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Chairman`s & CEO`s Addresses to Shareholders at AGM

Document date:  Wed 21 Jan 1998
Published:  Wed 21 Jan 1998 00:00:00
Document No:  134200
Document part:  B
Market Flag:  N

HOMEX - Melbourne                                                     


1997 was another good year for ANZ. A comprehensive review of our 
activities for the year is contained in the Annual Report which has 
been sent to shareholders.  I would like to highlight certain key 

I am particularly pleased that the annual dividend was able to be 
increased by 14% to 48 and was fully franked.

The underlying profit grew by 17% and this increase was well spread 
across Australia and out international operations.

We achieved asset growth of 8% and maintained excellent asset quality 
with the level of non accrual loans and specific provisions both 
falling.  Nevertheless, we decided to move to an approach to 
provisioning for doubtful debts that recognises that loan losses would
normally be higher than current levels across the economic cycle.

The total doubtful debt charge of $287 million after tax was based on 
the average charge implied in our portfolio risk management models.  
We believe that time will show the wisdom of this approach.

We also took a $417 million restructuring charge to cover current and 
future redundancy and related restructuring costs.  This reflects the 
level of change underway in the organisation.  Some $142 million of 
this was spent last year and the remainder is a provision related to 
identified costs under the ANZ Global program which is aimed at 
achieving further cost reductions.

With the level of change taking place it has not been an easy year for
staff.  That they have been able to handle this while continuing to 
build the business and also win awards such as "Bank of the Year" and 
"Best Provider of Foreign Exchange" is a tribute to their 
professionalism and dedication.

I would like to comment on four important matters; namely, changes in 
senior management, technology, our international operations and the 
increasing competitive environment in banking.


Firstly to management.  All aspects of banking and financial services 
are undergoing rapid and very considerable change.  At ANZ, we intend 
to be at the forefront, which means having the right people and 
strong, effective leadership.

We have strengthened the management team with the appointment of 
senior executives from outside the bank who have a broad range of 

Mr John McFarlane, the new Chief executive Officer, comes to ANZ with 
some 22 years experience in banking and a strong international 
banking experience with two leading international banks.  He had 
been an Executive Director at Standard Chartered Bank where his 
responsibilities included oversight of its operations in emerging 
markets as well as investment banking strategy.  Prior to that John 
had spent 18 years with Citibank where he became the first UK born 
head of its United Kingdom operations.  In 1995 he was awarded the 
OBE for services to the finance industry.

Other senior management appointments include:

Dr Peter Jonson who heads up ANZ Funds Management having previously 
been CEO of Norwich Australia.

Mr David Alrey who has been running our New Zealand operations, and 
will now head the global Private Bank, was previously CEO of the Bank 
of Melbourne.

Dr Murray Horn who joined us last September having previously been the
the Permanent Secretary of the New Zealand Treasury will be the 
country head in New Zealand.

Ms Elizabeth Proust who heads up the Human Resources function had been
Secretary of the Victorian Department of Premier and Cabinet.

Mr Davis Boyles will take up the new position as head of our global 
technology and operations functions.  He comes to ANZ from American 
Express and Bank of America and Mr Larry Crawford who will head up the
branch distribution network comes from First Bank Systems of the 
United States.

These people join other top executives such as John Ries, who is an 
executive director; Peter Hawkins, who has been promoted to Global 
Head of Personal Banking; and Peter Marriott, who has been promoted to
Chief Financial Officer to make what we believe is a first rate 
management team to work with John McFarlane.


Developments in banking and technology cannot be separated.  It is an 
area that is receiving great attention and apart from the on-going 
improvements required to our technology there is the special problem 
of the Year 2000.  The potential disruption to the business that may 
eventuate with the date change from 1999 to 2000 is a problem which 
ANZ faces, along with all other users of computer systems.  It is 
particularly important for financial organisations and no company can 
be completely certain that it is on top of this issue.

We do know that all our systems have been analysed and work is 
underway to develop, implement, and test the required changes.

Full systems testing of our internal applications is scheduled to be 
completed by December 1998.  The potential risk to the Group from 
vendors and customers not adequately managing this issue, is also 
receiving detailed attention.

The Board has required management to report on the Year 2000 issue at 
each Board meeting.  It involves a major programme and the capital and
recurrent cost to this bank is likely to be of the order of $200