ANZ Financial Performance Overview
SECTION 3
Monolines win, but returns more volatile -diversification reduces risk
Independent analysis* has found that
monoline specialists create greater
returns than generalists.
ANZ's response has been to create a
portfolio of specialist businesses. Whilst
the returns from individual business units
within the portfolio have exhibited the
volatility typical of monoline specialists,
volatility is reduced for the portfolio as a
whole.
Average ROE
%
1998-2002
25
20
15.7
15
10
5
0
Generalists
A portfolio of specialist businesses
reduces volatility and brings:
30
27.6
Responsiveness - we believe that
speed, flexibility and expert
knowledge will prevail over large
scale generalists
25
20
An Entrepreneurial approach,
which encourages innovation yet
brings with it accountability and
ownership from business
management.
The portfolio model is strengthened by
ensuring that governance, risk
management and group oversight are
centrally controlled.
*Source Boston Consulting Group
15
10
5
17
Cards
%
30
Average Volatility
(standard deviation in TSR)
1998-2002
23.6
20.8
25
20
15
10.6
10
Specialists
Generalists
Standard Deviation in NPAT Growth#
Sep 00 to Sep 03
Mortgages
18.1
Corporate
7.6
2.8
ANZ
Group
Specialists
ANZView entire presentation