Anz Group Holdings Limited · ASX:ANZ
Anz — Australia and New Zealand Banking Group — Investor Day (July 2007)
31 slides from Anz's investor day presentation, Jul 11, 2007
Slide 1: Business Banking – a snapshot
Business Banking – a snapshot Australia and New Zealand Banking Group Limited 19 June 2007 James Flintoft Managing Director
Slide 2: Business Banking – a snapshot
Business Banking – a snapshot • ‘Old’ business banking traditionally a good performing Historically strong business, 1H07 impacted by restructure and margin decline franchise • Customer satisfaction above the other Australian majors • Good staff engagement • Lower propensity to switch Restructured t
Slide 3: Restructure to drive long term profit growth
Restructure to drive long term profit growth Business Banking segment realigned to drive growth Lending growth 18 1H07 v 1H06 “Old” Business “Old” Corporate 16 Banking 14 12 10 8 Small Business 6 Corporate 4 Business Banking 2 0 Turnover $20m $50m $500m Old BB Old CB Old CB now in now in BB DPG The
Slide 4: Franchise metrics remained strong through transition period
Franchise metrics remained strong through transition period Customer satisfaction above major peers* Our staff engagement has been Customer Satisfaction with Main Bank (%) 90 maintained 80 100% 70 60 50 80% Apr-05 Oct-05 Apr-06 Oct-06 Apr-07 75% Market share has remained stable* 63% 30 Share of bala
Slide 5: We are already seeing quick wins from the new structure
We are already seeing “quick wins” from the new structure with momentum rebuilding Calling rates have improved 2007 Call Rates (Jan-07 index = 100) 400 Credit approvals are on the rise Credit approvals (Week commencing 5 Jan index = 100) 300 400 Cashflow 200 Secured Easter 350 100 300 0 Easter Jan-0
Slide 6: Our core customer proposition is the focus of our growth strategy
Our core customer proposition is the focus of our growth strategy We Learn More About Our Customers • Understand our customers, their businesses, industry & local market Understanding • Understand linkages between our customer’s businesses & personal wealth • Passionate about their businesses And We
Slide 7: Positioning the franchise to capture growth in FY08 and beyond
We are positioning the franchise well to capture growth in FY08 and beyond ‘Relationship Manager of the Increasing sales force Future’ (sales processes, sales effectiveness management, training, coaching, incentives, culture) ‘District of the Future’ Streamlining the way we do (policy and process bu
Slide 8: Additional information
Additional information 8
Slide 9: A quick recap on the first half
A quick recap on the first half Business Banking performance 1H07 vs 1H06 Lower than expected outcome, ‘Old’ Business reinforces need to restructure Banking ‘Old’ Corporate business to continue growing. Banking Significant improvement 36 (19) expected in 2nd half (6) 5 (7) (22) 4 25 19 103 Significa
Slide 10: A quick recap on the first half
A quick recap on the first half Good performance in volume Offset by increased margin growth for ‘old’ Business Banking pressure (Index 1H06 = 100) (‘Old’ Business Banking Margin position) $b (2.8) (2.4) (11.0) (6.7) (12.6) 6.5% 12.7 6.7% Funding Mix Asset Mix Assets 9.2 Liabilities Other 8.6 8.1 5.
Slide 11: Credit quality remains sound, some losses in 1H07 but no systemic issues
Credit quality remains sound, some losses in 1H07 but no systemic issues Portfolio is well secured Delinquency trends steady* across different risk bands $2.1bn $12.6bn $1.1bn 1.2% 100% >60 Days >90 Days 80% 0.8% 60% 40% 0.4% 20% 0% 0.0% >BB+ BB+ to BB- <BB- Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Fully
Slide 12: Credit growth still strong, but slowing customer numbers add competitive pressure
Credit growth still strong, but slowing customer numbers are contributing to competitive pressure Solid Business Credit Growth System growth in customers Forecast* slowing 20 (% annual change) (System Growth in # of small 18 business customers*) 16 14 % 12 2.5 10 8 2.2 6 4 2.0 2 0 1.5 98 99 00 01 02
Slide 13: Brokers a necessary part of doing business
Brokers a necessary part of doing business Role of the Broker in the Lending Customers choose brokers for Value Chain expertise & convenience before price* Exist. Relationship 30% 24% Client Credit Ongoing 18% Deal Renewal Referred by Act. 20% Acquisition Servicing 21% Writing Too busy 19% Get A Bet
Slide 14: General background information disclaimer
The material in this presentation is general background information about the Bank’s activities current at the date of the presentation. It is information given in summary form and does not purport to be complete. It is not intended to be relied upon as advice to investors or potential investors and
Slide 15: Maintaining the Momentum
Maintaining the Momentum Australia and New Zealand Banking Group Limited 20 June 2007 Brian Hartzer Group Managing Director Personal Division
Slide 16: A quick recap on the first half
A quick recap on the first half Business Unit Mar 07 v Mar 06 PBP NPAT* NPAT* ($m) Mortgages 10% 7% 191 Banking Products 25% 22% 182 Consumer Finance 30% 39% 146 Regional, Rural 51 8% 4% Contribution to Personal Division Small Business Banking 21% 25% 30 NPAT 5% 3% Esanda 15% 36% 61 9% 27% 4% Pacifi
Slide 17: An effective business system
An effective business system Strategy Financial Performance “More Employees Sustainable Convenient Banking” organic Customers growth Products & Brand Distribution Investment 3
Slide 18: Customer research led to Convenience and Simplicity
Customer research led to “Convenience and Simplicity” Clear segmentation Why should customers bank with ANZ (and not somebody else)?? Price Driven Service Driven Importance out of 10 Premium Important, Low Fees but not 8.5 dominant Branches Prime* convenient 8.2 Straightforward People fees 8.1 incre
Slide 19: Combined with an engaged and committed workforce
Combined with an engaged and committed workforce… Dramatic shift in staff Personal division staff remain satisfaction highly engaged (“am I satisfied working at the ANZ?”) 100% Positive Responses Negative Responses 65% 67% 64% 64% 80% 88% 60% 60% 58% 60% 54% 51% 57% Shift to 40% “engagement” 20% 20%
Slide 20: Has made ANZ the leader in Customer Satisfaction
Has made ANZ the leader in Customer Satisfaction… Highest Customer Satisfaction of the majors incl. St George (Main Financial Institution*) % 80 70 60 50 Sep-00 Mar-01 Sep-01 Mar-02 Sep-02 Mar-03 Sep-03 Mar-04 Sep-04 Mar-05 Sep-05 Mar-06 Sep-06 Mar-07 ANZ Peer 1 Peer 2 Peer 3 Peer 4 *Source: Roy Mor
Slide 21: …and delivered rewards for shareholders
…and delivered rewards for shareholders Personal division profit growth NPAT benefiting from 3% reduction in provisioning 22% 17% 16% 15% 15% 14% FY04 FY05 FY06 PBP NPAT 7
Slide 22: Our Business System generates sustainable organic growth
Our Business System generates sustainable organic growth Acquisition Strategy Financial Performance Cross sell “ More Employees Convenient Customers Banking” Attrition Products & Brand Distribution Investment Cost to Serve 8
Slide 23: Customer acquisition is the basis for future growth
Customer acquisition is the basis for future growth Customer • Strong brand – “More Convenient Banking” • Simple, market leading products Acquisition • Expanded distribution (branches, ATMs, Internet) • Strong local marketing and sales disciplines + • Customer Satisfaction Cross sell • Length of Rel
Slide 24: Acquisition: A strong track record, but growth may slow
Acquisition: A strong track record, but “traditional account” growth may slow as competitors improve Strong Brands Total Accounts opened 350,000 2H06 benefited from Visa Debit Card introduction 300,000 Expanded distribution 250,000 200,000 150,000 100,000 Compelling products 50,000 0 Mar_04 Mar-05 M
Slide 25: High growth in customer numbers creates opportunity
High growth in customer numbers creates opportunity… Number 2 in customer …but not yet #2 in overall With share of wallet still numbers… share below peers (but growing)* (Traditional Banking customer share*) (Traditional Banking Market share*) lower base from acquisition success 22% Peer 1: 38.9% 55
Slide 26: Cross-sell: Well placed to grow our share of wallet
Cross-sell: Well placed to grow our share of wallet Age of accounts drives cross sell… …as does customer satisfaction (FUM change for new customers over time Month 1 index = 100) Likelihood of buying new products Index 100% 350 300 80% 69% 250 59% 60% 200 150 40% 25% 100 20% 13% 50 10% 7% 0 0% 2 4 6
Slide 27: Attrition: Minimise through satisfied customers and complaint resolution
Attrition: Minimise through satisfied customers and effective complaint resolution High customer satisfaction… …and effective complaint resolution 99% of ANZ complaints responded to in 48 hours, 90% resolved in 48 hours Likelihood of retaining customers Didn’t experience 96% an issue 100% 89% Experi
Slide 28: Cost to serve: We have front-ended growth investments
Cost to serve: We have front-ended growth investments; efficiencies will help sustain future investment Investing in growth ahead Significant opportunity to shift cost of the pack from “back” to “front” % Cost by function Expense Growth – Personal Division 10 8 Service Operations 6 21% 18% 4 Dep’n a
Slide 29: Transformation an increasing priority
Transformation an increasing priority • Lean/Six Sigma methodology adopted to develop more efficient work flows, minimising double handling and inefficient processes • 240 people trained in Lean/Six Sigma methodology in the Personal Division in the last 12 months (700 in ANZ overall) • 69 projects u
Slide 30: Summary
Summary • Retail banking remains an attractive business • Clear strategy and integrated business system will help drive sustainable organic growth • Strong brand, highly satisfied customers, and highly engaged staff are hard to replicate • Continued investment, increasingly self funded, should deliv
Slide 31: General background information disclaimer
The material in this presentation is general background information about the Bank’s activities current at the date of the presentation. 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 investors or potential investors and
Australia and New Zealand Banking Group — Investor Day (July 2007) on 6ix