Peter Hodgson

Our Financial Performance

($m) 2006 2007 %
Income 422 315 34%
Operating Expenses (123) (95) 29%
Profit before Provisions 299 220 36%
Provisions (34) (24) 42%
Tax (18) (12) 50%
Profit after Tax 247 184 34%
Staff(FTE) 1,574 1,102 43%

In 2007, ANZ’s Partnerships businesses comprised our wealth management joint venture with Dutch based ING in ING Australia (INGA), our international banking partnerships across Asia, and our Private Bank business.

Our 40 year presence in Asia established ANZ as Australia’s leading bank in the region. With developing countries driving global economic growth, increasing ANZ’s position in Asia is a strategic priority.

We have established partnerships through investments in banks with established local franchises, to which we bring our specialist capabilities. During 2007 we invested in Malaysia’s AMMB Holdings Berhad, China’s Shanghai Rural Commercial Bank, Vietnam’s Saigon Securities Incorporation and Vientiane Commercial Bank in Laos.

We are also investing in our own branches in Asia to capitalise on links to Australia and New Zealand through trade, immigration and capital flows. We are establishing an Asia Pacific Division headed by Alex Thursby, who has joined us from Standard Chartered Bank. Total earnings from Asia delivered very high growth of 37% in 2007.

Our wealth management businesses and investments are also performing well. INGA has achieved very strong funds under management growth, is the market leader in new retail life risk business and has overcome its historical remediation issues. INGA is focused on growth, and earnings are up 27%.

The Private Bank earnings growth increased by 16%, which continues the strong franchise growth of our private banking business both in Australia and New Zealand as well as internationally.