Anz Group Holdings Limited · ASX:ANZ
Anz — Australia and New Zealand Banking Group — Investor Presentation (March 2007)
32 slides from Anz's investor presentation, Mar 6, 2007
Slide 1: AN Hil
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Slide 2: Contents
Contents 1. Consumer Finance Overview 2. Business Model and Capabilities Outline Brand e Information management (smart analytics) e Strategic agility e Customer experience e People and culture 3. Credit quality
Slide 3: Overview
Overview ud
Slide 4: The Consumer Finance Business
The Consumer Finance Business 42 yarn Note ~ all FUM figures as at 30 Sept 2006 ie i 8 ine 94 staff #101 staff 49 staff 166 staff °4 staff 910 staff 442 staff 0 *FUM $6b «FUM «FUM ©75k #2000 «Aust. Includes; i?) $1.5b $216m customers ATMs Leading . = «2.7m Call Centre «Operations ci oO cards on Ave.
Slide 5: Strong performance in Consumer Finance, within a high performing Personal division
Strong performance in Consumer Finance, within a high performing Personal division Sep-06 Business Unit Sep-05. Cash NPAT ($m) Mortgages 4p 21% 363 Banking Products 4 17% | Consumer. Finance 25% Regional, Rural & Small Business Banking 18% t Esanda tt 1 °” t t Pacific 67% z= 65 ao 37 Investment & In
Slide 6: Consumer Finance has consistently been one of the Group's best performing businesses
Consumer Finance has consistently been one of the Group’s best performing businesses Solid Consumer Finance FUM # .. driving strong growth in revenue... growth... Cards Under Accrual adjustment ., ($m) 597 2001 2001 ..and consistently strong profit growth (NPAT) . Income evenly split between NII & O
Slide 7: Business Model & Capabilities
Business Model & Capabilities Pils ie 8 i
Slide 8: A common business model and capabilities across Consumer Finance
A common business model and capabilities across Consumer Finance Our approach “Repeatable formula to rollout a series of initiatives into adjacent customer / market segments” Our core capabilities “Success relies on all capabilities working together” 5 specialised businesses: Consumer Cards, Merchan
Slide 9: Strategy starts with clear understanding of consumer segmentation
Strategy starts with clear understanding of consumer segmentation Price Driven Service Drive! OO rencaanermt wv “ ross LR ERLE SASS Premium e ANZ brand for non price-driven segments e Other brands for Prime other segments e Defend share via price where necessary Emerging Prime Sub Prime Un-banked ea
Slide 10: Consumer Finance strategy consistent with "More Convenient Banking"
Consumer Finance strategy consistent with “More Convenient Banking™ ANZ Now Consumer Finance ‘Open an ANZ Everycay Visa Debit Singh ay A ereaties today 9033 So
Slide 11: Smart analytics central to Consumer Finance success
Smart analytics central to Consumer Finance success Case Study: A recent product launch supports ¢ Significant investment in - a the notion that price is not the only lever customer data management & market research: Take up rate % 1.Qualitative Research 354 oo ff +2% premium « Significant resources
Slide 12: Case Study: October 2003 successful interchange fee response
Case Study: In October 2003 successful interchange fee £1 response based on extensive customer research & analytics... Understanding our Customers « Customer Research: 1,200 existing customers surveyed to understand the perceived impact of different product changes Key Findings: ¢ Increased Annual F
Slide 13: Driving a favourable portfolio and profit outcome
.. driving a favourable portfolio and profit outcome ANZ share of spend was adversely impacted by the reforms... (Share of Mkt Spend 3 month rolling average) 27% 24% 21% ae 18% / 15% ANZ Interchange response takes effect 12% 4 T T 1 T Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 ..resulting in increased Outst
Slide 14: Our new brand position seeks to differentiate on key customer moments of truth
Our new brand position seeks to differentiate on key customer “moments of truth” New Brand Positioning Security Low Rate Premium Rewards Visa Debit Help you take Enhance your Real value 24/7 access to ae control of card lifestyle from every day your own money ANZ Falcon debt spending + Service Low F
Slide 15: Innovation is core to our customer centric strategy
Innovation is core to our Customer centric strategy First chip card in First major bank First major bank Australasia low rate card 4 ; First bank with i i: 24x7 call centre + Visa Debit customer charter 1996... 2001 2002 2003 2004 2005 2006 a a @ @ ® @ ® — First bank to partner with 3 party scheme F
Slide 16: Case Study: Deep understanding of customers enhances strategic agility
Case Study: Deep understanding of customers, ; opportunities, and threats enhances our strategic agility Respond rapidly to competitive opportunities and threats February 2005 - response to competitor’s 0% Balance Transfer threat Sat. 12th Mon 14th Tues 15th Wed 16 - Fri 18th Sat 19% 1 GE's “Low Rat
Slide 17: Balance Transfer has had a positive impact on our portfolio
Balance Transfer (“BT”) has had a positive impact on our portfolio 0% BT offers enable ANZ to capture larger interest-earning balances « Payment hierarchy central to Balance (Interest Earning Balance per Account) Transfer (“BT”) business case « Low rate portfolio is value accretive « 12 months of ac
Slide 18: A good track record of successful Alliance relationships
A good track record of successful Alliance relationships in Australia and overseas
Slide 19: Continually delivering above peers on product and service excellence
Continually delivering above peers on product and [2%cc service excellence ANZ Consumer Cards remains at top of Award winning customer service other majors in customer satisfaction capabilities Score 8.55 L. B HT eomnenn [NZ ooo Bank 1 wm Bank 2 Bank 3 6.5 T T T T T Sep-01 Sep-02 Sep-03 Sep-04 Sep-0
Slide 20: ANZ is committed to financial literacy
ANZ is committed to financial literacy e We continue to invest in community programs and work with community partners aimed at improving the financial literacy of Australians e Financial literacy and matched savings program: ANZ matches $1 for every $1 saved by eligible participants ($1000 ais cap)
Slide 21: Consumer Finance is at the forefront of Responsible Lending
Consumer Finance is at the forefront of Responsible Lending Promoting responsible lending practices to ANZ customers with poor recent credit performance or on income support What are we doing? ANZ Customer Charter includes new ‘responsible lending promises’ to prevent credit limit increase (CLI) Enh
Slide 22: A strong emphasis on staff, lead by a highly engaged management team
A strong emphasis on staff, lead by a highly engaged management team ANZ Consumer Finance employee value proposition Free to Grow Be the Best, Se Inspired, Be Respangitte Bethebe Marker Leader, Deliver Results, i _ Dynamic, Alive, Informed, Achieve. / Be Responsible : Customer, Community, Diversity
Slide 23: People and cultural values upheld through flexibility and diversity
People and cultural values upheld through flexibility and diversity Flexible work arrangements Women are well represented in supported in Consumer Finance management e 24% of staff are on part time (% of women in management roles in consumer Finance) contracts e 23% have utilised carers 46% 52% leav
Slide 24: Credit Quality
Credit Quality Pils ie 8 i 24
Slide 25: We said back in October it was hard to see credit quality getting better
We said back in October it was hard to see credit quality getting better! Individual Provisions at unsustainably low levels $m ¢ Continued growth in the 600 9 portfolio Consumer: Key Drivers e Change in portfolio mix from growth in unsecured products - low rate cards 500 4 400 4 A 7 ¢ Impact on serv
Slide 26: In theory credit card losses result from four key drivers
In theory credit card losses result from four key drivers aside from outstandings growth, the economic cycle & collections activity (4, (Cutcoff scores/credit policy are set to maximise risk i, ), Different products attract customers of different adjusted revenue (RAR) '_|© | credit quality (60+days
Slide 27: ANZ losses largely driven by product mix shift and portfolio seasoning
ANZ losses largely driven by product mix shift and portfolio ‘seasoning’... Highest rate of growth in Low Rate cards (% growth in Outstandings) ¢ Increased credit card loss growth due to: ¢ Strategic shift to higher- revolving, low rate products ¢ Portfolio seasoning - losses peak at ~ 18 to 24 mont
Slide 28: Which are highly predictable
..Which are highly predictable « Consumer Finance Individual Provisions are highly predictable e Losses are closely monitored against expectations — both loss rates and timing of loss ¢ Credit policy & scorecards are regularly reviewed to manage lending decisions and loss expectations ¢ Collections
Slide 29: Drivers of higher IPs in 2007 mainly structural in nature
Drivers of higher IPs in 2007 mainly structural in nature, underlying credit quality still solid Potential drivers of Individual Provisions { impact the primary. | driver of higher IPs) f \ ¢ | a (2) 3. a z | < | | f saciciinoieainaiais = Underlying | 7 risk change. neutral} 2006 IP y Seasoning ' Un
Slide 30: No material adverse trends in underlying arrears rates
No material adverse trends in underlying arrears rates Short term arrears impacted by seasonality; Long term rates remain stable {(% arrears to outstandings) 5.0% 7 4.0% J 3.0% 7 2.0% 1.0% 0.0% T T t t Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Cards 30+ dpd ards 90+ dpd «oem Personal Loans 30+ dpd = =m» Pe
Slide 31: Bankruptcies continue to increase
Bankruptcies continue to increase Bankruptcies/debt agreements continuing to rise...* e Bankru ptcies hard to (Aust. Non Business Bankruptcies and Debt Agreements) detect and predict Bankruptcies li Debt Agreements 8,000 e ANZ bankruptcies 6,000 increasing in line with market trends 4,000 ; 2,000 ¢
Slide 32: The material in this presentation is general background information about the Bank’s
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
Australia and New Zealand Banking Group — Investor Presentation (March 2007) on 6ix