Westpac Banking Corporation · ASX:WBC
Westpac Banking — Investor Presentation (March 2016)
35 slides from Westpac Banking's investor presentation, Mar 24, 2016
Slide 1: Westpac Consumer Bank and Business Bank Update
For personal use only Westpac Banking Corporation ABN 33 007 457 141 WESTPAC CONSUMER BANK AND BUSINESS BANK UPDATE 24 March 2016 All metrics in this presentation relate to the Consumer Bank or Business Bank divisions of Westpac Banking Corporation unless otherwise stated. Financial data is in A$ an
Slide 2: Our five strategic priorities
Our five strategic priorities For personal use only The Service Revolution Performance Service Digital Targeted Workforce Discipline Leadership Transformation Growth Revolution Strategic Priorities Region’s One of the Best World’s 21st Building new Talent Performing Great Century Growth Factory Bank
Slide 3: New structure drives accountability & clarity
New structure drives accountability & clarity For personal use only Consumer Business Institutional BT Financial New Bank Bank Bank Group Zealand George Frazis David Lindberg Lyn Cobley Brad Cooper David McLean • Unique portfolio of brands • Consistent performance metrics • Clear accountability for
Slide 4: Consumer Bank
For personal use only CONSUMER BANK George Frazis Chief Executive
Slide 5: Westpac's Consumer Bank is well positioned to grow
Westpac’s Consumer Bank is well positioned to grow For personal use only Consumer Bank starts from a position of strength Retail banking is attractive but some industry challenges Executing a clear, service-based strategy Led by an experienced management team Positioned for quality growth 5 | Consum
Slide 6: Consumer Bank overview
Consumer Bank overview For personal use only 30 September 2015 $7bn 8.4m ~9,100 revenue customers employees 34% of Group revenue 1 in every 3 Australians 26% of Group employees $321bn $168bn 1,108 loans deposits branches Market share1,2 23% Market share1,3 23% 2nd largest network 1 Represents Westpa
Slide 7: Consumer Bank division
Consumer Bank division For personal use only Distribution network Third Party Distribution Consumer Bank balance sheet 30 Sept 2015 Mix of Australian balance sheet 30 Sept 2015 Lending ($bn) Deposits ($bn) Mortgages ($bn) Other consumer lending ($bn) 9 43 13 9 55 4 308 308 125 13 Mortgages Consumer
Slide 8: Operating environment supportive
Operating environment supportive For personal use only Annual population Australian 350k growth over the last four years1 2.8% GDP Growth 2 market continues to be attractive Housing credit Household deposit 7.5% growth3 9.0% growth4 5.8% Unemployment rate 5 1.9% Sydney rental vacancy rate 6 Risk/ret
Slide 9: Strong housing fundamentals
Strong housing fundamentals For personal use only Population vs dwelling stock (ann avg change ‘000)1 Increase in mortgage interest rate buffers (%) population dwelling stock* Westpac SVR inc package discount (%) 360 * net of demolitions – implied by Census data; 9 Westpac minimum assessment ('floor
Slide 10: Consumer Bank well placed
Consumer Bank well placed For personal use only Good momentum Sound cross sell Strong franchise, satisfaction & lower complaints Products held per customer3,4 Customer Satisfaction (%)3,5 Housing system multiple1 Dec 2015 – 6MMA Dec 2015 – 6MMA 1.3 3.0 3.1 83.8 84.3 82.8 2.8 81.6 1.0 2.7 0.9 0.8 0.8
Slide 11: Looking ahead – industry challenges and opportunities
Looking ahead – industry challenges and opportunities For personal use only Regulatory and market change • Capital, liquidity and cost of funds • Credit cards • Impairments Customer and digital change • Customer behaviour • Digitisation • Product and process simplification 11 | Consumer Bank and Bus
Slide 12: Strategy focused on priorities
Strategy focused on 5 priorities For personal use only Examples • Multi-brand reaches a broader customer set New customers • Clear priority segments established • Everyday banking service focus • Immediate top-up assessment and approval and borrowing capacity for a new home; Wonder Home loans • Fast
Slide 13: Continuous transformation through day drops
Continuous transformation through 90 day drops… For personal use only 1Q16 2Q16 New • 10 min onboarding with a simple online • Open account in branch in 3 minutes so customers process for new transaction accounts customers walk out working Home • Wonder for home owners available for all • Digital se
Slide 14: …delivering results
…delivering results For personal use only Attract Deepen Simplify Automate Proof of Walk out - enhancing balance customers’ knowledge of xxxxx working xxxxx requests their property options Instant call Easy centre switching access via mobile banking 14 | Consumer Bank and Business Bank Update I 24 M
Slide 15: Experienced leadership team
Experienced leadership team For personal use only Distribution heads Bernadette Inglis Ross Miller Scott Tanner Nick Reade Martine Jager Group GM GM St.George Retail Chief Executive Chief Executive Chief Executive RAMS & Westpac Retail & Premium Banking Bank of Melbourne BankSA Chief Marketing Offic
Slide 16: Summary
Summary For personal use only New structure embedded and delivering Operating environment continues to be supportive of sound returns Five strategic priorities – each with detailed plans and deliverables Well positioned to capture significant opportunities 16 | Consumer Bank and Business Bank Update
Slide 17: Business Bank
For personal use only BUSINESS BANK David Lindberg Chief Executive
Slide 18: Westpac Business Bank is strongly positioned
Westpac Business Bank is strongly positioned For personal use only A scale business, starting from a position of strength Good operating momentum Investments beginning to deliver Four clear strategic priorities Business is focused on delivering 18 | Consumer Bank and Business Bank Update I 24 March
Slide 19: New operating structure: accountability & opportunity
New operating structure: accountability & opportunity For personal use only Placeholder Placeholder Brands title here Distribution businesses1 Functions title here Westpac Commercial Westpac SME Product • 17,000 commercial • 550,000 SME and micro connections businesses Digital • 3,000 agri connectio
Slide 20: A valuable, scale business – starting from a position of strength
A valuable, scale business – starting from a position of strength For personal use only As at 30 September 2015 $5bn ~3,000 1st MFI1 revenue bankers 23.5% MFI share1 24% of Group revenue $146bn $102bn lending #1 NPS2 deposits Mortgages $55bn Business lending $83bn Specialist consumer $8bn 1 Main fin
Slide 21: Recent operating performance: Good momentum
Recent operating performance: Good momentum For personal use only • Good momentum across • Deposit to loan ratio lending and deposits improving • Sound pipeline growth • More diversity in new lending – less commercial property Growth Strength • Stressed assets at low levels Service • Revenue per ban
Slide 22: Recent operating performance
Recent operating performance For personal use only Good growth in SME More diverse growth Growth skewed to NSW Total loans ($) New lending % of total % Movement in business loan balances (by State) January Non-commercial property 2016 year to date Commercial property FY14 FY15 70% 88% 30% 12% SME To
Slide 23: New capabilities gaining traction
New capabilities gaining traction For personal use only Digital for customers Payments Digital for bankers Market leading merchant terminal Simplified origination for fast lending decisions Westpac Live with Activate/Unlock (instant additional account opening) Enhanced video conferencing and product
Slide 24: New capabilities – Merchant terminals
New capabilities – Merchant terminals For personal use only From To • Stationary, hardwired terminal • 90,000 wireless & portable terminals rolled out • Separate contactless payments device • Integrated contactless payments • Small black and white screen • China UnionPay & direct currency conversion
Slide 25: New capabilities – LOLA
New capabilities – LOLA For personal use only From – Six loan origination systems To – One-stop lending application • Detailed data collection and rekeying for • Time to ‘Yes’ reduced from 15 days to <1 day existing customers • 25% reduction in banker time to process • Time consuming to obtain appro
Slide 26: New capabilities – Westpac Live
New capabilities – Westpac Live For personal use only From To • Dated desktop-based design • Roll-out to 800,000 business customers complete • Inconsistent experience across devices • Digital sales up 35% YoY • Limited functionality • Complaints down 56% YoY • High cost and slow to change • Online N
Slide 27: Transformed St.George Business Banking Online
Transformed St.George Business Banking Online For personal use only A completely new look and feel, designed with customers at the centre 27 | Consumer Bank and Business Bank Update I 24 March 2016
Slide 28: Scalable to any device
Scalable to any device For personal use only 28 | Consumer Bank and Business Bank Update I 24 March 2016
Slide 29: Strategic intent: Long term customer value – priority segments
Strategic intent: Long term customer value – 4 priority segments For personal use only Vision: To make Australian businesses stronger Opportunity Our approach 1 Targeted products • Large number of micro SME and services for customers with few products Build on digital self-service • When we engage,
Slide 30: Our transformation agenda
Our transformation agenda For personal use only A B C D Distribution Best banker Best origination and Reasons to for the 21st relationships servicing processes choose us Century 1 Micro 2 LOLA SME Walk out working Tactical Initiatives Banker and Value (Activate business and capability Connect Digita
Slide 31: Experienced, proven leadership team ready to deliver
Experienced, proven leadership team ready to deliver For personal use only Alastair Welsh Julie Rynski Cathy Yuncken Paul Verschuer Richard Burton GM Westpac GM Westpac SME GM St George GM Specialist Chief Financial Commercial Business Banking Products and Services Officer 25yrs 23yrs 35yrs 5yrs 25y
Slide 32: Westpac Business Bank is strongly positioned
Westpac Business Bank is strongly positioned For personal use only Maintained momentum through restructure Investment beginning to deliver Four clear strategic priorities Focused on execution and delivery 32 | Consumer Bank and Business Bank Update I 24 March 2016
Slide 33: Westpac Consumer Bank and Business Bank Update
For personal use only WESTPAC CONSUMER BANK AND BUSINESS BANK UPDATE
Slide 34: Appendix – Summary financials 2015
Appendix – Summary financials 20151 For personal use only FY15 ($bn) Consumer Bank Business Bank Operating income 7.3 4.9 Expenses (3.1) (1.8) Core earnings 4.2 3.1 Impairment charge (0.5) (0.3) Tax & non-controlling interests (1.1) (0.8) Cash earnings 2.6 2.0 Net interest margin (%) 2.22 2.77 Expen
Slide 35: Disclaimer
Disclaimer For personal use only The material contained in this presentation is intended to be general background information on Westpac Banking Corporation (Westpac) and its activities. The information is supplied in summary form and is therefore not necessarily complete. It is not intended that it