1998 Final Results Presentation Analysts

1
Supplementary Information Analyst
Briefing Answers to questions not covered in
Results Press Release David Ward General Manager
Office of the Chief Executive
2

• Lending Fee Growth
• Strong across all businesses including
  introduction of new fees in Esanda, Business Bank
  and Personal, and improved collection practices
• Significantly driven by higher volumes
• Economic Loss Provisioning
• Expect economic loss provision charge expressed
  as a percentage of net lending assets expected to
  fall gradually over time as risk is reduced

3

• Increase in Other Personnel Costs
• Principally sales incentives and performance
  bonuses
• Return on Risk Adjusted Capital
• Not released on a business unit basis but exceed
  20 in all divisions except international
• Cost Savings
• Productivity gains ongoing necessity for banks,
  however we are also seeking to improve the
  customer experience

4

• International Profit - Second Half
• UK/Europe and USA benefited from tax credits in
  first half
• Asset quality deterioration impacted Asia Pacific
  and Middle East earnings
• Cost increases in second half, eg award increases
  in India
• Second half better base going forward than first
  half with income being sacrificed for risk
  reduction
• Deductions from Capital
• Number of investments, the largest of which was
  Panin (about 150m)

5

• National Housing Bank
• Plan to take steps to accelerate resolution
• Life Insurance AASB 1038
• The Bank already adopts the margin on services
  profit recognition methodology, so the new
  standard will not initially impact profit.
  Options of valuing the full life insurance
  company are to be reviewed.