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Chairman`s & CEO`s Address to Shareholders

Document date:  Mon 21 Dec 1998
Published:  Mon 21 Dec 1998 00:00:00
Document No:  144153
Document part:  F
Market Flag:  N

HOMEX - Melbourne                                                     


Now, turning once again to customers, making dealing with ANZ an
enjoyable experience is a worthy aim. But I know what some of you are
thinking. We are customers. We know the truth. And it is not always
enjoyable, often the reverse. So exactly what is the situation, and
what is the Bank going to do about it?

It is important to recognise that much of what is good, doesn't
feature very strongly in the media. This year saw ANZ recognised as
the "Bank of the Year" in Australia, by Personal Investment Magazine
for the second year running. This is a good start, but it is only a
start. The early feedback we are getting on the Branch of the Future
programme has generally been positive.

Today we are announcing a major branch transformation, initially of
50 branches, but subsequently to all major sites. This will create a
new retail environment for all of our customers, which will be
customer friendly as well as attractive. As well as a new look and
more attentive service, there will be a new Premier Suite in these
branches which will provide an exclusive service for our premier
customers, such as many of our shareholders present today. Our
initial pilot has been successfully launched in Launceston, and by
March we will extend the pilot to Melbourne (South Yarra, St. Kilda
and Elsternwick), to Sydney and to Auckland.

Our Private Banking business in Australia has been acclaimed as the
best of its kind, and we are expanding our penetration of wealthier
individuals through personal referrals from existing customers.

We are now recognising the value of our shareholders as customers.
This year, we have added new benefits exclusive to Australian and New
Zealand shareholders, including a fee waiver on Access accounts, a
lower mortgage interest rate on new home loans and higher saving
account deposit rates. There are also special offers for Cards, Funds
Management and Stockbroking. All of you will be eligible for these
benefits. New shareholders, however will need to hold a minimum of
500 shares to qualify. Details and conditions are in the brochure and
we hope you make use of the benefits now being offered. Please
remember to take the Shareholder Privilege card with you when you go
to your branch.

Our alternative channels are also developing well. Activity in our
ATMs and call centres has grown exponentially. We now take over
100,000 calls per day, 24 hours per day, 7 days a week.

We believe e-commerce and the internet will be a very important new
customer channel in the future. That is why we are placing a great
deal of emphasis on building this capability. Progress in this is
good. We already have mortgage, credit card and small business
applications up and running, and will be adding further applications
during the year. To move faster, last week we announced that we have
teamed up with America Online and with Yahoo, to provide internet and
e-commerce services in Australia and New Zealand.

In business banking we generally get very positive feedback, with ANZ
consistently rated as the best provider of banking services to
medium-sized corporations.

The same applies in the Treasury area. ANZ was again voted by
customers as the number one Foreign Exchange bank and, in a separate
poll, also number 1 for Derivatives and Risk Management products. In
this area, we recently introduced a new product called FX ONLINE
which enables customers to do direct dealing with us through their
own computer terminals. This system is the first of its kind in

So having made some progress, we nevertheless freely admit it is not
nearly enough. Personally, I have now become very aware of the depth
of feeling in the community against banks. This has been a major
surprise to me. This sentiment is felt more deeply, and expressed
more strongly here in Australia, than I have ever experienced
anywhere else. So what has gone wrong? As bankers, we have clearly
done something wrong in the past and sadly continue to do so, as we
read each day in the press, ANZ is no exception. The main issues
appear to arise as a consequence of banks' withdrawal from rural and
urban communities, from the perceived unfairness of fees and charges,
and shortfalls in the levels of customer attention and service. By
degree there is truth in all of these.

In partial defence, banks are easy targets for politicians and the
press, and given our code of confidentiality about customers'
affairs, we cannot always answer back. But we cannot blame others for
the problem. We must do something about it.

At ANZ we are taking responsibility to make a difference here,
recognising it will be a long journey and that we are starting from
behind. Above all, we need to demonstrate that we like dealing with
customers, that we care about them, that we listen to them, that we
will deliver what we say we will deliver, and that our charges
provide value for money.

Increasingly at ANZ, we are conscious of our obligations to the
communities that we operate in. Banking and community interests go
hand in hand. Accordingly in July we announced our decision that we
would not further withdraw from any community and would seek ways to
provide new facilities in communities where we had a former presence.
Today we can announce that we have a pilot of our new agency model in
operation at Eudunda in South Australia, and we will extend this to
30 additional rural communities next year. We are also in discussion
with other organisations as to how we can take community banking

I believe banks in Australia have heard the message, and are
beginning to respond. We have heard, and we will respond. Let me
assure our 150,000 shareholders that we are very serious about this,
and I aim to demonstrate progress each time I am in front of you. Our
future as a business depends on it.


Thank you John. Let me now turn to the outlook for the Group.

In 1999 we expect annual real growth in Australia to be around
2-2.5%; for New Zealand to emerge from its recession and grow by
1-2%; and for continuing difficult times in Asia, although steadying
after the sharp contraction in 1998.

For our Bank the year ahead should show progress in increasing profit
and, in comparison to the previous year, this is expected to be
mainly reflected in the second half. Provided there is a reasonable
external environment we expect the following year, that is the year
to September 2000, to more fully reflect the results of many of the
actions which are now being taken.

I would like to reiterate to shareholders that the Bank is being
managed for performance both for this year but also for the medium
term. With a strengthening in our management team, considerable
progress in improving our technology, improving efficiency, a
reduction in our risk profile, a sound capitalisation, and increasing
attention to servicing our customers with a sales orientated culture,
we are well positioned to improve shareholder value.