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Preliminary Final Report/Media Release/Financial Statements

Document date:  Thu 25 Oct 2001
Published:  Thu 25 Oct 2001 13:40:22
Document No:  182866
Document part:  I
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)

PERSONAL

PETER HAWKINS

Comprises the Metrobanking, Regionalbanking. Small to Medium Business 
and Wealth Management customer segment businesses, and Cards and 
Mortgages specialist product businesses, in Australia and New Zealand

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

Net interest income           1,111         2,196        1,985   
Other external operating        495           951          869 
 income                     
Net inter business unit fees     60           118          146     
Operating income              1,666         3,265        3,000
External operating expenses    (683)       (1,372)      (1,332)
Net inter business unit        (182)         (359)        (374) 
 expenses
Operating expenses             (865)       (1,731)      (1,706) 
Profit before debt              801         1,534        1,294  
 provision 
Provision for doubtful debts   (106)         (205)        (192)
Income tax expense and         (234)         (450)        (391)
 outside equity interests                                   
Net profit attributable to      461           879          711
 members of the Company
Net loans and advances       71,677        71,677       65,918  
 including acceptances
Other external assets         1,851         1,851          978  
External assets              73,528        73,528       66,896
Deposits and other           38,214        38,214       34,180  
 borrowings       
Other external liabilities    2,014         2,014        1,824     
External liabilities         40,228        40,228       36,004        

Net interest average margin   3.18%         3.20%        3.29%     
Return on assets              1.29%         1.25%        1.15% 
Return on risk weighted       2.24%         2.17%        1.98%     
assets      
Operating expenses to         51.5%         52.6%        56.6% 
 operating income
Operating expenses to         2.39%         2.44%        2.75% 
 average assets  

Net specific provisions       117            205          202  
Net specific provisions as    0.33%         0.30%        0.33%  
 a % of average net advances
Net non-accrual loans          72             72           69
Net non-accrual loans as a    0.10%         0.10%        0.10%
 % of net advances
Total employees              11,474        11,474       11,608     

Personal contributed $461 million (47%) to the Group's operating 
result for the half, a 10% increase over the March 2001 result.

The key factors were:

* net interest income growth, particularly driven by higher 
transaction volumes in Cards and Mortgages and growth in Small to 
Medium Business lending and deposits

* solid fee growth together with increased revenue from risk product 
sales in Wealth Management

* external expenses were tightly managed, reflecting significant unit
cost reductions from productivity improvements and the increased use
of lower cost electronic distribution channels. Staff numbers
increased slightly, however are expected to reduce going forward as
the Group focuses on end to end process re-engineering and
transaction migration

New momentum was developed in focussing on our customer needs with a
range of measures including initiatives to assist older Australians
and those in the community facing disadvantage. A first step has also
been made in addressing some of the protracted service problems
customers have with banks with the introduction of the ANZ Customer
Charter.


METROBANKING

ELIZABETH PROUST

Comprises specialised retail banking sales and servicing devoted to 
metropolitan customers. Also encompassing retail on-line banking 
services.
                               HALF         FULL       FULL
                               YEAR         YEAR       YEAR
                              SEP 01       SEP 01     SEP 00
                               $M            $M         $M
            
Net interest income            214          434         441 
Other external operating       122          234         228  
 income             
Net inter business unit        109          218         250   
 fees                 
Operating income               445          886         919 
External operating expenses   (211)        (436)       (447)
Net inter business unit        (80)        (154)       (152)
 expenses
Operating expenses            (291)        (590)       (599) 
Profit before debt provision   154          296         320 
Provision for doubtful debts   (3)          (5)         (4)   
Income tax expense and         (50)         (97)       (116)  
 outside equity interests
Net profit attributable to     101          194         200 
 members of the Company

Operating expenses to        65.4%         66.6%       65.2% 
 operating income
Net specific provisions        6             8           5
Net non-accrual loans          3             3           3
Total employees             4,300         4,300        4,478

Metrobanking is refocusing on the branch network as a strategic asset
while investing significantly in frontline platforms and staff
development as part of a commitment to improving customer service,
staff advocacy and sales excellence.

Metrobanking profit increased by 9% to $101 million in the second
half. Key features of the result were: 

* a 3% reduction in net interest income, with higher deposit volumes,
but lower deposit margins in a falling rate environment

* other external operating income increased by 9% due to higher
lending and transactional activity

* external operating expenses continue to decline based on cost
savings generated from efficiency gains

* inter business unit expenses increased due to higher technology
related charges

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

Two new customer accounts have been introduced to provide low cost
banking solutions for customers over 60, and Centrelink recipients
and health care cardholders. We have also developed the ANZ Customer
Charter to establish benchmarks for the provision of improved service
to customers.

B2C ECOMMERCE

Internet banking continues to grow strongly, with over 750,000
registered users in Australia and 170,000 in New Zealand.
Registration growth has been matched by transaction growth. Our
customers now conduct more funds transfers and BPAY payments over the
internet than by Phone Banking. Online product sales are also
increasing, for example, credit card applications have exceeded 3,000
per month.

The success of anz.com is illustrated by a higher proportion of 
ANZ's customers using Internet Banking than any other Australian 
Bank.  In the last three months the service has also been named 
Online Banker of the Year at the Personal Investor Magazine Awards 
for Excellence in Financial Services and Best Internet Bank in 
Australia and New Zealand by leading corporate finance magazine, 
Global Finance.

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