ANZ Financial Performance Overview

SECTION 4 Margins down, primarily due to yield curve and mix effect Interest Margins Net interest margin contracted by 10bp yoy: Net interest income in Treasury fell by $45 million as a result of run off of the existing portfolio and flat yield curves. This represented 3bp. The interest benefit from low interest savings accounts and non-interest bearing balances reduced as the rate at which they were invested reduced, representing 3bp. • The funding cost associated with unrealised trading gains resulting from the appreciating AUD represented 3bp, although this was offset in trading income (half on half) 5.00 4.79 4.50 4.22 4.18 3.93 3.82 3.82 3.84 4.00 3.87 3.50 3.14 2.96 2.99 2.83 2.78 3.00 2.86 2.78 2.82 2.71 2.50 2.76 2.78 2.75 2.79 2.71 2.64 Funding and changed asset mix contributed 5bp 2.00 Margin Drivers 1.36 1.3 1.50 1.25 1.28 1.30 1.33 2.77 (3) Lower mismatch income in Treasury (3) Lower earnings on low & zero interest deposits (3) 1.00 1.25 1.22 1.19 1.10 1.10 1.10 0.50 (5) 3 2.67 Funding derivative cash flows 1 Funding Lower & asset interest mix foregone FX revenue hedges Mar-01 Sep-01 Mar-02 Sep-02 Mar-03 Sep-03 Corp & Small Bus IB - Mortgages Asset Fin Personal Group 2002 2003 25 25 ANZ

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