation and consolidation - Increased focus on investments outside farming ¢ Low NZ$ driving supporting farm incomes e Continued productivity gains across the industry e Fu
Slide 56: Slight market share decline in an increasingly competitive environment
Slight market share decline in an increasingly competitive environment e National Bank share defended through integration e ANZ share partially impacted by migration of customers to National brand e Focus on identifying and revitalising niche positions for ANZ brand e Increased competition in the ma
Slide 57: Why we will win!
Why we will win! 1. Most Experienced & Stable Team 2. Widest Coverage p> 3. Quality Products p> 42% of rural managers > than 11 years experience 72% of staff tertiary qualified Staff turnover 6.2% (banking industry ave. 17.4%) ~ 40% market share, we bank 1 in every 2.5 deals Greatest geographic cove
Slide 58: Summary
Summary Rural market significant component of NZ economy We have successfully defended our position through integration Predominately a lending business, gaining traction on cross sell, significant opportunity remains Credit growth and credit quality outlook favourable Ae i ele ie as 58
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Slide 60: Key Messages
Key Messages What we do e Manage the banking arrangements of customers with turnover from $2- $150m through their business lifecycle e Simple and complex banking requirements e Security and cashflow lending through to Leveraged Finance We have been successful e Strong financial growth e Market leadi
Slide 61: C&CB - represents a significant component of the NZ market
C&CB - represents a significant component of the NZ market Three dual branded segments C&CB contribution to NZ i * e Commercial ($2m- $30m turnover) earnings , . C&CB « Private ownership « Revenue from vanilla products « Primarily Security based lending - some cashflow lending Other Businesses ¢ Cor
Slide 62: Strong financial performance
Strong financial performance Strong revenue and profit... (pcp) 9% 9% 9% 8% + 2HO5 vs 2H04 4% 4 4 LHO6 vs 1HO5 0% + Revenue PBP Strong balance sheet growth... (Half on half growth, annualised) 30% 20% 20% 2 1HO5 w 2HO5 10% ft 1HO6 0% Lending Deposits 40% 35% 30% 25% ..and focus on efficiency driving
Slide 63: A diversified portfolio in good health
A diversified portfolio in good health A diversified lending portfolio Two thirds of lending fixed rate (Net Loans & Advances by Industry Jul-06) (% Net Loans & Advances Jul-06) “2 Property - Residential Property - Office ts Property - Retail Property - Other @ Business Services Overdrafts @ Manufac
Slide 64: Customer proposition built on leading distribution and product capability
Customer proposition built on leading distribution and product capability Improving customer satisfaction in both brands* e Strong Relationship Model 90% e Largest distribution network 80% e Leading product capability 70% ¢ Consolidation & Succession 60% e UDC —- new joint venture 50% + T T t T : T
Slide 65: Dominant market share positions for growth
Dominant market share positions for growth Corporate Segment (Jun-06)* Share of Lending Main Bank Share 43% e Share of lending in the Corporate segment has improved from 40% to 43% over 4 qua rters BEANZNB fiBank1 @%Bank2 f&Bank3 ISANZNB etBanki %&Bank2 wBank3 Commercial Segment (Jun-06)* ¢ National
Slide 66: Why we will win!
Why we will win! 1. Widest Coverage * 172 Relationship Managers in 30 offices provide accessible expertise and service ¢ Cross sell into a large client base: derivatives, trade and cash management into the Commercial market ¢ Link to core product providers: Private Bank, UDC and Capital markets Cons
Slide 67: Summary
Summary e Strong financial growth e Leading customer satisfaction and product innovation e Strong relationship based service model e Clear vision for driving the business forward 67 = Home ie as
Slide 68: Additional Information
Additional Information 68 = Home ie as
Slide 69: Business Structure
Business Structure e The business is segmented by customer complexity, not by brand e Dual brand sales teams within segments have common leadership and are co-located ¢ Combined, dual brand head office and support functions e Supported by dual brand product partners Corporate ANZ Commercial | ANZ
Slide 70: Slide 70
Slide 71: Key Messages
Key Messages Clear market leadership within most profitable product categories e Low reliance on balance sheet lending e Strong management depth ¢ Growth is coming from leveraging scale and innovation from Institutional market across our broader bank customer base ¢ Promoting customer solutions not
Slide 72: NZ Institutional overview
NZ Institutional overview Client Relationship/Debt Product Group Aviz, § Institutional contribution i * — Clients with turnover above NZ$1i50m to NZ earnings — Corporate lending — Approx 300 clients Corporate & Structured Financing Aiia Institutional — Debt Capital Markets — Project Finance — Leasin
Slide 73: Composition of NZ Institutional business very different from Australia
Composition of NZ Institutional business very different from Australia Contribution to Earnings* ¢ Contribution of specialist product businesses greater in NZ New Zealand DPG ¢ Only 17% of NPAT from lending T&TS e Strong franchise in both Financial Markets and Debt Markets ” CRSF Capital Markets - 5
Slide 74: Increased market volatility and less intense competition driving favourable environment
Increased market volatility and less intense competition driving favourable environment e Institutional business drivers: ¢ M&A Activity e FX & Interest rate Volatility e Mix of products ¢ 1HO6 market volatility created both trading and sales opportunities e Better volumes, mix & margin e Global cap
Slide 75: Integration attrition replaced with new revenue streams
Integration attrition replaced with new revenue streams Profit momentum following integration (Profit before Provisions pcp) 27.0% -2.6% owe a -6.0% 1HO5 2HO5 1HO06 Portfolio credit quality strong, 86% investment grade NZ$4.7b Scale delivers strong underlying ‘core’ revenue streams $m (Profit before
Slide 76: Leading position, but differentiate on innovation and trust
Leading position, but differentiate on innovation and trust ¢ NBR* INFINZ Bank of the Year - 2005 & Lead Relationship Bank 2006 since 2004"** ¢ #1 Insto Public Corporate Bond League % Tables (51% of issuance YTD)™* 39% . . sea 30% ¢ #1 customer relationship strength*™*: 24% * Innovation * Trust ¢ Bu
Slide 77: Cost efficiency - One kitchen, two dining rooms....
Cost efficiency - One kitchen, two dining rooms.... e Successful systems integration - cost to income ratio 26% e Single processes and platforms developed for both ANZ and the National Bank e Scale efficiency allows us to take Institutional products to the middle market e New Transactional Banking w
Slide 78: Why we will win!
Why we will win! ¢ Completion of integration has allowed full attention on revenue creation 1. Clear Business Momentum ¢ New and fast growing revenue streams are delivering ¢ Cross business collaboration capturing transaction flow from volatility and M&A activity 2. Well recognised « A strong pipeli
Slide 79: Summary
Summary e Clear market leadership within most profitable product categories e Low reliance on balance sheet lending e Innovation and solutions more important than size or lending e Strong management depth e One kitchen - two dining room creates cost efficiency e Growth driven by customer solutions n
Slide 80: Additional Information
Additional Information 80 = Home ie as
Slide 81: Customer Position & Product Penetration
Slide 82: Leading Transactional & Trade share but lagging on relationship and satisfaction
Slide 83: Slide 83