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Preliminary Final Report

Document date:  Thu 26 Oct 2000
Published:  Thu 26 Oct 2000 10:47:25
Document No:  168995
Document part:  I
Market Flag:  Y
Classification:  Preliminary Final Report , Dividend Record Date , Dividend Pay Date , Dividend Rate

AUSTRALIA & NEW ZEALAND BANKING GROUP LI      2000-10-26  ASX-SIGNAL-G

HOMEX - Melbourne                                                     

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CHIEF FINANCIAL OFFICER'S REVIEW (CONTINUED)

BUSINESS SEGMENT - PERSONAL FINANCIAL SERVICES
                                       2000        1999         MOVT
                                         $M          $M            %

Net interest income                   1,999       1,875           7%
Fee income                              960         843          14%
Other operating income                  191         167          14%

OPERATING INCOME                      3,150       2,885           9%
Operating expenses                   (1,749)     (1,784)         -2%

OPERATING PROFIT 
 BEFORE DEBT PROVISIONS               1,401       1,101          27%
Provision for doubtful debts           (171)       (123)         39%
Income tax expense                     (458)       (362)         27%

OPERATING PROFIT AFTER INCOME TAX       772         616          25%

OPERATING PROFIT AFTER INCOME TAX
 Personal Banking                       673         526          28%
 Funds Management                        99          90          10%
                                        772         616          25%

Net interest average margin            3.15%       3.57%         N/A
Return on assets                       1.16%       1.12%         N/A
Return on risk weighted assets         2.14%       1.99%         N/A
Operating expenses 
 to operating income                   55.2%       61.6%         N/A
Operating expenses 
 to average assets                     2.62%       3.23%         N/A

Net specific provisions                 201          96        large
Net specific provision 
 as a % of average net advances         0.3%        0.2%         N/A
Net non-accrual loans                    68          84         -19%
Net non-accrual loans 
 as a % of net advances                 0.1%        0.2%         N/A

Total employees                      12,235      12,926          -5%

Total assets                         71,673      59,709          20%


Personal Financial Services contributed $772 million (45%) to the
Group's operating result. This represents a 25% increase over the
September 1999 result.

The key factors driving the result of Personal Financial Services
were strong growth in:

* mortgage lending with total market share increasing from 13.7% to
  15% in Australia and ANZ's share of originations increasing to 26%.
  ANZ was rated Home Loan Bank of the Year

* Cards transaction volumes with share of credit card spend of
  approximately 27% in Australia 

* deposits with market share increasing to 18% in Australia

* fees through enhanced pricing and collections together with 
  increased customer numbers and penetration pushing up non-mortgage 
  lending, card and transaction volumes

* other income with increased revenue from E*Trade and the sale of 
  risk products 

offset by 

* lower margins on mortgage lending and cards, particularly in the
  first half year as cash rates increased. This margin decrease 
  reduced net interest income by $109 million although significant 
  transaction volume growth across Personal Financial Services 
  mitigated much of the effect of this margin reduction.

A 2% reduction in total expenses, reflecting significant unit cost
reductions from productivity improvement, increased use of lower cost
electronic distribution channels and the continuing implementation of
efficiency initiatives assisted profit growth. 

Increased specific provisions arose from volume growth in Cards and
Mortgages and significant changes in the Personal Loan portfolio.
Lowered credit scoring cut offs and a strong marketing push for
Personal Loans resulted in higher than expected specific provisions.
Given the nature of this product, with its high margin, the net
product loss was small.


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