Westpac Banking Corporation · ASX:WBC
Westpac Banking — Merger or Acquisition (May 2008)
23 slides from Westpac Banking's merger presentation, May 14, 2008
Slide 1: St.George and Westpac Agree to merge May 2008
St.George and Westpac Agree to merge May 2008
Slide 2: Creating Australia’s leading financial institution
Proposed St.George / Westpac merger – May 2008 2 Creating Australia’s leading financial institution • A compelling Australian financial services merger • Terms and conditions • Strategic rationale - Operating model - Customers brands and distribution - Market share • Compelling value for both St.Geo
Slide 3: Compelling Australian financial services merger
Proposed St.George / Westpac merger – May 2008 3 Compelling Australian financial services merger • Proposal to merge St.George and Westpac • All scrip consideration, exchange ratio of 1.31 Westpac shares for each St.George share • Extensive distribution preserving existing customer relationships: -
Slide 4: Terms and conditions
Proposed St.George / Westpac merger – May 2008 4 Terms and conditions Subject to regulatory consent from Federal Treasurer, APRA, ACCC Satisfactory completion of documentation and due diligence Scheme subject to St.George shareholder approval Key Conditions Scheme of arrangement voted on by St.Georg
Slide 5: The strategic rationale – it’s a growth story
Proposed St.George / Westpac merger – May 2008 5 The strategic rationale – it’s a growth story • Significant value to St.George and Westpac shareholders • A strong suite of brands benefiting from enhanced scale • An institution focused on Australian/New Zealand growth opportunities • Strong strategi
Slide 6: Proposed operating model – capitalising on the best of both
Proposed St.George / Westpac merger – May 2008 6 Proposed operating model – capitalising on the best of both Retaining distinctive St.George and Westpac distribution for consumer and business with separate management and dedicated CEOs Common product manufacture and processing to improve scale of re
Slide 7: It’s all about customers, brands and distribution
Proposed St.George / Westpac merger – May 2008 7 It’s all about customers, brands and distribution • Extensive distribution network providing immediate benefits for all customers including reciprocal ATM usage • Unique suite of strong customer brands across banking, wealth and insurance • Each brand
Slide 8: Distribution – increased customer access
Proposed St.George / Westpac merger – May 2008 8 Distribution – increased customer access 104 9 Retail representation Westpac St.George WA - No.1 Position 9 4 Retail representation Westpac BankSA NT - No.1 position 291 213 Retail representation Westpac St.George NSW/ACT - No.1 Position 164 28 Retail
Slide 9: Strong lending market share position
Proposed St.George / Westpac merger – May 2008 9 Strong lending market share position1 Total lending market share (%) Housing lending market share (%) Corporate lending market share (%) 1. Source: Credit Suisse, Bank Market Shares 1 May 2008 – Based on March 2008 APRA Data Credit cards market share
Slide 10: Strong deposit market share
Proposed St.George / Westpac merger – May 2008 10 Strong deposit market share1 Household deposits market share (%) Non-household deposits market share (%) 1. Source: Credit Suisse, Bank Market Shares 1 May 2008 – Based on March 2008 APRA Data 11.1 29.0 13.9 13.8 9.9 23.7 0 5 10 15 20 25 30 35 ANZ CB
Slide 11: Capitalising on the superannuation/wealth opportunity
Proposed St.George / Westpac merger – May 2008 11 Capitalising on the superannuation/wealth opportunity • Strengthen wealth capability across the value chain • Capitalise on two of the sector’s fastest growing Wrap platforms • Combine insurance/LMI into a single stronger entity • Access to a broader
Slide 12: Sustainability and community champions
Proposed St.George / Westpac merger – May 2008 12 Sustainability and community champions St.George Westpac Common values on sustainability Leader in customer satisfaction Regional/mutual heritage Local support to local communities “we strive to play a positive role in the community by supporting cha
Slide 13: Combining two strong employment brands
Proposed St.George / Westpac merger – May 2008 13 Combining two strong employment brands • Strong and complementary employee cultures enhancing merger attractiveness: - Customer focused and relationship based cultures - Affinity and pride in brand and history - Strong employment brands attracting ta
Slide 14: Compelling financial value
Proposed St.George / Westpac merger – May 2008 14 Compelling financial value • Cash EPS accretive for Westpac shareholders within 3 years and strong accretion thereafter • Strongly positive NPV for both Westpac and St.George shareholders • Combined entity will: - Benefit from significant revenue opp
Slide 15: Revenue opportunities and cost synergies
Proposed St.George / Westpac merger – May 2008 15 Revenue opportunities and cost synergies • Broader distribution base • Benefits from expanded capability in wealth, insurance and institutional banking • Sharing best practice in products and service models across networks e.g. - St.George middle mar
Slide 16: Enhancing the combined balance sheet
Proposed St.George / Westpac merger – May 2008 16 Enhancing the combined balance sheet • Benefit from experience of Basel II accreditation and learnings • Excellent combined asset quality • Application of enhanced risk analytics and disciplines to combined portfolio • Continuing strong franking capa
Slide 17: Current environment supports strong institutions
Proposed St.George / Westpac merger – May 2008 17 Current environment supports strong institutions • Current financial markets dislocation has changed the funding environment • ‘AA’ rated banks well placed versus ‘A’ rated banks given: - Material pricing differential likely to persist - Ability to o
Slide 18: Managing the risks
Proposed St.George / Westpac merger – May 2008 18 Managing the risks Mitigants Risk • Commencing dialogue with regulatory and government authorities • Confident of satisfying regulatory authorities given nature of transaction Government/ Regulatory • Plan to establish an independent team comprising
Slide 19: Clear governance principles and processes
Proposed St.George / Westpac merger – May 2008 19 Clear governance principles and processes • Appropriate arrangements for Westpac CEO in place: - Westpac CEO’s shares in St.George have been fully disclosed to Westpac Board - Westpac CEO does not vote on Westpac Board decisions on the transaction -
Slide 20: Transaction timeline
Proposed St.George / Westpac merger – May 2008 20 Transaction timeline Announce Merger Planning Agreement – 13 May 2008 Completion of documentation and due diligence Merger Implementation Agreement Preparation of scheme documentation Scheme meeting Scheme effective Regulatory approvals (ACCC, APRA,
Slide 21: Summary
Proposed St.George / Westpac merger – May 2008 21 Summary • Agreed merger of St.George and Westpac to create Australia’s leading financial services institution • Strong value enhancement for both St.George and Westpac shareholders • Merger brings together two complementary organisations building on
Slide 22: Investor relations – contact us
Proposed St.George / Westpac merger – May 2008 22 Investor relations – contact us Andrew Bowden Head of Investor Relations +61 2 8253 4008 andrewbowden@westpac.com.au Hugh Devine Senior Manager, Investor Relations +612 8253 1047 hdevine@westpac.com.au Leigh Short Senior Manager, Investor Relations +
Slide 23: Disclaimer
Proposed St.George / Westpac merger – May 2008 23 Disclaimer The material contained in this presentation is intended to be general background information on Westpac Banking Corporation and its activities. The information is supplied in summary form and is therefore not necessarily complete. Also, it