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Preliminary Final Report/Media Release/Financial Statements

Document date:  Thu 25 Oct 2001
Published:  Thu 25 Oct 2001 12:57:07
Document No:  182866
Document part:  J
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)

REGIONALBANKING
Alison Watkins

Provides a full range of banking services for consumer and small 
business customers in regional and rural communities

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

Net interest income                       180     362       363
Other external operating income            99     187       183
Net inter business unit fees               73     144       143
Operating income                          352     693       689
External operating expenses               (156)   (313)     (317)
Net inter business unit expenses          (59)   (113)     (110)
Operating expenses                       (215)   (426)     (427)
Profit before debt provision              137     267       262
Provision for doubtful debts               (9)    (18)      (18)
Income tax expense and outside
 equity interests                         (42)    (83)      (84)
Net profit attributable to members
 of the Company                            86     166       160

Operating expenses to operating income   61.1%   61.5%     62.0%
Net specific provisions                    10      18        21
Net non-accrual loans                      10      10        13
Total Employees                         3,134   3,134     3,308

Regionalbanking is taking steps to realise its vision to be the stand
out in regional bank. Priorities include improving the performance of
its strong branch network; growing revenue through the Regional Reach
program and strethening ANZ's agricultural offer.

Regionalbanking profit increased by 8% to $86 million in the second
half. Key features of the result were:

* net interest income declined 1% with the falling rate environment
adversely impacting the deposit portfolio

* other operating income increased as a result of seasonal gains in
lending fees and increased in transaction activity

* net inter business unit fees increased; fees received from higher
mortgage sales reflected the growth in the market and a rebound from
the impact of GST in the first half

* operating expenses were flat, with external cost savings offset by
higher inter business unit technology charges

* net specific provisions increased as a result of minor credit
deterioration

The moratorium on rural branch closures has been maintained and focus
on exploring creative solutions to meet the face to face banking
needs of the rural communities.

SMALL TO MEDIUM BUSINESS
Graham Hodges

Provides a full range of banking services for metropolitan based
small to medium businesses with turnover up to $10 million

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

Net interest income                       138      272       265
Other external operating income            31       62        63
Net inter business unit fees              (18)     (34)      (51)
Operating income                          151      300       277
External operating expenses               (49)    (101)     (106)
Net inter business unit expenses           (5)     (12)      (23)
Operating expenses                        (54)    (113)     (129)
Profit before debt provision               97      187       148
Provision for doubtful debts               (7)     (15)      (11)
Income tax expense and outside
 equity interests                         (29)     (57)      (49)
Net profit attributable to members
 of the Company                            61      115        88

Operating expenses to operating income   35.8%    37.7%     46.6%
Net specific provisions                    12       19        14
Net non-accrual loans                       7        7        14
Total employees                         1,089    1,089     1,107

Small to Medium Business profit increased by 13% to $61 million in
the second half. Key features of the result were:

* the 3% increase in net interest income reflected modest balance
sheet growth and stable margins, following a change in the mix of
lending products

* costs were reduced, notwithstanding initiatives to rebuild the
sales capabilities of staff

* the weakening economy led to increased net specific provisions,
although high risk loans were less than 2% of the portfolio at the
year end

Current initiatives in Small to Medium Business include building
straight-through processing in loan origination and servicing,
simplifying the credit process, delivering critical management MIS
and adding new customer delivery channels.

As part of a renewed focus on service to customers, two new business
management tools, ANZ Impact and 'runningmybusiness' will be launched
later in 2001. ANZ Impact is a web based cash flow modelling tool,
available on anz.com, which customers can use to better manage their
cash flow position. Runningmybusiness is a new 'portal' for small to
medium business, which offers in one convenient location a range of
banking and other business services regularly used by our customers.

WEALTH MANAGEMENT
Craig Coleman

Wealth Management delivers comprehensive financial advisory 
distribution services to high net worth customers, covering 
investment, risk, lending and banking

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

Net interest income                       71      142       130
Other external operating income           25       41        19
Net inter business unit fees              25       41        51
Operating income                         121      224       200
External operating expenses              (62)    (119)     (112)
Net inter business unit expenses          (9)     (18)      (16)
Operating expenses                       (71)    (137)     (128)
Profit before debt provision              50       87        72
Provision for doubtful debts              (1)      (2)       (4)
Income tax expense and outside
 equity interests                        (17)     (29)      (24)
Net profit attributable to members
 of the Company                           32       56        44

Operating expenses to operating income   58.7%    61.2%     64.0%
Net specific provisions                    -        1         4
Net non-accrual loans                      1        1         -
Total employees                          906      906       856

Wealth Management profit increased by 33% to $32 million in the
September half year. Key features of the result were:

* net interest income was flat overall, with volume and margin in
Australia offset by reductions in New Zealand

* other external income increased, due to growth in third party
investment products, and to the receipt of milestone shares from
E*Trade, which resulted in income of $3 million in the September half
year

* the increase in inter business unit fees resulted from higher
mortgage sales and a seasonal increase in customer investment before
the tax year end

* operating expenses increased by 8% due to investment in growth
initiatives, including an increase in financial planner numbers

Wealth Management has 216,000 customers with $36 billion in funds
under advice. Its customers are now serviced by 750 relationship and
specialised front line staff, organised into 41 ANZ Private Bank and
Financial Advisory practices across Australia and New Zealand.

Wealth Management's service is personalised but scalable, addresses
customers' total financial needs, and provides open access to the
best solutions available in the market. Momentum has been created in
better servicing our customers by reorganising around customer
service and developing new specialised products.

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