Slide 1: Australia's First Bank: Simple things, significant results
AIfestpac Australia’s First Bank Simple things, significant results David Morgan Chief Executive Officer UBS Conference 20. November.2003
Slide 2: Delivering on our focused strategy
Delivering on our focused strategy High quality result ~ Underlying cash earnings $2,271m up 10% - Cash return on equity maintained at 21% - Dividend of 78 cents per share fully franked up 11% Key drivers of growth - Robust growth in loans and acceptances up 17% - Normal sector margin decline down 7
Slide 3: Driving the gap between revenue and expenses
Driving the gap between revenue and expenses 4 Year CAGR' o- Revenue 7.5% lil Expenses? 3.5% —#- Core earnings 12.5% T wea * Underlying basis (excl. significant items) DS ? Excluding goodwill UBS Conference, November 2003
Slide 4: All businesses contributing
All businesses contributing Cash earnings‘ ee Growth 2002 — 2003 | 7 .... Contribution - : - Business & Consumer _ Banking Wee 54% ae 15% | aT. ey . : y 8% 48% | Institutional H 0, co 1% 40% bed Banking Sae 14% — 14% $m T T ’ rs T T= 1% 6 500 1000 1500 0 20 40 60 | @ 2003 02002 ‘ Excluding significa
Slide 5: Well advanced in improving employee commitment
Well advanced in improving employee commitment -% of employees reporting a positive score 100 80 60 01.2000 40 @ 2001 2002 20 @ 2003 0 Employee Commitment Leadership Employee.engagement and effort* * New measure introduced in 2002 UBS Conference, November 2003 estpac Aw 5 First Bank,
Slide 6: Reputation/sustainability - enhancing returns
Reputation/sustainability - enhancing returns Sustainability - supporting the value chain Employees as 7 7 --A-company where people want to work An institution customers want to do business with Enhance sustainability of returns * Improved employee retention * Enhanced ability to attract quality sta
Slide 7: Execution — delivering on our commitments
Execution — delivering on our commitments Commitment Status Group —| Cash EPS guidance 7% to 9% Delivered 9.3% - October: 2002 Disciplined acquisition approach || Withdrew from NBNZ sale BT Deliver on. budgeted synergies Synergies upgraded and delivered Enhance investment performance. | Performance
Slide 8: In business, the biggest opportunity is still in SME
In business, the biggest opportunity is still in SME Geography Segments State 1 State 2 State 3 State 4 State 5 Total ae 112 74 35 95 44 360 Agribusiness 26 (| 23% 32 43% 15 | 44% 12 13% 40 ( 22% 95 462 303 145 389.) 182 1481 SME 53 (11% 18 6% 7 5% 34 8% 1 10% 130 | 9% 133 87 42 112 52 426 Middle Ma
Slide 9: Business segment strategy
Business segment strategy * Internal research reveals business customers needs have not been well met by the major banks. Key findings and our responses: * Reduced turnover of | * Updated credit «Revamped business managers — processes. | business online ~ * Returning up to 80 * Decision made... | ©.
Slide 10: Major programs in place to tap opportunities
Major programs in place to tap opportunities Key Opportunities * Improve customer acquisition capability Key Programs» Sales and * Strong relationships Distribution but weak share of wallet across existing customer base Manufacturing | Pinnacle ¢ Pursuit of market leadership for service estpa 10 UBS
Slide 11: Sales - Reach program
Sales - Reach program A cross product, cross geography, end-to-end sales and information management re-engineering program including CRM Plans and objectives Metrics from pilot Performance above current model « Relationship platform delivered to Branch referral 6.0X 111 managers conversion rate * Co
Slide 12: Improving customer satisfaction
Improving customer satisfaction * Business customer satisfaction: Business customer.satisfaction’ ~ In Australia 8h 9 * SME up 4 percentage points June 2002 to 70% 3 June 2003, and ox 4 * Middle Markets up 10 percentage points 60% + - New Zealand — customer satisfaction improved by 5 55% 3 percentag
Slide 13: Consistent market share improvements
Consistent market share improvements * Reclaiming market share and Market share of financial system‘ reacquisition of equipment finance book 16%. * Business loan outstandings in 15% | Australia up 12% with market share up 190 basis points 14% * Business deposits up 10% 19% 4 * Equipment Finance up 1
Slide 14: Reacquisition - twelve months ahead of plan
Reacquisition - twelve months ahead of plan Equipment Finance portfolio $bn (Original balance - $5.1bn) 5.0.5 = Actual re-acquisition of business book 4.0.4 -w Initial planned rate of re-acquisition 2.0 = - i i 0.0 T T T May-02. Jun-02. Sep-02. Mar-03° Sep-03° Sep-04 estpac Aw UBS Conference, Novemb
Slide 15: Whilst maintaining credit standards
Whilst maintaining credi t standards | Categories of stressed exposures 18% poncnnn ener 1.6%. + ---2nennnnanere nn 1.4% +- fee |----- 22-2205 1.2% 1.0% 0.8% 0.6% 0.4% 0.2% 0.0% as a-% of total commitments? AGC stressed loans. (2 Watchlist & substandard @ 90 days past due well secured @ impaired per
Slide 16: Summary
Summary ¢ All businesses are generally in strong shape ¢ Entering the 2004 year with good earnings momentum * Strong market share growth, particularly in Business Banking ¢ Major programs in place supporting customer acquisition, further value extraction and our service leadership mission * Outlook