Global Foreign Exchange

1
Global Foreign Exchange

• Chris Cooper
• Global Head of Foreign Exchange
• Australia and New Zealand Banking Group Limited
  20 July 2001

2
The pre-eminent Australian FX bank

• Financial performance
• Low risk/volatility
• Leveraging our core capabilities into new growth
  opportunities
• Goals for Global Foreign Exchange

3
The foreign exchange market

• Globally FX volumes are falling despite earlier
  optimism. Daily volumes are trending US1tr
  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.

4
The business continues to perform strongly
m
Operating Income
Profit After Tax
m
25 Growth
15 Growth
Mar-01
Sep-00
Mar-01
Mar-00
Mar-00
Sep-00

FTE
Cost Income
Mar-01
Mar-01
Sep-00
Mar-00
Sep-00
Mar-00
5
with earnings based on a diversified portfolio
recurring revenues...
1995 Portfolio
2001 Portfolio
6
and an extremely low risk profile
Daily Value at Risk Trends
USm
Limit US5.2m
Avg use US710k
Dec 99 Mar 01
Source Group Market Risk

• 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

7
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)

8
By leveraging our core capabilities with
differentiated products and service...
Capability
Differentiation
X

• 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

9
we have developed additional growth
initiatives...
Investors
Focus on deeper penetration of global investors
All linked to eTransformation
Small Business
Improve ANZ product penetration to this sector
Commodities
Focusing on delivering commodity solutions to
consumer manufacturers
10
which underpin our business strategy

• 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

11
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

12
Copy of presentation available on www.anz.com