| 2003 has been a year of considerable progress as we continued to grow our core banking and wealth management businesses for the benefit of shareholders. The Group has delivered an increased dividend to shareholders for more than 10 consecutive years. The latest increase in dividend follows solid growth in earnings, despite business conditions varying widely in the countries in which we operate. This progress was made against a backdrop of economic uncertainty and generally low world economic growth, especially in the United States. Increased earnings were achieved while maintaining sound asset quality and after absorbing additional expenses, mainly associated with European staff pensions and compliance issues, as well as adverse exchange rate movements in the United Kingdom. The Group's total assets increased to $397 billion driven by growth in lending, particularly in housing lending which rose 16.0%. The continuation of the share buy-back program reduced ordinary equity by $1.6 billion during the year. We intend to continue to buy back shares equal to the number issued under the Group's dividend re-investment and staff share and option schemes. The National remains the only bank in the Asia Pacific region with a long-term AA rating and the Group's capital ratios remain strong. We continued our focus on productivity gains through our Positioning for Growth program and at the same time invested for future growth. Due to the geographic spread of our operations, the Group has a unique position that creates the opportunity to grow organically by leveraging skills and capabilities across its different businesses. We are the only Australian financial services company ranked amongst the 30 most profitable financial services organisations in the world (Fortune magazine, July 2003). Our income is earned from retail banking businesses in Australia, New Zealand, the United Kingdom and Ireland. We have operations in Asia and the United States as a result of our Corporate & Institutional Banking business. Wealth Management also has a presence in Asia. This diversity provides organic growth opportunities not available to our domestic peers. We have developed a vibrant organic growth strategy to ensure we can deliver long-term value to shareholders regardless of the outcome of rationalisation or changes within the industries in which we operate. From time to time opportunities to grow through acquisition also arise. We have a patient and disciplined approach to assessing these situations. It is in the interest of shareholders that the Group keeps its options open to participate in strategic changes in the financial services industry. This year we increased our focus on corporate social responsibility. Building trusted relationships with all stakeholders is a central part of our strategic agenda. We are committed to considering each stakeholder in a balanced way as we develop our business. We have included a Stakeholder Scorecard as part of this report. Another significant advance in this area was the inclusion of the National in the Dow Jones Sustainability Index. To be included, a company must be in the top 10% of companies rated on a range of sustainability criteria. Our inclusion in the index is recognition of our economic, environmental and social performance and management, and puts us among global sustainability leaders within the banking sector. Corporate governance also remains an area of significant community interest. The Group is committed to proper corporate governance. Maintaining investor confidence in the standards of corporate behaviour is a foundation stone for attracting and retaining capital. During the year we had the opportunity to add to the depth of experience of the Board and announced two new directors. British banker, John Stewart, was appointed Managing Director of National Australia Group Europe and joined the Board of the National. John was previously Deputy Chief Executive of Barclays PLC and will bring valuable international banking experience and insights into European banking to the Group. The second appointment to the Board was John Thorn in October 2003. John was previously the managing partner of PricewaterhouseCoopers (PwC) in Australia. John's 37-year career with PwC included more than 20 years as a partner. His experience includes audit and accounting practice and standards, client audit committees, corporate governance, business advisory, mergers and acquisitions and risk management. I welcome both appointments and appreciate their contributions to date. I would like to thank all directors for their efforts this year in assisting the Group to report a strong performance. I would also like to congratulate our management and staff and thank them for their efforts to grow our business and deliver an excellent result for shareholders. We are focused on continued growth in shareholder value for the future. | 
