Preliminary Final Report

Document date:  Thu 26 Oct 2000
Published:  Thu 26 Oct 2000 11:57:39
Document No:  168995
Document part:  M
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)

CONTINUING OPERATIONS EXCLUDING ABNORMALS AND OPERATIONS OF SOLD
GRINDLAYS OPERATIONS

The pro-forma financial data below shows the Group results after
excluding the sold Grindlays and associated businesses, costs from
the sale and abnormal items disclosed in the abnormal note.

                                          2000       1999       MOVT
                                          $M         $M         %

Net interest income                       3,465      3,310       5%
Fee income                                1,727      1,552      11%
Other operating income                      617        601       3%

OPERATING INCOME                          5,809      5,463       6%
Operating expenses                       (3,026)    (3,000)      1%

OPERATING PROFIT BEFORE DEBT PROVISIONS   2,783      2,463      13%
Provision for doubtful debts               (440)      (427)      3%
Income tax expense                         (747)      (669)     12%
Outside equity interests                     (2)        (2)      - 

OPERATING PROFIT AFTER INCOME TAX         1,594      1,365      17%

Net interest average margin                2.76%      2.94%     N/A
Return on assets                           1.02%      0.97%     N/A
Return on risk weighted assets             1.35%      1.24%     N/A
Operating expenses to net operating
 income                                    51.9%      54.7%     N/A
Operating expenses to average assets       1.92%      2.13%     N/A

Net specific provisions                     337        349      -3%
Net specific provision as a % of
 average net advances                       0.3%       0.3%     N/A
Net non-accrual loans                       631        572      10%
Net non-accrual loans as a % of
 net advances                               0.5%       0.5%     N/A

Total employees (FTE's)                  23,134     24,330      -5%
Profit per average FTE ($)               68,217     54,273      26%
Assets per FTE ($M)                         7.4        5.9      25%

Total assets                            171,555    143,091      20%


The continuing operations of the Group showed a profit improvement of
17%, resulting from:

* higher net interest income, as volume increases compensated for
  lower margins

* strong growth in fee income

* steady costs adjusted for $11 million for EFTPOS NZ acquisition in
  June 2000 and $7 million in GST

Costs in 2001 will be adversely impacted by a full year of GST
(estimated at $50 million), goodwill amortisation and operating
expenses from the purchase of EFTPOS NZ (estimated at $36 million).


OPERATIONS OF SOLD BUSINESSES

                                2000        2000          1999   MOVT
                                $M          $M            $M      %
                                AT BALANCE  10 MONTHS/AT
                                DATE        COMPLETION

Net interest income                           336         345     -3%
Fee income                                    133         149    -11%
Other operating income                        106          75     41%
Operating income                              575         569      1%
Operating expenses                           (288)       (300)    -4%
Operating profit before 
 debt provisions                              287         269      7%
Provision for doubtful debts                  (62)        (83)   -25%
Income tax expense                           (116)        (67)    73%
Outside equity interests                        -          (4)  -100% 
Operating profit after 
 income tax                                   109         115     -5%
Net interest average margin                  3.33%       3.14%    n/a
Return on assets                             1.27%       1.13%    n/a
Return on risk weighted assets               1.57%       1.52%    n/a
Operating expenses to net 
 operating income                            50.0%       52.7%    n/a
Operating expenses to average 
 assets                                      3.35%       2.95%    n/a
Net specific provisions                        46         133    -65%
Net specific provision as a 
 % of average net advances                    0.8%        2.2%    n/a
Net non-accrual loans              68          95          85     12%
Net non-accrual loans as a 
 % of net advances                 n/a        1.6%        1.5%    n/a
Total employees                     -       5,162       5,841    -12%
Total assets                      912       9,530       9,710     -2%
Risk weighted assets              761       7,975       7,309      9%

On 31 July 2000, the Group sold ANZ Grindlays Bank Limited and its
international Private Banking operation to Standard Chartered PLC, a
United Kingdom registered bank, for $2.3 billion in cash, realising a
net profit of $404 million.

As part of the transaction, the Group provided Standard Chartered PLC
with indemnities on credit and litigation matters, including National
Housing Bank. Provision has been made for all potential claims under
the indemnities together with costs and tax liabilities arising on
the transaction.

The results shown reflect financial data for the 10 months to July
2000 compared with the full year for 1999. The underlying
improvements reflect the success of the change program put in place
over the last 18 months. Higher tax in part relates to the higher
pre-tax profit generated in the business, the revaluation of deferred
tax assets in the first half, and tax charges relating to the
repatriation of dividends to Australia.

The sale was a significant step in refocusing our business on
Australia, New Zealand and the Asia Pacific region, strengthened by
our Foreign Exchange, International Trade and Global Structured
Finance businesses around the world. The sale reduces the Group's
overall risk profile, with the economic loss provisioning in the sold
operations, representing 1.13% of net lending assets, compared to the
Group average of 0.39%.

ANZ will continue to maintain its foreign exchange and capital
markets presence in Asia, London and New York and its Global
Structured Finance business. In addition, as part of the Grindlays
sale, a co-operation agreement has been entered into with Standard
Chartered to service ANZ's international customers in India, the
Middle East and South Asia.

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