Global Foreign Exchange
Chris CooperGlobal Head of Foreign Exchange
Australia and New Zealand Banking Group Limited 20 July 2001
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The pre-eminent Australian FX bank
• Financial performance
• Low risk/volatility
• Leveraging our core capabilities into new growth opportunities
• Goals for Global Foreign Exchange
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The foreign exchange market
• “Globally FX volumes are falling despite earlier optimism. Daily volumes are trending ~ US$1tr per day
• US (corporate) markets are warming to the notion of currency hedging
• Portfolio investment flows are growing with investors seeking diversified holdings
• Retail FX is a growth sector
• Margins are falling and will fall further
• FX is a growth industry?
– For spot definitely no, for derivatives, eCommerce, risk advisory, retail, transition currencies definitely yes.”
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104
120
105
80
90
100
110
120
130
140
Mar-00 Sep-00 Mar-01
Operating Income
3234
40
20
25
30
35
40
45Profit After Tax
Mar-00 Sep-00 Mar-01
197
199199
190
195
200
205
210
47.5
48.6
50.0
45
46
47
48
49
50
51
52
53
The business continues to perform strongly…
Mar-00 Sep-00 Mar-01 Mar-00 Sep-00 Mar-01
FTE Cost Income
25% Growth
15% Growth
$m $m
%
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Spot Trading
Forwards Trading
Derivatives Trading
Sales
Commodities
…with earnings based on a diversified portfolio & recurring revenues...
Spot Trading
Forwards Trading
Derivatives Trading
Sales
1995 Portfolio 2001 Portfolio
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Source: Group Market Risk
Daily Value at Risk Trends
Limit US$5.2m
Avg use US$710k
Dec 99 Mar 010
1
2
3
4
5
6
Daily V
aR
…and an extremely low risk profile
Market Risk
• Core risk centres
• Risk managed under global books
• VaR levels reflect highly correlated risk
Credit Risk
• Primary world markets
• Growth for clients
• Liquidity to mitigate risk
• Use of netting
US$m
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We are the leading foreign exchange bank in Australia
League Tables
• Australia #1 FX bank of the Year (Asia Money 2001)
• Best FX Bank Australia (Greenwich)
• Top 7 Asian FX House (Asia Money)
• Japan #1 FX Bank (AUD/NZD) seven consecutive years
eCommerce
• anz.com/fx online =7th in the world (Euro money)
• Joined global portals Atriax and Currenex
• Chair bank, Atriax Bank Board
• Deepest client penetration in Australasia with user numbers topping 850
• 25% of all corporate deals online (market norm 5%)
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By leveraging our core capabilities with differentiated products and service...
Capability Differentiation
• Vanilla trading (spot & forward)
• FX & Commodity derivatives
• Commodity structuring
• Geographic sales force
• eCommerce
• Skilled work force
• Commodity capability
• Consultative Risk Mgmt
• G4 currency bridging service
X
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…we have developed additional growth initiatives...
All linked to
eTransformation
Investors
Improve ANZ product penetration to this sector
Small Business
Focusing on delivering commodity solutions to consumer manufacturers
Commodities
Focus on deeper penetration of global investors
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• Defend & grow our global franchise in core currencies across 32 countries
• Further diversify revenues through developing the commodities business
• Expand client base, especially investors
• Leverage first-mover advantage in eCommerce through:
– Global penetration of anz.com/FXOnline– Additional derivatives capability– Straight through processing– Risk and portfolio analysis– White labeling– Global Portals
…which underpin our business strategy
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Summary
• Strong performance with low volatility
• New initiatives will further diversify the revenue base
• eTransformation will have a real impact on our business
• Winning the war for talent is a critical management task
Goals• Double digit
earnings growth
• Maintain our leading position
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Copy of presentation available on
www.anz.com
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