Skip to content

Preliminary Final Report/Media Release/Financial Statements

Document date:  Thu 25 Oct 2001
Published:  Thu 25 Oct 2001 12:19:30
Document No:  182866
Document part:  M
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                                                     

+++++++++++++++++++++++++
CHIEF FINANCIAL OFFICER'S REVIEW (CONTINUED)

INVESTMENT BANK
GRAHAME MILLER

ANZ Investment Bank, comprising Global Markets, Global Foreign 
Exchange, and Global Structured Finance is headed by Grahame Miller

GLOBAL CAPITAL MARKETS
DAVID HORNERY

Provision of origination, underwriting, structuring, risk 
management, advice and sale of credit and derivative products.

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

Net interest income                                 41     76     53
Other operating income                              44     84     80
Net inter business unit fees                         5     10      6
Operating income                                    90    170    139
External operating expenses                        (21)   (40)   (37)
Net inter business unit expenses                   (22)   (46)   (47)
Operating expenses                                 (43)   (86)   (84)
Profit before debt provision                        47     84     55
Provision for doubtful debts                        (2)    (3)    (3)
Income tax expense and outside equity interests    (15)   (27)   (18)
Net profit attibutable to members of the Company    30     54     34

Operating expenses to operating income            47.8%  50.6%  60.4%
Net specific provisions                              1      1      -
Total employees                                    176    176    183

Global Capital Markets (GCM) derives and manages its revenue from the
mark-to-market of its trading portfolios less holding costs and
receipt of fee income. For disclosure purposes, the business
separately identifies net interest income, notwithstanding that
performance is best assessed on a total revenue basis.

GCM's profit increased by 25% to $30 million in the second half. Key 
features of the result were:

* broad based revenue growth with increased revenue contributions 
from all business segments, strong client penetration and continued 
product innovation

* a strong focus on cost management, notwithstanding expenditure on 
system and product development

GCM continues to consolidate market leadership positions across the 
Australian and New Zealand credit, derivative and primary markets, as 
evidenced by the following:

* International Financing Review - ANZ ranked 1 in A$ loan syndication
* Australian Financial Surveys   - ANZ ranked 1 in Commercial Paper 
                                   (Face Value Issuance)
* AsiaRisk                       - ANZ ranked 1 in Interest Rate 
                                   Derivatives
* East Coles                     - ANZ ranked 2 in A$ debt issues

GLOBAL FOREIGN EXCHANGE
CHRIS COOPER

Provision of foreign exchange and commodity trading and sales related 
services to corporate and institutional clients globally.

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

Net interest income                                 (1)    (6)     2
Other operating income                             123    248    209
Net inter business unit fees                         1      1     (2)
Operating income                                   123    243    209
External operating expenses                        (24)   (48)   (42)
Net inter business unit expenses                   (31)   (64)   (61)
Operating expenses                                 (55)  (112)  (103)
Profit before debt provision                        68    131    106
Provision for doubtful debts                        (3)    (6)    (4)
Income tax expense and outside equity interests    (22)   (42)   (36)
Net profit attibutable to members of the Company    43     83     66

Operating expenses to operating income            44.7%  46.1%  49.3%
Net specific provisions                             56     57      -
Net non-accrual loans                               77     77      -
Total employees                                    197    197    199

Global Foreign Exchange's (GFX's) profit increased by 8% to $43 
million in the second half. Key features of the result were:

* higher operating income flowing from increased sales and trading 
revenue
* lower costs resulting from further back office efficiencies
* the non-accrual loan and related specific provision booked in the 
second half relate to the close out of foreign exchange deals in 
respect of one high profile customer

GFX has maintained its leading market position, being rated:

* Australia number 1 FX Bank of the year (Asia Money 2001)
* Japan number 1 FX Bank (AUD/NZD), seven consecutive years

GFX's investment in anz.com/fxonline continues to support our
customer growth strategy and efficiency gains, and has recorded
strong growth in the second half, with over 1100 users now registered
on the system. The number of transactions written via
anz.com/fxonline exceeded 30,000 (23% growth half on half), with
transaction values in excess of $4 billion (39% growth). The
application is now used in 10 countries outside Australia, with
installations in seven new sites in the second half.

GLOBAL STRUCTURED FINANCE AND OTHER FINANCIAL SERVICES
GORDON BRANSTON

Provision of arranging, underwriting and advisory services, financial 
engineering solutions, the funding of large structured debt 
transactions and offshore institutional banking services. This 
business also includes Investment Bank back office functions.


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

Net interest income                                 76    127    107
Other operating income                              76    174    154
Net inter business unit fees                        (8)   (15)    (7)
Operating income                                   144    286    254
External operating expenses                       (118)  (235)  (231)
Net inter business unit expenses                    52    104    113
Operating expenses                                 (66)  (131)  (118)
Profit before debt provision                        78    155    136
Provision for doubtful debts                       (23)   (46)   (35)
Income tax expense and outside equity interests     11     31     38
Net profit attibutable to members of the Company    66    140    139

Operating expenses to operating income            45.8%  45.8%  46.5%
Net specific provisions                              3     23    (35)
Net non-accrual loans                              119    119     32
Total employees                                    704    704    741

The profit of Global Structured Finance and Other Financial Services 
(GSF) decreased by 11% to $66 million in the second half.

Key features of the result were:

* a significant increase of $25 million in net interest income, 
largely due to lower funding costs associated with the run off of 
equity swaps

* a decline in other external income of $22 million due to a lower 
volume of structuring fees and dividends related to equity swaps. This
was partly offset by good non-lending fee growth in the second half 

* the rationalisation of back office functions and centralisation of 
activities contributed to the lower employee levels in the current 
half. However, external operating expenses increased by $1 million, 
reflecting the strengthening of specialist capabilities and higher 
premises costs

* a re-balancing of the portfolio resulted in a reduction in the level
of tax structured transactions in the second half

The increase in non accrual loans in the second half relates 
principally to two offshore exposures. Nevertheless, in a difficult 
market GSF has maintained a sound asset portfolio distribution, with 
little asset quality deterioration during the period.

Strategic initiatives focus on the selective use of the balance sheet 
to leverage growth in fee income. Balance sheet growth is directed 
towards high quality assets and risk mitigated structured project 
finance activity, as well as selective growth in high quality 
corporate client loan assets.

The costs of the Investment Bank back office functions, which are 
managed within GSF, are fully recovered from each investment bank line
of business.

MORE TO FOLLOW