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ANZ Sells Grindlays to Standard Chartered

Document date:  Thu 27 Apr 2000
Published:  Thu 27 Apr 2000 16:46:31
Document No:  161445
Document part:  A
Market Flag:  Y
Classification:  Periodic Reports - Other , On-Market Buy Back , Asset Disposal

AUSTRALIA & NEW ZEALAND BANKING GROUP LI      2000-04-27  ASX-SIGNAL-G

HOMEX - Melbourne                                                     

+++++++++++++++++++++++++
* Sale price US$1.3 (A$2.2) billion in cash.

* In addition, ANZ received dividends of US$0.5 (A$0.9) billion from
  Grindlays retained earnings.

* Sale (excluding dividends) equals 2.3 times book value and 14.2
  times annualised first half 2000 earnings.

* Co-operation agreement with Standard Chartered to service ANZ
  customers.

* ANZ announces A$1 billion buyback - one of the largest by an
  Australian company.

* ANZ to focus on growth in Australia, New Zealand and Asia Pacific,
  with increased emphasis on e-commerce.

Australia and New Zealand Banking Group Limited (ANZ) today announced
it had agreed to sell its Grindlays businesses in the Middle East and
South Asia, and associated Grindlays Private Banking business, to
Standard Chartered PLC for US$1.3 (A$2.2) billion in cash.

In addition, ANZ has received dividends of US$0.5 (A$0.9) billion
from Grindlays retained earnings.

The price, excluding dividends, represents a multiple of 2.3 times
book value of US$590 (A$990) million and 14.2 times annualised first
half 2000 earnings.

ANZ also announced today a A$1 billion on-market share buyback, one
of the largest buybacks by an Australian company.

ANZ will continue to provide international banking services to its
customers in the Middle East and South Asia region through a new
co-operation agreement with Standard Chartered. This will give ANZ
customers access to a deeper and much broader network in the region.
Both companies will also co-operate on project finance and corporate
advisory services in the Middle East and South Asia.

In May 1999, ANZ signalled its intention to simplify its
international business and focus it on Asia-Pacific.

Following the sale, ANZ will accelerate the development of its
banking, financial services and e-commerce businesses in its core
markets of Australia, New Zealand and Asia-Pacific. In addition, ANZ
will develop its established international trade, global structured
finance, foreign exchange and capital markets presence in Asia,
London and New York.

ANZ Chief Executive Officer, Mr John McFarlane, said the transaction
is strategically attractive for both organisations and a win-win for
ANZ and Standard Chartered.

"The sale is a good outcome for shareholders, customers and staff of
both banks," Mr McFarlane said.

"For ANZ, the sale generates immediate value for our shareholders and
enables us to simplify and focus our international operations in one
move. For Standard Chartered, it creates the leading international
bank in the Middle East and South Asia, and it will benefit from the
growth and synergies the integrated platform will bring," Mr
McFarlane said.

"The transaction is a substantial step in our strategy to reduce
Group risk and complexity. It reduces ANZ's emerging markets credit
exposures by approximately A$7 billion and will enable us to improve
our return on capital, through a lower tier one capital ratio more in
line with our domestic peers," he said.

Discussing the buyback, Mr McFarlane said: "ANZ is committed to
efficient capital management and we do not believe in carrying excess
capital for possible acquisitions, but rather justifying them to
shareholders at the time they occur. While we remain open to
possibilities, acquisition is not our main focus".

Mr McFarlane paid special tribute to Grindlays' management and staff.
"The outcome and the attractiveness of Grindlays to Standard
Chartered both reflect the hard work and dedication of current and
former staff in the region. The new, larger business will offer our
local staff expanded career opportunities," Mr McFarlane said.

Standard Chartered Group Chief Executive, Mr Rana Talwar, commented:
"This acquisition is completely in line with our stated strategy and
is a significant step towards our objective of becoming the world's
leading emerging markets bank. It also emphasises our commitment to
develop our business in the Middle East and South Asia region".

"The move follows our recent acquisitions of the UBS international
trade finance business and Nakornthon Bank in Thailand, both of which
have been successfully integrated into Standard Chartered. We will
continue to pursue opportunities to develop our unique franchise," Mr
Talwar said.

As part of the transaction, ANZ will provide Standard Chartered with
indemnities on credit and litigation matters, including the National
Housing Bank matter.

On completion, provision will be made for all potential claims under
the indemnities together with costs arising and tax liabilities. This
will include a reassessment, in the light of circumstances at the
time, in respect of all residual financial risks relating to
Grindlays.

The impact of this transaction on ANZ's second half 2000 results will
be dependent on the reassessment of provisions, but if full
provisions for possible claims under indemnities were taken, along
with other appropriate adjustments and taxes, the net impact is still
estimated to be over A$400 million profit.

Completion is expected by third quarter 2000 and is subject to normal
conditions, including regulatory approvals.

For media enquiries, contact:

Paul Edwards, HEAD OF GROUP MEDIA RELATIONS 
Tel: +61-3-9273 6955, +61-409-655 550 (mobile) 
email edwardp12@anz.com

For analyst enquiries, contact:

David Ward, GENERAL MANAGER OFFICE OF THE CHIEF EXECUTIVE 
Tel: +61-3-9273 4185 or +61-412-216 896 (mobile) 
email David.Ward@anz.com