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Preliminary Final Report/Media Release/Financial Statements

Document date:  Thu 25 Oct 2001
Published:  Thu 25 Oct 2001 11:26:09
Document No:  182866
Document part:  H
Market Flag:  Y
Classification:  Preliminary Final Report , Full Year Accounts , Dividend Record Date , Dividend Pay Date , Dividend Rate

AUSTRALIA AND NEW ZEALAND BANKING GROUP       2001-10-25  ASX-SIGNAL-G

HOMEX - Melbourne                                                     

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CHIEF FINANCIAL OFFICER'S REVIEW (CONTINUED)

BUSINESS SEGMENT PERFORMANCE

Under the umbrella of a common vision and over-arching strategy, ANZ 
is managed as three divisions, which covers a portfolio of 16 
specialist businesses. A description of each of these, and of 
division totals, together with analysis of results is contained on 
pages 11 to 32.

The Group from time to time modifies the segmentation of its 
businesses to enhance the focus on delivery of services to customers 
or specialised products. Prior period numbers are adjusted for such 
organisational changes to allow comparability.

Operating profit for each business is determined after service 
transfer pricing and equity standardisation.

                                   HALF       FULL        FULL
                                   YEAR       YEAR        YEAR
                                 SEP 01     SEP 01      SEP 00
                                     $M         $M          $M

PERSONAL
Metrobanking                        101        194         200
Regionalbanking                      86        166         160 
Small to Medium Business             61        115          88
Wealth Management                    32         56          44
Cards and ePayments                  65        120          81 
Mortgages                           116        228         138
Segment total                       461        879         711

CORPORATE
Corporate Banking                    67        131         117
Institutional Banking               105        194         141
Global Capital Markets               30         54          34
Global Foreign Exchange              43         83          66
Global Structured Finance            66        140         139
Global Transaction Services          70        135         105
Segment total                       381        737         602

INTERNATIONAL AND SUBSIDIARIES
Asset Finance                        52         99          90
Investment Management                41         75          70
Asia                                 32         63          19
Pacific                              26         47          41
Segment total                       151        284         220

Operating segments total            993      1,900       1,533

Operating segments total            993      1,900       1,533
CorporateCentre,
 Technology & Finance               (18)       (18)         64

Continuing businesses               975      1,882       1,597

Net prior period abnormals            -          -          44
Discontinued businesses               -        (12)        106

Net profit attributable to
 members of the Company             975      1,870       1,747

COMPILATION OF SEGMENT RESULTS

The Group uses service transfer pricing mechanisms to allocate 
services that are provided by central areas to each of its business 
units. The objective of service transfer pricing is to remove 
cross-subsidies between business units, and ensure each business 
accounts for the costs of the services uses. Transfer pricing 
arrangements are reviewed periodically. Changes in transfer pricing 
arrangements in current periods are, to the extent possible, 
reflected in prior period comparatives to assist comparability.

The profit and loss statement of each business unit includes net inter
business unit fees and net inter business unit expenses. This 
treatment is consistent with the Group's strategy of managing along 
specialist business lines. Net inter business unit fees includes 
intra-group receipts or payments for sales commissions. A product 
business (for example, Cards) will pay a distribution channel (for 
example, Metrobanking) for product sales. Both the payment and receipt
are shown as net inter business unit fees. Net inter business unit 
expenses consist of the charges made to business units for the 
provision of support services. Examples of services provided include 
technology and payments, risk management, finance and human resources 
management. Both payments by business units and receipts by service 
providers are shown as net inter business unit expenses.

The results for each division (Personal, Corporate and International &
Subsidiaries) include the business units and a divisional support 
unit. The services provided by the divisional support unit are 
allocated to the business units. As a result of this allocation, the 
sum of individual profit and loss line items of the business units 
does not equal the corresponding line item in the profit and loss of 
the division.

Equity standardised profit is determined by eliminating the impact of 
earnings on each business unit's book capital and attributing earnings
on the business unit's economic capital. This enhances comparability 
of business unit performance. Changes to the methodology for 
allocating capital to business units will result, from time to time, 
in restatements of prior period comparatives. Geographic results are 
not equity standardised.

PERSONAL SEGMENTS

Establishing specialised Personal customer business units has resulted
in a transfer of customers between businesses to improve the alignment
of customer banking requirements with the services offered by the 
business. This movement of customers has affected the results of the 
Metrobanking, Regionalbanking, Small to Medium Business and Wealth 
Management customer businesses. Prior period results have been 
restated to give meaningful comparison.

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