Skip to content

Preliminary Final Report

Document date:  Thu 26 Oct 2000
Published:  Thu 26 Oct 2000 09:16:10
Document No:  168995
Document part:  A
Market Flag:  Y
Classification:  Preliminary Final Report , Dividend Record Date , Dividend Pay Date , Dividend Rate


HOMEX - Melbourne                                                     



Australia and New Zealand Banking Group Limited (ANZ) today announced
a record operating profit after tax and before abnormals of $1,703
million for the year ended September 2000, up 15% on last year
(FY1999 $1,480m) and ahead of market expectations.

ANZ has also used the opportunity of the profit on the sale of
Grindlays to take an abnormal restructuring charge of $361 million in
order to accelerate the benefits of implementing its new strategy
announced in July 2000. This program is planned to be implemented
this year and next, and ANZ expects to recover the majority of this
expenditure by the third year from productivity improvement and
revenue enhancement.


* Operating profit after tax before abnormals:

  Full Year:   $1,703 million, up 15%

  Second half: $885 million, up 15.8% on 1999, and 8.2% on first half

* Earnings per ordinary share up l5% to $1.04

* Return on ordinary shareholders' equity of 18.3% up from 17.2%

* Final dividend 35 cents, up 5 cents with 100% franking. Full year
  dividend 64 cents, up 14%

* $361m restructuring charge to accelerate new strategy

* Net abnormal profit $44 million - Grindlays profit largely offset
  by restructuring and other provisions

* Costs flat. Cost income ratio down to 51.7% from 54.5%

ANZ Chairman, Mr Charles Goode said: "This is a good result. It is
the outcome of three years of hard work reinvigorating ANZ. During
the last 12 months, 15% earnings growth has been achieved and return
on equity is up to 18.3%. Management and staff are to be
congratulated on their achievements."

"We now have to make a step change to ensure we continue to
outperform in an intensely competitive and rapidly changing market.
The sale of Grindlays dramatically reshapes ANZ and creates a more
solid foundation to deliver continuing value for our shareholders and
customers," Mr Goode said.

ANZ Chief Executive Officer, Mr John McFarlane, said over the past
three years ANZ had delivered on its commitments to improve its
financial performance, to rebalance its portfolio and to reduce risk.

"Using the financial capacity provided by the abnormal profit from
the sale of Grindlays, we have decided to advance the restructuring
necessary to accelerate the implementation of our new strategy," Mr
McFarlane said.

The program comprises 35 major initiatives, spread across ANZ's 21
businesses and support activities. It involves a substantial
restructuring of our current technology, premises and operational
infrastructure across the Group. Each initiative has specific
implementation plans, and will be rolled out at different times over
the next two years. Announcement of the detail of these programs will
be made in due course, internally and externally as appropriate. The
main highlights include:

* The modernisation and reshaping of metropolitan branches and sales
and service outlets into specially tailored retail outlets,
configured around the specific needs of our three new customer
businesses of Wealth Management, General Banking and Small Business.

* The transformation of ANZ's General Banking delivery platform,
including a new sales and service platform, and imaging technology to
improve productivity of processes and workflow.

* A substantial reengineering and upgrading of the Esanda systems and
operations environment.

* The upgrading of the EFTPOS network to reduce maintenance and
telecommunication charges and to increase flexibility for future
enhancements such as smart card technology.

* The simplification of the Asia Pacific business platforms and
centralisation of operations.

* The rationalisation of ANZ's IT platforms, including the
decommissioning of mid range IT systems, workflow improvements and
other hardware upgrades required for e-transformation.

Mr McFarlane said: "We will bring forward the development of our 21
specialised businesses, including three new customer businesses,
together with the e-transformation of our technology and operational
platforms, which involves the dismantling and replacement of old
systems and processes, and the development of several high-growth
businesses that are essential for our future success."

"The program is intended to be completed during this year and next,
and we expect to recover the majority of this expenditure by the
third year from annual productivity improvements and revenue
enhancements. These funds will be available to invest in our growth
businesses and to increase earnings per share.

"We have demonstrated that we can perform financially. The challenge
now is to shift from the more traditional ways of doing business, by
creating dedicated sales and service offices and branches, tailored
to the different needs of our customer segments. Today, we don't
believe that there are any competitors who really achieve this, and
this presents a unique opportunity for us.

"Standardised, cost effective technology will be one of the key
drivers of success in financial services. That means accelerating the
e-transformation of ANZ, by writing off old systems, embracing web
technology and speeding up the delivery of straight through

"The changes we will put in place over the next two years will allow
us to make our key businesses more valuable to our customers and our
shareholders, and provide new opportunities for our staff in existing
and in new growth businesses," Mr McFarlane said.

For media enquiries, contact:   For analyst enquiries, contact: 

Paul Edwards                    Philip Gentry 
Tel: 03-9273 6955 or            Tel: 03-9273 4185 or 
     0409-655 550 (mobile)           0411-125 474                
Email:        Email: 

ANZ's 2000 Annual Results are available on