Consumer Finance Jenny Fagg Managing Director Consumer Finance Wednesday, September 19 2007

1

Consumer Finance Overview

Consumer cards

Contribution to Personal Division NPAT

• FUM +$6b • 20% market share

(1H07)

Consumer Finance

Personal Loans • FUM +$1.5b • 8% market share

Merchant Services

21%

• Credit Turnover +$29b pa • 16% market share

Commercial Cards • Spend +$3b • 13% market share

ATMs • >400 increase in ATMs in F07 to 2215

Australian Call Centre • Best Australian call centre 3 years in a row(1) • Over 40 million contacts, 11 million consultant calls per year

(1). International Customer Professionals Association awards

2

Consumer Finance has consistently been one of the Group’s best performing businesses … Solid FUM growth…

…with strong growth in revenue…

~12%

~11% ~14%

CAGR 5.1

($b) 4.2

~12%

Cards Under Accrual adjustment

708

($m) 597

38 670

2001

2003

2001

Aug-07

…and consistently strong profit growth (NPAT) ~16%

2003

1H07 annualised

Consumer Credit Cards NPAT has been growing double system Cards NPAT volume growth 3 Year Cards Under Accrual adjustment

~18%

CAGR 22% System Growth(1) 3 Year CAGR 11%

Cards Under Accrual adjustment

149

($m) 119

27 122

2001

2003

1H07 annualised

2003

2004

2005

Note - 2001 and 2003 AGAAP, 2006 AIFRS, change in provisioning impact of NPAT CAGR not material (1) APRA Credit Cards outstandings

2006

1H07 annualised

3

Our goals have been consistent since 2004 2004 commitments Grow profit at 20% or double system volume growth Lead in our chosen markets and servicing segments

Highest customer satisfaction of the majors Recognised as the employer of choice Respected by the community

Achieved

Objectives

99

Grow revenue Micro-manage the credit risk/reward trade-off

9

Lead with innovative and convenient product / service / channel delivery for key segments

99 99 99

Highest customer satisfaction Exceptional and simple service Strong retention of profitable customers Best in class Call Centre Best people in the business High staff engagement Lead the industry in responsible lending and financial literacy Give back to the community eg. volunteering days 4

The strategic approach is consistent: A repeatable formula & core capabilities Our approach “Repeatable formula to rollout a series of initiatives into adjacent customer / market segments”

Our core capabilities “Success relies on all capabilities working together”

5 specialised businesses: Consumer Cards, Merchants, Commercial Cards, Personal Loans, ATMs

Brand: Convenient, Simple and responsible

Increase Profit from existing customers

Attract New Customers

Retain profitable customers

Expand into adjacent segments

Specialised customer service centres: ACC and Customer Services & Collections

Brand: Convenient and Simple

Apply Production Management disciplines

Reengineer Lower Cost to Serve

Maximise Strategic Value

Expand Capability into Adjacencies

Information Management incl. Risk Management

Right products and right interactions to right customers via right channels

Strategic Agility

Adaptation & innovation of leading products

People & Culture

Attract, develop & retain the best people

Customer Experience

Convenient, simple & responsible service & distribution

5

How do we win on strategy

People and culture

Customer experience

Brand

Simply, the Best Consumer Finance Business in Australia

Strategic agility

Information, risk management

6

Our brand position seeks to differentiate on what is important to customers:

Brand

• Simple, convenient and responsible banking • Innovative products • Exceptional service at key moments of truth

ANZ Cards Whatever It Takes… Security Low Rate

Premium

Rewards

Visa Debit

Help you take control of card debt

Enhance your lifestyle

Real value from every day spending

24/7 access to your own money

Low Fee

Platinum

Frequent Flyer

Prepaid

Let you enjoy the now

The exclusivity you deserve

Reward you with more life experiences

Reward friends and family

+

Service

7

Innovation combined with first mover advantage has driven success …

First chip card in Australasia

1996…

2001

First frequent flyer rewards card

First major bank low rate card

2002

First 60 second online application and online CLIs, BTs, Verified by Visa

2003

First bank with 24x7 call centre + customer charter

2004

2005

Strategic agility

First major bank Visa Debit

2006

First bank to launch Design My Card

First bank to partner with 3 party scheme First bank to launch 0% BTs

First major bank gift cards

8

Low Rate products and Balance Transfers contribute to growth

Strategic agility

0% BT offers enable ANZ to capture larger interest-earning balances

•

•

12 months of testing led to targeted marketing and BT offers

350

Int. Earning Balance greater after 6 months

300 250 200 150

0% BT Non 0% BT

100 50

1st mover advantage in BT market while rate of growth in non profitable segment continues to increase

0

BT is not permanently embedded in card products used as a strategic marketing offering

6.0%

0

2

4

6 8 10 12 Months on Book

14

16

18

Low rate customer credit quality improved (Bad customers* as % of total accounts)

5.0%

Pre 0% BT

4.0%

Bad rate

•

Low rate products are profitable and trending up Index

•

(Interest Earning Balance per Account)

3.0%

Post 0% BT

2.0% 1.0% 0.0% 1

2

3

4

5

6

7

8

9

10 11 12

Months on Book *Bad customers are defined as 90+ days past due, including write-offs

9

Strategic agility supported by smart analytics • Significant investment in customer data management & market research: 1. Qualitative Research • Significant resource allocated to development & maintenance of customer information tools • Comprehensive modeling and analysis of expected and actual campaign and portfolio performance

2. Testing • Extensive market research undertaken to understand customer attitudes/behaviors • Extensive active research, typically below the line offers

Information, risk mgt

Case Study: A recent product launch supports the notion that price is not the only lever Take up rate % 3.5

+2% premium rate +3% premium rate

3.0 2.5 2.0 1.5 1.0 0.5 0.0 6-12 mths

>12 mths

Inactive customer

Customer Type

Outcome: Higher rate product had higher take up rate. All other features comparable 10

Controlled growth in unsecured portfolios has delivered expected risk outcomes

Information, risk mgt

Credit Cards growth moving in line with system Pre-06 – lending growth well above system, with positive credit environment* 22% 28%

16%

Market share continues to track at ~ 20%* 25.3%

10% 24%

4%

22.8% 21.0%

-2% Jul-05

Nov-05

Mar-06

20%

Jul-06

22.1% 20.2%

20.0%

16% 15.7%

Last 12 months - pre-emptive steps slowing credit growth to around system*

14.9%

12% Jul05

14%

Nov05

Mar06

Jul06

Nov06

Mar07

Jul07

10%

ANZ credit growth influenced by current outlook, selective Credit Policy tightening and marketing investment

6% 2% -2% Jul-06

Nov-06

ANZ

Mar-07

Jul-07

Peer 1

* Source: APRA monthly data, 12 month growth

Peer 2

Peer 3

System

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Cards and Personal Loans: Credit quality and losses in line with expectations

With credit card loss rates increasing as low rate balances ‘season’… Portfolio by Vintage

Greater acquisition of proprietary cards % Acquisition growth by cards product 100%

2%

80%

46%

60% 40%

27%

20%

3% 57%

5%

8%

38%

30%

40%

37%

24%

25%

17%

19%

22%

1H06

2H06

1H07

2H07^

0%

Loyalty

Proprietary

Low Rate*

Commercial Cards

Information, risk mgt

YR 4+

Loss rates by vintage (year 1 = 100)

600

March 2006

YR 1

16%

500

65%

8%

400 300

YR 3

March 2007

200

YR 4+

100 0

YR 2

11%

11%

YR 1 YR 2

15%

YR1

YR2

Low Rate*

No material adverse trends in underlying arrears rates

YR3

Proprietary

YR4+

64%

9%

Loyalty

YR 3

Personal Loans Australia arrears still in good shape

(>60 day arrears to outstandings)

1.8%

5.0%

1.5%

4.0%

1.2%

3.0%

0.9% 0.6%

2.0%

0.3%

1.0%

0.0%

0.0% Jan-03

Jan-04

Jan-05

Jan-06

Jan-07

Low Rate

Loyalty

Proprietary

Portfolio

Low Rate includes White Label **includes Annual Fees ^ as at end August 2007

Sep-

M ar -

Sep-

M ar -

Sep-

M ar -

Sep-

M ar -

03

04

04

05

05

06

06

07

>90 Days

>60 Days

12

Continually delivering above peers on product and service excellence is key ANZ Consumer Cards remains at top of other majors in customer satisfaction

Customer experience

Award winning customer service capabilities

Score 8.5

8.0

7.5

7.0

ANZ

Bank 1

Bank 2

Bank 3

6.5 May-01 May-02 May-03 May-04 May-05 May-06 May-07 Source: Intuitive Solutions

Source:International Customer Professionals Association awards

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At the forefront of Responsible Lending and committed to Financial Literacy Customer Charter

•

Customer experience

Public benchmark for service to our customers

Responsible Lending

• First to introduce Responsible Lending Charter • Better at credit assessment and at identifying and assisting customers in difficulty • Giving customers tools to manage money better

Financial Literacy and Inclusion

• We continue to invest in community programs and work with community partners aimed at improving the financial literacy of Australians • Independent adult financial education program delivered by financial counsellors and community educators • A financial inclusion program for Indigenous communities • Aims to build financial literacy, budgeting, bill paying and savings skills • Delivered by trained local Indigenous people

Progress Loans

• Tailored to the needs of people on low incomes currently using ‘payday lenders’ and other fringe credit providers 14

A strong emphasis on people, lead by a highly engaged management team ANZ Consumer Finance employee value proposition

People and culture

Most engaged workforce of major Australian companies 2006 ANZ Staff engagement results

40%

Financial Services Benchmark 51% 60% ANZ 60%

25% Be the Best Market Leader, Deliver Results, Dynamic, Alive, Informed, Achieve

Serious Zone

Destructive Zone

0%

Indifferent Zone

Consumer Cards Mgt 79%

High Performance/ Best Employer 100% Zone

Be Inspired Career, Leadership, Culture, Environment, Balance

Be Responsible Customer, Community, Diversity

Measures: Clear industry leadership in: • Staff engagement • Customer satisfaction – best of the majors • Community initiatives - responsible lending, financial literacy

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