Operating Expenses

Half Year to

Year to

Favourable/
(Unfavourable)
Change from

Restated ⁽³⁾

Sep 01
$m

Mar 01
$m

Sep 01
$m

Sep 00
$m

Sep 00
excluding
fx impac
%

Reconciliation to Statement of Financial Performance

On-Going Core Operations

Banking & Other Financial Services

Other operating expenses

Personnel expenses

1,463

1,413

2,876

2,763

(4)

(2)

Occupancy expenses

234

256

490

445

(10)

(7)

Communication, postage and stationery

210

197

407

368

(11)

(8)

General expenses

837

695

1,532

1,296

(18)

(11)

Total other operating expenses

2,744

2,561

5,305

4,872

(9)

(5)

Significant operating expenses

large

Total Banking & Other Financial Services

2,744

2,561

5,305

4,968

(7)

(3)

Wealth Management

Net increase/(decrease) in net policy

(1,109)

(209)

(1,318)

652

large

liabilities

Claims, administration and other expenses

956

884

1,840

738

large

Total other operating expenses

(153)

675

522

1,390

Significant operating expenses

108

large

Total Wealth Management

(153)

675

522

1,498

Total On-Going Core Operations

2,591

3,236

5,827

6,466

Non-Core and Disposed Operations

HomeSide US ^{(1) (3)}

3,464

952

4,416

318

large

Michigan National

271

485

Disposal of Michigan National

Cost of foreign operations sold

2,929

large

Other Non-Core Operations

Writedown of e-commerce investments

large

Vivid operating expenses

large

Total Non-Core and Disposed Operations

6,442

1,238

7,680

803

large

Group Eliminations⁽²⁾

(79)

(23)

(102)

(33)

large

Total Expenses Excluding Goodwill

8,954

4,451

13,405

7,236

(85)

(74)

Amortisation of goodwill

167

197

Total Expenses Including Goodwill

9,023

4,549

13,572

7,433

(83)

(71)

⁽¹⁾ Includes HomeSide significant items before tax of $3,937 million.
⁽²⁾ This is the first time the 'Group eliminations' line has been separately disclosed as this amount was previously eliminated within Banking & Other Financial Services. Comparative information has been restated to reflect the new methodolog
⁽³⁾ Comparatives have been restated.

Half Year to

Year to

Favourable/
(Unfavourable)
Change from

Restated ⁽¹⁾

Sep 01
$m

Mar 01
$m

Sep 01
$m

Sep 00
$m

Sep 00
excluding
fx impac
%

Group reconciliation by total expense category

Personnel Expenses

Salaries and related on costs

1,642

1,666

3,308

3,003

(10)

(6)

Other

250

201

451

398

(13)

(8)

Total Personnel Expenses

1,892

1,867

3,759

3,401

(11)

(6)

Occupancy Expenses

Rental on operating leases

148

129

277

234

(18)

(15)

Depreciation and amortisation

(8)

(4)

Other

110

118

228

201

(13)

(8)

Total Occupancy Expenses

301

287

588

512

(15)

(10)

General Expenses

Claims

408

282

690

248

large

Net increase/(decrease) in net policy

(1,109)

(209)

(1,318)

652

large

liabilities

Advertising and marketing

109

201

178

(13)

(11)

Charge to provide for non lending losses

large

Communications, postage and stationery

254

257

511

459

(11)

(6)

Depreciation and amortisation

155

144

299

254

(18)

(12)

Fees and commissions ⁽²⁾

258

264

522

141

large

Other expenses ⁽²⁾

544

673

1,217

1,152

(6)

(5)

Total General Expenses

629

1,563

2,192

3,119

Total Operating Expenses excluding significant items

2,822

3,717

6,539

7,032

Significant operating expenses

Provision for restructure

large

Provision for integration

108

large

Impairment loss on mortgage servicing rights

909

734

1,643

large

Total Operating Expenses

3,731

4,451

8,182

7,236

(13)

(7)

Significant non-operating expenses

Change in assumptions

1,436

large

Write off of goodwill

858

large

Cost of foreign operations sold

2,929

large

Total operating expenses excluding goodwill

8,954

4,451

13,405

7,236

(85)

(74)

Amortisation of Goodwill

167

197

Total Operating Expenses including Goodwill

9,023

4,549

13,572

7,433

(83)

(71)

⁽¹⁾ Comparatives have been restated.
(2) March 2001 comparatives have been restated to reflect the reclassification of fees and commissions relating to wealth management non-life subsidiaries from other to fees and commissions.

	As at			Change from
	Sep 01	Mar 01	Sep 00	Sep 00
Full Time Equivalent Employees

By Region
On-Going Core Operations
Australia ⁽¹⁾	23,264	23,065	23,561	(1)
Great Britain	10,953	10,712	10,767	2
Ireland	2,600	2,560	2,615	(1)
New Zealand	4,545	4,505	4,532	-
United States	143	139	141	1
Asia ⁽¹⁾	757	642	224	large

Total On-Going Core Operations	42,262	41,623	41,840	1


Non-Core and Disposed Operations
United States
HomeSide US	2,721	2,580	2,306	18
Michigan National	-	3,251	3,271	large

Total Non-Core and Disposed Operations	2,721	5,831	5,577	(51)

Total Full Time Equivalent Employees	44,983	47,454	47,417	(5)



By Line of Business
On-Going Core Operations
Business & Personal Financial Services ⁽²⁾	24,990	24,596	25,046	-
Wealth Management	4,229	4,077	3,850	10
Wholesale Financial Services	1,747	1,678	1,679	4
Specialist & Emerging Businesses	3,102	3,018	2,874	8
National Shared Services ⁽²⁾	6,881	6,937	7,063	(3)
Other^(2)(3)(4)	1,313	1,317	1,328	(1)

Total On-Going Core Operations	42,262	41,623	41,840	1


Non-Core and Disposed Operations
HomeSide	2,721	2,580	2,306	18
Michigan National	-	3,251	3,271	large

Total Non-Core and Disposed Operations	2,721	5,831	5,577	(51)

Total Full Time Equivalent Employees	44,983	47,454	47,417	(5)



Average Half Year Full Time Equivalent Employees	45,296	47,247	46,054	(2)

^{(1) The Wealth Management Asia operations, incorporating
full-time equivalent employees, previously reported as part of Wealth
Management^{Australia, are now incorporated within the
Asia results. Comparatives for the half year to March 2001 have been
restated.}
(2)}Comparatives have been restated to reflect the current organisation structure, such that HomeSide Australia activities are now classified within Banking & Other Financial Services (Business & Personal Financial Services, National Shared Services and Other).
⁽³⁾Comparatives at September 2000 have been restated to reflect the transfer of Asia Support Services from Other to Wholesale Financial Services, effective 1 October 2001.
⁽⁴⁾Include Corporate Centre functions.

In comparison to September 2000, FTE's on payroll have increased in core ongoing operations by 1% to 42,262 as at September 2001.

FTEs have increased in Wealth Management by 379 over the year. This included 157 FTEs transferred from Business & Personal Financial Services as part of the transfer of the general insurance operations in Great Britain to Wealth Management. In addition, 107 financial advisers were recruited into the National Personal Client Services distribution channel.

Specialist & Emerging Businesses has included increases of 228 FTE's largely due to strong client growth within Securities Services and in order to support the integration of new global Cards processing systems.

Growth in Wholesale Financial Services has seen the addition of 68 new revenue generating FTEs.

Efficiency gains and outsourcing within National Shared Services, primarily transaction services and information technology, has resulted in the reduction of 182 FTEs.

Restructure & Integration Provision
	Raised	Utilised	As at	Utilised	As at
	Sep 00	Sep 00	Sep 00	2000/01	Sep 01
	$m	$m	$m	$m	$m

Business & Personal Financial Services	84	-	84	30	54
Wholesale Financial Services	12	5	7	2	5
Wealth Management	108	31	77	53	24

Total Restructure and Integration Provision	204	36	168	85	83

Operating Expenses

Share price

NAB

NABHA