Impact of RBA Credit Card Scheme Reform

Document date:  Tue 27 Aug 2002
Published:  Tue 27 Aug 2002 17:37:33
Document No:  193870
Document part:  A
Market Flag:  Y
Classification:  Other 

AUSTRALIA AND NEW ZEALAND BANKING GROUP       2002-08-27  ASX-SIGNAL-G

HOMEX - Melbourne                                                     

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Following the release of a new interchange standard by the Reserve
Bank of Australia, ANZ today announced that the impact of reductions
in interchange revenue and recent increases in the cost of frequent
flyer points are likely to reduce ANZ's Australian credit card annual
after tax profit by approximately $40 million by the 2004 financial
year.

Implicit in the Reserve Bank's reforms is the intention to remove
certain costs from the credit card payments system, such as those
associated with loyalty schemes, and for these costs to be borne more
directly by cardholders.

ANZ believes the current competitive environment and its
responsibilities to its customers would not permit full recovery of
the shortfall. The estimated impact on net credit card profits
assumes ANZ will absorb about one third of the impact.

ANZ Managing Director Consumer Finance Mr Brian Hartzer said: "The
reduction in interchange announced by the Reserve Bank was
disappointing but now a reality.

"It takes Australian interchange levels to well below that of similar
developed markets, including the European Union, which recently set
interchange at 70 basis points.

"Credit card programs are already under pressure from recent
increases in the cost of frequent flyer points and the other costs of
reward schemes.

"The unfortunate result of the reduction in interchange and the
increasing cost of reward programs will be difficult but necessary
decisions in restructuring credit card programs. The changes will aim
to ensure that credit cards remain economically viable while
maintaining their value to customers," Mr Hartzer said.

For media enquiries, contact
Paul Edwards
HEAD OF GROUP MEDIA RELATIONS
Tel: 03-9273 6955 or 0409-655 550
Email: edwardp12@anz.com

For investor enquiries, contact:
Philip Gentry
HEAD OF INVESTOR RELATIONS
Tel: 03-9273 4185 or 0411-125474
Email: gentryp@anz.com