Commonwealth Bank Of Australia · ASX:CBA
Commonwealth Bank Of Australia — Investor Presentation (July 2003)
33 slides from Commonwealth Bank Of Australia's investor presentation, Jul 29, 2003
Slide 1: Commonwealth Bank Investments & Insurance Services
Commonwealth Bank Investments & Insurance Services 29 July 2003
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, 29 July 2003. 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: Speaker's Notes
Speaker’s Notes x Speaker’s notes for this presentation are attached below each slide. « To access them, you may need to save the slides in PowerPoint and view/print in “notes view.”
Slide 4: Discussion Outline
Discussion Outline » Peter Beck Comminsure Strategy Managing Director, and Business Overview Comminsure » John Pearce CFSI Strategy and Chief Executive Officer, Business Overview Colonial First State Investments : Stuart Grimshaw Conclusion Group Executive, investments and Insurance Services Questio
Slide 5: IIS organisational structure
IIS organisational structure = Lnvestment and Taynrance Services: «Sivact: Grimshaw) = Colonial Hirst Colonial Hirst ee Commonwealth © : : State ‘State Property. Ce Colonial ‘Comminsure codnivestinents. : ee aM Products : es = : (fam Waring) | | | (@ratiame: (Peter Beeld) (John Pearce): Mc Williann)
Slide 6: Key Messages
Key Messages There is significant value in having an end to end value chain presence We are building on our leading competitive position in investments and insurance manufacturing We are leveraging and extending our distribution strengths We are growing our platform capabilities | want you to take a
Slide 7: We have strengths across the value chain and benefit from an end to end presence
We have strengths across the value chain and benefit from an end to end presence HS Products and Services by Value Chain Element Direct We are one of the General ane Insurance Dealer group market leaders in: services. |5ERERESEEEES] | * Asset management a = > Life insurance Master Trust + Research e
Slide 8: There are a number of notable recent achievements across IIS
There are a number of notable recent achievements across IIS » Integration of Commonwealth Investment Management and First State Investments » Good progress on legacy product and systems rationalisation » Achieved leading market share position in Life Insurance « Significant growth in Property Funds
Slide 9: Our broad strategic agenda will deliver benefits over short to long term time horizons
Our broad strategic agenda will deliver benefits over short to long term time horizons Expected Timing of Pay-off a + Product and platform + Capture the investment innovation and insurance needs of , more of our banking * Prudent growth options * Continue to develop a customers range of tools to mee
Slide 10: Significant margin is captured through our manufacturing capability
Significant margin is captured through our manufacturing capability Hllustration: Managed Investment Revenue Margins {bps} 170-275 Greater leverage of front-end success 120-495 through capture of manufacturing margin Flexible offering - can be bundled or offered separately End to End Asset Mode! Man
Slide 11: We are extending and leveraging our strengths in distribution
We are extending and leveraging our strengths in distribution HS Internal Distribution Model Established one distribution support services team focused on CBA channels Well positioned to drive sales through CBA channels: Large internat managed funds and insurance sales growth opportunity Good progre
Slide 12: Rationalising products and systems will allow us to realise further efficiencies
Rationalising products and systems will allow us to realise further efficiencies Legacy Systems Rationalisation « Established one team to manage (2062 - 2005) investments legacy products and systems: Product rationalisation Client migration Systems decommissioning Key drivers of success: Client rete
Slide 13: Discussion Outline
Discussion Outline » Stuart Grimshaw Group Executive, investments and Insurance Services IIS Strategy and Business Overview » John Pearce Chief Executive Officer, Colonial First State Investments : Stuart Grimshaw Group Executive, investments and Insurance Services Questions and Answers CFSI Strateg
Slide 14: The insurance industry outlook has changed
The insurance industry outlook has changed Industry Outlook Implications A maturing industry: + Favourable long term growth + Commaditised products + Lower investment returns + Competitive and consolidating + Increased regulatory focus + Atime of ‘surprises’: Sept 11, Canberra, Bali, HIH + Low penet
Slide 15: Progress against stated strategies
Progress against stated strategies integrated cail centre & Ops Combine fife and general insurance Integrated service Total insurance & financial solutions Promoted Comminsure brand Packaging & foyalty programs Rebranding products Packaging & loyalty programs: Scale & efficiency in service Smaii bus
Slide 16: We have achieved significant scale and efficiency in our life business
We have achieved significant scale and efficiency in our life business Comminsure Life Insurance New Business Achieved through: {Dec 00 to Dec 02) » Leveraging multiple distribution channels 53 » Selective repricing Product innovation Now Bupinass Preanium ($n) New Business Marke Improving efficienc
Slide 17: Our distribution channel strengths underpin our performance
Our distribution channel strengths underpin our performance Life Insurance new sales & re-rates by channel {00/01 to 02/03} « Continued focus on critical third party channel 100% = $58.4M 100% = $54.1M 160% = $81.1M « Strong recent growth in CBA 58% direct and branch channel sales 79% 72% « Leverage
Slide 18: We have also achieved solid growth across our broad range of protection products
We have also achieved solid growth across our broad range of protection products Product Category Market Share / Rankings Growth over past 12 months: » Group Risk 16.7%, Disability 9.8%, Lump Sum 8.1% Home & Contents 7.8% Group Risk Lump Sum | Annuities |< Motor Insurance 130% Disability {distributi
Slide 19: Further opportunities exist to enhance the efficiency and scale of our Insurance business
Further opportunities exist to enhance the efficiency and scale of our Insurance business Build scale and grow the business: Competitive, rational pricing Optimised, multi-channel distribution Meet insurance needs of more of our banking customers. Customising products for customer needs/channels Bui
Slide 20: Discussion Outline
Discussion Outline » Stuart Grimshaw Group Executive, investments and Insurance Services » Peter Beck Managing Director, Comminsure IIS Strategy and Business Overview Comminsure Strategy and Business Overview : Stuart Grimshaw Group Executive, investments and Insurance Services Questions and Answers
Slide 21: A tough new era for funds management
A tough new era for funds management Industry Outlook Implications The “Winners” A maturing industry: + Slowing, but favourable, jong term growth Lower investment returns Concentration of power Growth of platforms Institutionalisation of distribution Increased regulatory focus Industry shake up Scal
Slide 22: Our business model
Our business model “PEOPLE “e. Strong culture + Employer of choice Colonial First State’s (CFS’s) success has often been attributed to success as an investment manager, with a particular emphasis on Australian equities. This view of CFS is far too narrow. * Breadth of products extend across all main
Slide 23: Colonial First State has a broad, well positioned product suite
Colonial First State has a broad, well positioned product suite CFS Internal Product View High Growth Potential Low Growth Potentiat Low High Margin Margin Our investment management capabilities are broad, in terms of asset class and investment style, and we maintain an ongoing commitment to innovat
Slide 24: CFS has a distribution network with breadth and scale
CFS has a distribution network with breadth and scale CFS Quarterly Sales ($M. (1999 to 2003} « Continuing importance of the IFA channel « Sales through bank channel growing strongly wit, PN CBA ee with CBA Conmameatth fark ay 24 The IFA channel remains extremely important, continuing to capture a l
Slide 25: Our brand and customer service ratings continue to be strong
Our brand and customer service ratings continue to be strong Newspoll Survey - Fund Manager Preferences {June 2003} Recognised in the market for @: Would you invest with us? customer service —Merc/iING —Col First State AXA AMP BT Perpetual a5 « Leading brand - and deliver on 304 Bec-99 Jun-G0 Dec-06
Slide 26: FirstChoice has been a "killer application" in the market
FirstChoice has been a “killer application” in the market Platforms Market Australia (September 2062 to March 2003} « FirstChoice: 4,200 CBA BY / Westpac s Leverages existing scale 900 + Macquarie innovative mandate structure « Simple, low pricing = coo Asgard AMP Late to market but topping & i" ind
Slide 27: The FirstChoice mandate structure has a number of benefits over a traditional masterfund
The FirstChoice mandate structure has a number of benefits over a traditional masterfund Custody + Unique Straight Through Processing between CFS and managers through centralised custodian Investment + CFS remains legal owner / administrator of the fund. Management Ease of manager change with minima
Slide 28: We have favourable platform economics due to our end to end presence
We have favourable platform economics due to our end to end presence Typical FirstChoice Revenue Split Allows CFS/CBA to capture greater share of available margin Rearain 60bps 60bps 60 bps Adviser/customer still provided choice Percentage Aazet Mangae Administered Source of Flows - of distribution
Slide 29: We are building our platform capabilities to further drive market advantage
We are building our platform capabilities to further drive market advantage “Day One” “Day Four” + Next Generation platform “Day Three” enhancements: + integrated, end to end > expanded client review platform offering: functionality “Day Two” ~ increased ~ portal-based By wo functionality ~ encompas
Slide 30: Discussion Outline
Discussion Outline » Stuart Grimshaw Group Executive, investments and Insurance Services » Peter Beck Managing Director, Comminsure » John Pearce Chief Executive Officer, Colonial First State Investments IIS Strategy and Business Overview Comminsure Strategy and Business Overview CFSI Strategy and B
Slide 31: Key Messages
Key Messages There is significant value in having an end to end value chain presence We are building on our leading competitive position in investments and insurance manufacturing We are leveraging and extending our distribution strengths We are growing our platform capabilities | want to re-emphasi
Slide 32: Discussion Outline
Discussion Outline » Stuart Grimshaw Group Executive, investments and Insurance Services » Peter Beck Managing Director, Comminsure » John Pearce Chief Executive Officer, Colonial First State Investments : Stuart Grimshaw Group Executive, Investments and Insurance Services IIS Strategy and Business
Slide 33: Commonwealth Bank Investments & Insurance Services
Commonwealth Bank Investments & Insurance Services 29 July 2003 33
Commonwealth Bank of Australia — Investor Presentation (July 2003) on 6ix