Commonwealth Bank of Australia · ASX:CBA
Commonwealth Bank of Australia — UBS Conference 2004
24 slides from Commonwealth Bank of Australia's conference presentation, Jun 23, 2004
Slide 1: Critical Success Drivers
Critical Success Drivers Commonwealth Bank Stuart Grimshaw Group Executive, Investment and Insurance Services 23 June 2004 www.commbank.com.au 1
Slide 2: Disclaimer
Disclaimer The material that follows is a presentation of general background information about the Bank’s activities current at the date of the presentation, 23 June 2004. It is information given in summary form and does not purport to be complete. It is not intended to be relied upon as advice to i
Slide 3: Outline
Outline Investment and Insurance Services Our Business Model Our Critical Success Drivers The markets we operate in Life insurance Asset management Platforms Advice Conclusion 3
Slide 4: Outline
Outline Investment and Insurance Services Our Business Model Our Critical Success Drivers The markets we operate in Life insurance Asset management Platforms Advice Conclusion 4
Slide 5: Our business model involves competing across all elements of the value chain
Our business model involves competing across all elements of the value chain IIS products and services by value chain element Product Administration Advice/ Distribution Manufacturing Platforms Support Services Dealer group Direct General Insurance services • Research Master Trust • Compliance Bank
Slide 6: Our Competitive Advantages
Our Competitive Advantages Participation across all elements of the value chain Value Chain Capture all margins Flexible pricing Multi-channel strategy Distribution Mix International distribution capabilities Number 1 in Australian Retail Managed Funds Scale Number 1 in Life Insurance
Slide 7: Wealth Management Value Chain Margin Trends
Wealth Management Value Chain Margin Trends Illustrative of Funds Management Industry Product Administration Advice/ Customer Distribution Manufacturing Platforms Support Services Pays Revenue Margins 60 bps 60 bps 20 bps 60 bps 200 bps Margin Stable to Stable to Stable to Falling Falling Trends Inc
Slide 8: Outline
Outline Investment and Insurance Services Our Business Model Our Critical Success Drivers The markets we operate in Life insurance Asset management Platforms Advice Conclusion 8
Slide 9: We expect continued strong growth in the life insurance market
We expect continued strong growth in the life insurance market Life Insurance In Force Premiums (December 1990 – December 2003) Observations 4500 4000 Return to rational pricing 3500 Continued strong growth Risk In Force Premiums ($M) 3000 Market still under-insured 2500 Flight to security /
Slide 10: We are the market leader in life insurance in Australia
We are the market leader in life insurance in Australia Product Category Market Share Key Drivers of Success December 2003 Scale Competitive, rational pricing Disability 11.1% Income Product enhancements Integrated technology solutions Lump Sum 13.8% Emphasis on service improvement Group R
Slide 11: Outline
Outline Investment and Insurance Services Our Business Model Our Critical Success Drivers The markets we operate in Life insurance Asset management Platforms Advice Conclusion 11
Slide 12: The Australian managed funds industry has a history of strong growth
The Australian managed funds industry has a history of strong growth Total Funds Management Market ($m) 1991 to 2003 actuals, 2003 to 2013 forecasts Observations 1,600,000 Australia is the 10th largest asset management marketplace globally 1,400,000 1,200,000 Strong growth in managed funds drive
Slide 13: We perform well across our diversified product mix
We perform well across our diversified product mix Funds Under Management by Asset Sector Number 1 in Australian Retail Managed May 2004 Funds 100% = $101.5B Market leader in geared products Award winning products Leading masterfund Breadth of products Innovative alliances with boutique
Slide 14: Retention is a key priority for retail funds
Retention is a key priority for retail funds Net Funds Flow Market versus Commonwealth Bank Drivers December 2002 – December 2003 4.0 Staff changes 3.5 Research ratings 3.0 Correction of overweighting in Aussie Equities Net fund flows ($ billion) 2.5 2.0 Legacy business 1.5 1.0 Mitigation St
Slide 15: Our brand and customer service ratings continue to be strong
Our brand and customer service ratings continue to be strong Newspoll Survey – Fund Manager Preference November 2003 Who would you invest your money with? 50% Leading brand Colonial First State BT AMP AXA Merc/ING Perpetual 45% Recognised in the market for 40% customer service 35% Winner – NSW
Slide 16: Outline
Outline Investment and Insurance Services Our Business Model Our Critical Success Drivers The markets we operate in Life insurance Asset management Platforms Advice Conclusion 16
Slide 17: Platforms capture the majority of retail funds
Platforms capture the majority of retail funds Retail Market Flows Observations 1998 to 2003 actuals, 2004 to 2006 forecasts Platform success driven by: Adviser productivity 450 improvements 400 350 Greater choice for investors 300 and advisers $billion 250 More convenience 200 Creation of
Slide 18: We are well represented in the platform market
We are well represented in the platform market FirstChoice has been the fastest growing platform in the market since its launch two years ago Over $6 billion FUA (June 2004) Competitive pricing Award-winning service Recent enhancements offering more functionality and investment options N
Slide 19: Outline
Outline Investment and Insurance Services Our Business Model Our Critical Success Drivers The markets we operate in Life insurance Asset management Platforms Advice Conclusion 19
Slide 20: We are prepared for the challenges in financial planning
We are prepared for the challenges in financial planning Market observations Rapidly ageing population Inadequate savings to support retirement Inadequate protection of investor’s assets Access to product choice for investors and advisers Quality of advice Increasingly sophisticated inve
Slide 21: We will continue to invest in our advice channel
We will continue to invest in our advice channel Our focus is on enhancing our quality of advice, improving productivity and increasing total sales Multi-channel strategy Career development for advisers All channels are important – minimise risk and maximise outcome Leverage and realise Common
Slide 22: Outline
Outline Investment and Insurance Services Our Business Model Our Critical Success Drivers The markets we operate in Life insurance Asset management Platforms Advice Conclusion 22
Slide 23: Conclusion
Conclusion There is significant value in having an end to end value chain presence We are building on our leading position in investments and insurance manufacturing We are leading the market in our platform capabilities We are further strengthening and broadening our significant distributio
Slide 24: Commonwealth Bank
Commonwealth Bank Investment and Insurance Services 23 June 2004 www.commbank.com.au 24