Anz Group Holdings Limited · ASX:ANZ
Anz — Australia and New Zealand Banking Group — ESG Presentation (August 2018)
41 slides from Anz's sustainability presentation, Aug 31, 2018
Slide 1: 2018 ESG Briefing Presentation & Discussion Pack
Shani completed MoneyMinded as part of her participation in Saver Plus. 2018 ESG BRIEFING PRESENTATION & DISCUSSION PACK AUSTRALIA AND NEW Z EAL AND BANKING GROUP LIMITED 31 August 2018
Slide 2: Agenda
AGENDA Tony Warren, GGM Communications & Public Affairs • Welcome & introduction Shayne Elliott, CEO • ESG focus & progress Katherine Bray, Customer Engagement Lead & Sarah Stubbings, Tribe Lead Responsible Banking • Financial wellbeing, product suitability, remediation Shayne Elliott, CEO & Frank C
Slide 3: 2018 ESG Briefing - Tony Warren
2018 ESG BRIEFING TONY WARREN GROUP GENERAL MANAGER COMMUNICATIONS & PUBLIC AFFAIRS AUSTRALIA AND NEW Z EAL AND BANKING GROUP LIMITED 31 August 2018
Slide 4: 2018 ESG Briefing - Shayne Elliott
2018 ESG BRIEFING SHAYNE ELLIOTT CHIEF EXECUTIVE OFFICER AUSTRALIA AND NEW Z EAL AND BANKING GROUP LIMITED 31 August 2018
Slide 5: External Trends Redefining Our Future
EXTERNAL TRENDS REDEFINING OUR FUTURE 1. Lower growth in our home markets of Australia and New Zealand 2. Fundamental changes to customer behaviour 3. Advances in technology opening up new business models and ways of competing 4. Regulation and changing societal expectations reshaping the industry 5
Slide 6: Four Priorities
FOUR PRIORITIES Building a better bank Creating a simpler, better balanced bank Focusing on areas where we can win Building a superior everyday experience to compete in the digital age Driving a purpose and values-led transformation 6
Slide 7: Our Purpose & Values
OUR PURPOSE & VALUES Our purpose is to shape a world where people and communities thrive ‘We’re guided every day by our purpose and values. Our values mean whatever situation we’re in, we care about our customers, our colleagues and how our actions contribute to the ‘community.’ 92% 92% of our peopl
Slide 8: Our Purpose & Values
OUR PURPOSE & VALUES Has helped shape our low carbon finance commitment Progress towards $15bn target for low carbon and sustainable solutions 15.0 $b Fund and facilitate at least $15 billion by 2020 in low carbon and sustainable solutions including renewable energy 8.3 generation, green buildings a
Slide 9: Governance
GOVERNANCE Ethics, Environment, Social & Governance Committee - Board Committee • Increased focus on ethics and conduct issues • Ethics front & centre of the Committee’s discussions Ethics & Responsible Business Committee – Group Executive Committee Leadership & decision-making body Agrees & sets AN
Slide 10: Our Decision Principles
OUR DECISION PRINCIPLES What is ‘right’ for ANZ 1. Protect and enhance each person’s ability and freedom to choose 2. Minimise potential and actual harm, especially for the vulnerable 3. Support progressive practices that benefit people, communities, and industries 4. Have a real impact on some of s
Slide 11: ESG Scorecard Snapshot
ESG SCORECARD SNAPSHOT Progress Outcome SUSTAINABLE GROWTH Fund and facilitate at least $15 billion by 2020 in low carbon and sustainable solutions1 $8.3b (March 18) Amend our risk appetite and customer assessment process to increase emphasis on Completed climate change risks and management by end 2
Slide 12: ANZ Reforms
ANZ REFORMS Key changes implemented over the last 2 years Changes to incentives in our branches, call centres and broking Eliminated all financial measures from our financial planners’ scorecard Simplified our main standard contracts for small business customers Removed ATM Fees for non-ANZ customer
Slide 13: Changing the Way We Work
CHANGING THE WAY WE WORK Reshaped our Australia Division & Technology team Increased speed Delivering value to customers New way of working to market for faster. Evidenced by: release customers frequency, customer engagement • Agile methodology • Small, multidisciplinary, teams • Iterative ways of w
Slide 14: Summary
SUMMARY • Purpose today was to better inform you about our business, and how we’re navigating sensitive social and economic issues • We recognise ANZ’s long-term viability is dependent on us making decisions that are mindful of the impact we have on the community • For ANZ to have a sustainable, lon
Slide 15: 2018 ESG Briefing - Katherine Bray, Sarah Stubbings
2018 ESG BRIEFING KATHERINE BRAY, CUSTOMER ENGAGEMENT LEAD SARAH STUBBINGS, TRIBE LEAD RESPONSIBLE BANKING AUSTRALIA AND NEW Z EAL AND BANKING GROUP LIMITED 31 August 2018
Slide 16: Financial Wellbeing
FINANCIAL WELLBEING Financial wellbeing is at the heart of our social licence to operate 3 KEY PLANKS Active Not borrowing Paying down Saving for everyday debt expenses saving regularly for a both persistent rainy day and for not needing to turn to revolving debt and as goals, including a credit for
Slide 17: Active Saving
ACTIVE SAVING Helping customers to save, with tools, training, capability & insight • Tools and training to first home coaches to help customers create a home deposit plan • Developed capability for customers to track progress to their goals in internet banking • Trialing nudges via email and SMS fo
Slide 18: Not Borrowing for Everyday Expenses
NOT BORROWING FOR EVERYDAY EXPENSES Educating customers on first credit card, helping persistent revolvers manage their debt • 12 month credit card education program designed to help customers using this product for the first time • Education program developed to ensure customers know how to use bal
Slide 19: Paying Down Debt
PAYING DOWN DEBT Providing ‘nudges’ to help customers pay down debt, including getting faster to home ownership • Helping customers on interest only home loans to think about moving to principal and interest • Nudging customers to use their tax refund to either save the money or pay down debt 19
Slide 20: Paying Down Debt
PAYING DOWN DEBT Helping our customers transition from interest only ANZ SCHEDULED INTEREST ONLY TERM EXPIRY1 Interest only mission: “We want our home loan $b customers to be as prepared as possible for the 4 10 18 19 18 move from Interest Only to Principal & Interest” 12 11 12 FY17 FY18 FY19 FY20 F
Slide 21: Product Suitability
PRODUCT SUITABILITY A core component of financial wellbeing and aligned to our Purpose We want our To use them And to get customers to as intended value from be provided them with suitable products & services 21
Slide 22: Product Suitability Focus
PRODUCT SUITABILITY FOCUS Using data to help customers, focusing on ‘vulnerable‘ customers initially Using our data to help our • Completed pilot to educate & help customers get value from customers with persistent credit card debt their products • Starting pilot to help concessional card customers
Slide 23: Credit Card Suitability Pilot
CREDIT CARD SUITABILITY PILOT Customers Customers taking up a 12,000 ~3,500 customer assistance plan are paying down more and spending less, with a 9% ~2,000 reduction in card utilisation Only 1% of the group fell into arrears vs. 5% for the Customer Pilot Group Reached Took up a customer remaining
Slide 24: Customer Outcomes
CUSTOMER OUTCOMES Positive customer outcomes – case for operationalising the process Customer: Maree Customer: Michael • Customer for 30 years • 41 year old • Receives aged pension • High card balance, spent on higher education • Makes just above monthly repayments • Makes regular monthly payment •
Slide 25: Approach to Customer Remediation
APPROACH TO CUSTOMER REMEDIATION New approach to drive quicker outcomes Refund our Learn from our Fix things customers as mistakes properly soon as and prevent the need possible for remediations from and prevent repeat issues happening we weren’t set up to do that 25
Slide 26: Customer Remediation Actions
CUSTOMER REMEDIATION ACTIONS • Developed a project specialisation in remediation • Appointed Customer Fairness Advisor • Developed ANZ’s Remediation Principles and our Remediation Framework • Formed the new Responsible Banking Tribe with 150 people dedicated to fast and consistent customer remediati
Slide 27: Actions to Make Payments to Customers Faster
ACTIONS TO MAKE PAYMENTS TO CUSTOMERS FASTER Getting access to customer Building out common tools data faster and payment approaches Taking a customer orientated New Ways of Working approach 27
Slide 28: Actions to Prevent Future Remediation & Fixing Things Properly
ACTIONS TO PREVENT THE NEED FOR FUTURE REMEDIATION & FIXING THINGS PROPERLY • Sharing the learnings about the mistakes we have made • Building shared mindset & accountability • Early input into new product and initiative development to prevent future remediations • Fixing the root cause issue • Our
Slide 29: 2018 ESG Briefing Discussion Pack
2018 ESG BRIEFING DISCUSSION PACK AUSTRALIA AND NEW Z EAL AND BANKING GROUP LIMITED 31 August 2018
Slide 30: Four Priorities
FOUR PRIORITIES Building a better bank Reducing operating costs and risks by removing product and management complexity Creating a simpler, better Exiting low return and non-core businesses balanced bank Reducing reliance on low-return aspects of Institutional banking in particular Further strengthe
Slide 31: Simplification & Focus
SIMPLIFICATION & FOCUS CAPITAL ALLOCATION FOCUSING ON AREAS WHERE WE CAN WIN SEPTEMBER 15 Pro forma MARCH 20181 • #1 Lead Bank Penetration in Australia & New Zealand2 • #4 Corporate Bank in Asia3 & #1 Overall Quality in Asia4 • Introduced First Home Buyer coaches in Australia and focused on Owner Oc
Slide 32: Sustainability Performance
SUSTAINABILITY PERFORMANCE COMMUNITY INVESTMENT1 EMPLOYEE ENGAGEMENT2 LOW CARBON AND SUSTAINABLE Total community investment ($m) Employee engagement score (%) SOLUTIONS $15B TARGET Funded and facilitated ($b) 131 73 76 74 72 8.3 6.9 90 76 75 2.5 2014 2015 2016 2017 2014 2015 2016 2017 2016 2017 Mar-
Slide 33: Sustainable Development
SUSTAINABLE DEVELOPMENT • ANZ supports the UN Sustainable Development Goals (SDGs). We have mapped the relevant SDGs to our sustainability targets, as well as to our Project & Export Finance book to understand key sustainability drivers underpinning that business • We are participating in the UN Glo
Slide 34: Key ANZ Reforms
KEY ANZ REFORMS Implemented over the last two years IMPROVED MONITORING, CONDUCT AND SAFEGUARDS • Appointed Colin Neave AM as Customer Fairness Advisor, a new role to help improve fairness of the bank’s products and services • Implemented a new Retail ‘Customer Experience Framework’ in branches and
Slide 35: Key ANZ Reforms
KEY ANZ REFORMS Implemented over the last two years REDUCED REMUNERATION FOCUS ON SALES • Updated and published ANZ Remuneration Principles to further reinforce our focus on customer outcomes • Changed Retail (branch and call centre) and Business and Private Bank incentive plans removing campaign in
Slide 36: Group Portfolio Composition
GROUP PORTFOLIO COMPOSITION EXPOSURES BY INDUSTRY IMPROVED RISK PROFILE EXPOSURE AT DEFAULT (EAD) AS A % OF TOTAL EAD TOTAL GROUP OUP EAD (Mar 18) = $930b1 LOWER LOSS RATE ASSET CLASSES EXPOSURE AT DEFAULT ($b) (<5bp loss rate) 5.9% 1.6% 1.4% 566.7 504.5 2.1% 1.7% 1.3% 190.0 173.5 2.2% 2.9% 331.0 37
Slide 37: Group Portfolio Composition
GROUP PORTFOLIO COMPOSITION % of Portfolio in Non Portfolio Balance in Non Category % of Group EAD Performing Performing Sep 17 Mar 18 Sep 17 Mar 18 Mar 18 Consumer Lending 41.5% 40.5% 0.1% 0.1% $425m Finance, Investment & Insurance 17.2% 18.5% 0.0% 0.0% $86m Property Services 6.6% 6.6% 0.3% 0.3% $1
Slide 38: Portfolio Trends
PORTFOLIO TRENDS Note: % of portfolio in non performing = % of segment non performing exposures as a % of total segment exposures at default (EAD). 38
Slide 39: Portfolio Trends
PORTFOLIO TRENDS Note: % of portfolio in non performing = % of segment non performing exposures as a % of total segment exposures at default (EAD). 39
Slide 40: Group Resources Portfolio
GROUP RESOURCES PORTFOLIO RESOURCES EXPOSURE BY SECTOR (%) Total EAD (Mar 18): $15.1b 9.4 As a % of Group EAD (Mar 18): 1.6% 8.3 7.2 7.6 4.5 4.6 4.4 3.7 2.6 3.0 2.4 1.8 1.4 1.4 1.2 1.0 1.1 1.1 0.9 0.9 Coal Mining Metal Ore Mining Oil & Gas Extraction Other Mining Services To Mining Mar 15 Mar 16 Mar
Slide 41: Disclaimer & Important Notice
DISCLAIMER & IMPORTANT NOTICE: 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 inves
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