Preliminary Final Report

Document date:  Thu 26 Oct 2000
Published:  Thu 26 Oct 2000 12:05:28
Document No:  168995
Document part:  O
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)

GEOGRAPHIC SEGMENT - AUSTRALIA


                                         2000         1999       MOVT
                                           $M           $M          %

Net interest income                     2,623        2,457         7%
Fee income                              1,268        1,135        12%
Other operating income                    465          417        12%
Operating income                        4,356        4,009         9%
Operating expenses                     (2,226)      (2,167)        3%
Operating profit 
 before debt provisions                 2,130        1,842        16%
Provision for doubtful debts             (349)        (288)       21%
Income tax expense                       (581)        (512)       13%
Operating profit after income tax 
 before abnormal items                  1,200        1,042        15%
Net abnormal profit after tax 
 (refer page 34)                           90            -        N/A
Operating profit after income tax and 
 abnormal items                         1,290        1,042        24% 
Ratios exclude abnormal items
Net interest average margin              2.95%        3.18%       N/A
Return on ordinary book equity           19.8%        18.5%       N/A
Return on risk weighted assets           1.39%        1.33%       N/A
Operating expenses to operating income   50.9%        53.8%       N/A
Operating expenses to average assets     1.89%        2.12%       N/A
Net specific provision                    238          167        43%
Net specific provision as a % of 
 average net advances                     0.2%         0.2%       N/A
Net non-accrual loans                     393          345        14%
Net non-accrual loans 
 as a % of net advances                   0.4%         0.4%       N/A
Total employees                        16,570       17,146        -3%
Lending growth                           16.0%        12.6%       N/A
Total assets                          127,306      107,551        18%
Risk weighted assets                   93,809       80,462        17%

Profit after tax excluding abnormals in Australia increased 15% over
the previous year.

The main influences on this result were:

* increased net interest income with the 16% increased lending
  volumes (particularly mortgages) offset by a contraction in margins
  due to:

  - margin pressure and the lag in passing on the impact of higher
    interest rates to mortgage and cards customers reducing net 
    interest by $93 million

  - competitive pressures on margins in Esanda; and

  - a significant interest recovery in September 1999

* good growth in non-lending fee income in Personal and Corporate
  Financial Services, due to transaction volume growth and revised fee
  structures

offset by

* higher expenses resulting from expansion in eCommerce, an
  additional $7 million irrecoverable GST, more focused marketing 
  costs and brand advertising, higher software amortisation, profit 
  share and higher restructuring costs

* increased economic loss provision charge reflecting strong Cards
  and Mortgage volume growth and an increase in loss rates on the non
  mortgage lending book in Personal Financial Services

* growth in specific provisions was caused by volume growth in Cards
  and higher than expected losses on Personal Loans

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