Half Year at a Glance

Profits

• Operating profit after tax for the March 2000 half of $1,573 million was 13.2% higher than the March 1999 half of $1,390 million, and 9.9% higher than the September 1999 half of $1,431 million.
• Operating profit attributable to ordinary shareholders of $1,480 million was 8.7% higher than the March 1999 half of $1,361 million, and was 6.8% higher than the September 1999 half of $1,386 million.
• International franchises contributed 49.9% of the Group's March 2000 half earnings.
• Underlying profit for the March 2000 half of $2,658 million was 15.1% up on the September 1999 half year of $2,309 million and 10.2% higher than the March 1999 half of $2,412 million.

Revenue

• Total revenue for the March 2000 half was $5,598 million, an increase of 5.8% over the March 1999 half and 4.9% higher than the previous half.
• Net interest income rose to $3,123 million, 3.1% higher than the September 1999 half and 2.8% higher than the March 1999 half reflecting strong growth in loans and advances.
• Net interest margin for the March 2000 half was 2.93% compared with 2.99% for the September 1999 half and 3.01% for the March 1999 half.
• Other operating income for the current half of $2,475 million was 7.2% higher than the previous half and 9.8% higher than the March 1999 half.
• Other operating income represents 44.2% of total income compared with 43.2% for the previous half and 42.6% for the March 1999 half.

Productivity

• Return on Assets was 1.07% compared with 1.09% for the previous half and steady on the March 1999 half.
• Employee numbers, measured on a full time equivalent (FTE) basis, decreased 1.9% during the March 2000 half and were 4% lower than a year earlier.
• Underlying profit per FTE employee for the March 2000 half was 17.4% higher than the September 1999 half and 14.7% higher than the March 1999 half.

Costs

• Costs to total assets fell to 1.99% during the March 2000 half. This compares with 2.18% for the March 1999 half and 2.3% for the September 1999 half.
• Cost to income ratio for the March 2000 half was 50.8%, a significant improvement on the September 1999 half of 54.7% and down from 52.5% for the March 1999 half. Excluding the impact of the new life insurance accounting standard, and interest income attributable to the issue of National Income Securities and Preference Shares from all periods, the cost to income ratio for the March 2000 half was 52% compared with the previous half of 55.2% and the March 1999 half of 52.8%.

Shareholder Value

Economic Profit
Economic profit for the March 2000 half was $794 million, based on a cost of capital of 11.5% (previously 10.5%) and franking credit imputation based on a tax rate of 34% (previously 36%).

The strong growth in cash earnings during the March 2000 half was offset by a higher cost of capital, an increase in capital employed, and lower imputed franking credits due to the change in the Australian tax rate.

On a comparable cost of capital basis, economic profit for the March 1999 half would have been $759 million and $748 million for the September 1999 half.

Economic profit represents the excess of cash earnings over the cost of capital employed in the business plus the value to shareholders of franking credits generated.

Earnings per Share
Basic earnings per share (attributable to ordinary shareholders) were 99.3 cents, 5.9% higher than the September 1999 half of 93.8 cents and 6.8% higher than the March 1999 half of 93 cents.

Cash earnings per share (earnings attributable to ordinary shareholders before goodwill amortisation) rose by 5% from 100.9 cents in the September 1999 half to 105.9 cents and are 6% higher than the March 1999 half of 99.9 cents.

Capital Structure
Tier 1 ratio of 7.72% was marginally lower than September 1999 of 7.78% and has increased from 6.51% a year earlier. The increase was due to the issue of National Income Securities in June 1999, retained earnings and dividend reinvestment.

Core Tier 1 (excluding the impact of preference shares and National Income Securities) was 6.49% compared with September 1999 of 6.42% and 6.14% for March 1999.

The total capital ratio at March 2000 was 9.98% compared with 10.34% at September 1999 and 9.23% at March 1999. The reduction in the March 2000 half is largely attributable to higher risk weighted assets.

Return on Equity
The Group's return on average ordinary shareholders' funds for the March 2000 half was 17.41% compared with 17.48% for the March 1999 half and 17.7% for the September 1999 half.

The current return was achieved on an increase in average ordinary shareholders' funds of 9% from $15.6 billion at March 1999 to $17 billion.