ANZ Financial Performance Overview

SECTION 5 Mortgages -strong growth drives performance • . . • • The momentum in ANZ's mortgages business in Australia and New Zealand continued during the year delivering a 9% increase in NPAT, with FUM increasing 19.9% on prior year. The cost of increased staffing required to maintain service levels in light of volume growth and the record level of internal commissions paid to the Network, as result of improved sales, slightly subdued the result. Strong growth was recorded in the Australian network and broker channels with 25% FUM increase on prior year. The New Zealand business has also delivered improved growth in the September 2003 quarter, following a period of flat or reducing volumes in 2002. Further development of the ANZ mortgage sales force capability is a priority for the 2004 year. Focus will continue to be on improving the capability of our mortgage specialists through sales, product and credit training, along with new sales tools. Additional specialist roles are being created in the branch network, and a significant increase in mobile managers is underway. A customer retention program also remains a key priority with dedicated Mortgage Customer Service and Retention teams. The teams proactively follow-up retention "triggers" and new sales opportunities. In conjunction with the network, a 25% increase in renewal activity has also been delivered during the year. A number of Business Improvement initiatives are well advanced and will continue to be a key focus in 2004. Specific initiatives include streamlining and automating business processes, the full rollout of the electronic lodgment of broker applications and enhanced behavioural credit scoring for existing customers. Monthly % $m 1,500 1,200 900 Renewed momentum in the branch network Australian Network & Broker sales Network Broker 600 300 0 Sep-01 Mar-02 Sep-02 Mar-03 Sep-03 Prepayment Rate - Owner Occupied and Investment Loans* 2.5% 2.0% 1.5% 1.0% 0.5% Residential Investment Owner Occupied 0.0% Sep-01 Mar-02 Sep-02 Mar-03 Sep-03 * Australia (excluding Origin) 42 ANZ

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