Westpac Banking Corporation · ASX:WBC
Westpac Banking — Investor Presentation (March 2017)
34 slides from Westpac Banking's investor presentation, Mar 23, 2017
Slide 1: Wealth Update March 2017
WESTPAC BANKING CORPORATION ABN 33 007 457 141 For personal use only Wealth Update March 2017 Brian Hartzer Chief Executive Officer
Slide 2: Investing in the wealth opportunity
Investing in the wealth opportunity For personal use only Investments and insurance are a strategic priority Starting from a position of strength Scale supports investment Significant investment now moving to commercialisation 2
Slide 3: Supporting customers through their life
Supporting customers through their life Starting Working Pre-retiree Retiree For personal use only Out 25-44 45-64 65+ 15-25 Spend on financial services by a family through their lives ($ per annum) Insurance 11% Investments (incl superannuation) Banking Lifetime 52% 37% spend 15 20 25 30 35 40 45 5
Slide 4: BT Financial Group: Serving customers through their life
For personal use only BT Financial Group Serving customers through their life Brad Cooper Chief Executive, BT Financial Group 4
Slide 5: Growth and returns attractive
Growth and returns attractive For personal use only Strong growth profile Attractive ROE (%)3 Superannuation funds projected to 2015 2016 grow close to 8%pa over the next decade1 • Rising superannuation guarantee • Aging population • Increased need to fund retirement 17.5 16.1 15.8 15.0 13.8 Banking
Slide 6: Significant opportunity in wealth remains
Significant opportunity in wealth remains 18.5%1 of Westpac Group customers have at least one BT Financial Group For personal use only product although individual segment shares are small Westpac Group customers with a BT Financial Group product (%) Personal super 3.3 Work-based super 4.1 Managed In
Slide 7: BT spans wealth, private banking and insurance
BT spans wealth, private banking and insurance Financial reporting Business divisions Dimensions1 For personal use only 510 Salaried advisers Advice 589 Magnitude and Securitor advisers $32bn FUM2 Funds Investments $1bn Deposits, $2bn Margin lending Management $21bn Deposits, $2bn FUA3 Private Wealt
Slide 8: Well positioned for superannuation growth
Well positioned for superannuation growth Australian superannuation funds under management1 ($bn) For personal use only Post retirement 6,616 • Service based model Pre retirement • Positioned across value chain CAGR 7.9% 2016-2031(f) • Strong customer relationships MySuper and adviser network SMSF •
Slide 9: Wealth industry - a strong regulatory framework
Wealth industry - a strong regulatory framework • Comprehensive income product for retirement (CIPR) • Further investment in monitoring and detection For personal use only • Future of financial advice (FOFA) • Fee for service model for advisers since 2011 • Life Insurance Framework • Product incenti
Slide 10: Operating a different model in Life Insurance…
Operating a different model in Life Insurance… For personal use only Customer oriented • Fairness, transparency & empathy claims philosophy • Focused on wellbeing, rehabilitation Strategy • 1st to introduce 24 month terminal illness cover Leading products 1 • High IRESS ratings across products BT di
Slide 11: …and delivering superior outcomes
…and delivering superior outcomes Market share of Life in-force premiums1 (%) For personal use only Change in -1.8 FY13 FY16 market share -1.5 Growing FY13-FY16 +0.2 -2.4 +1.8 share % pts 17.9 16.1 15.3 13.8 12.6 12.8 12.7 8.5 10.3 10.3 BT Peer 1 Peer 2 Peer 3 Peer 4 Life insurance lapse rates1 FY16
Slide 12: Life Insurance – three next steps
Life Insurance – three next steps Investing in the Capturing opportunities in Enhancing For personal use only customer experience corporate master trust capital efficiency • Digital quoting, origination, • Industry shake-out has • $250m in capital efficiencies and underwriting created opportunity to
Slide 13: Panorama will enable substantial restructuring
Panorama will enable substantial restructuring Panorama is the new operating system underpinning BTFG’s operations For personal use only • Development first commenced in 2012 • Total expected cost of around $630m. $390m spent to date (at 30 Sept 2016) • Completion cost includes migration of old plat
Slide 14: BT Financial Group: Transforming the business
For personal use only BT Financial Group Transforming the business John Shuttleworth General Manager, Platforms & Investments
Slide 15: Panorama – a transformational operating system
Panorama – a transformational operating system Panorama is simplifying our superannuation and investments business, offering For personal use only advisers and investors access to a broad range of portfolios and investments Portfolios Investments SMSF Super Insurance Investment Mobile Intuitive Clic
Slide 16: SMSFs provide a significant opportunity
SMSFs provide a significant opportunity Nearly $1 in every $3 in superannuation is invested through a self-managed For personal use only superannuation fund Market Westpac Position $654bn - assets today1 120,000 – SMSFs via BTFG’s adviser and licenced accountant distribution network ~$1tn – assets i
Slide 17: Product complexity – >50 products and platforms
Product complexity – >50 products and platforms Over time, growth and acquisitions has led to product and platform duplication. For personal use only Migration to Panorama will simplify Red = closed to new investors 17
Slide 18: Moving from systems to one core operating system
Moving from 7 systems to one core operating system Modernising technology and consolidating registry systems into one platform For personal use only System Heritage Age Products APS1 Asgard 1991 (26) Super & M/T Asgard AFS2 Asgard 2001 (16) Asgard Wrap TRUAIO BT 1997 (20) BT Wrap Wrap Wrap (Core) BT
Slide 19: Reducing cost and complexity
Reducing cost and complexity >500 end user applications are linked to our existing registry systems For personal use only Client Cognos Cognos Client Links Reporting ART Diary SWEC ASCALC TLM Reports CUBE Reports Intranet System Redirect builds Archive Load PresCom SIM & Gearing FMStats GW DSS PAYG
Slide 20: Reducing multiple trustees and super funds
Reducing multiple trustees and super funds Trustees Super Funds For personal use only Retirement Wrap BTFM Reduction will deliver BT Lifetime Super • Access to best in class BTFM2 BT Classic Lifetime Super products for customers Westpac Master Trust • Lower system/ WSAL Westpac Personal Super mainte
Slide 21: Materially simplifying our business
Materially simplifying our business For personal use only From To Products >50 3 Trustees 4 1 Super funds 12 1 Registry systems 7 1 21
Slide 22: Progress
For personal use only Progress 22
Slide 23: Investment platform with all assets
For personal use only Investment platform with all assets 23
Slide 24: Personal super for advised customers
For personal use only Personal super for advised customers 24
Slide 25: Redefining SMSF - a complete end-to-end offer
Modular structure Functionality For personal use only Redefining SMSF - a complete end-to-end offer for investors, advisers and accountants 25
Slide 26: Direct investment offer - BT Invest - through online banking
For personal use only Direct investment offer - BT Invest - through online banking 26
Slide 27: Panorama connected to core banking systems
For personal use only Panorama connected to core banking systems 27
Slide 28: Launched mobile for advisers and investors
For personal use only Launched mobile where advisers and investors can view and trade their portfolios 28
Slide 29: Building momentum in Panorama
Building momentum in Panorama FUA on Panorama ($m) Investors on Panorama (#) For personal use only 4,000 3,696 7,000 6,038 3,500 6,000 3,000 5,000 2,500 4,000 2,000 3,000 1,500 1,000 2,000 500 1,000 0 0 SMSF Funds on Panorama (#) Advisers using Panorama (#) 3,500 1,200 2,984 955 3,000 1,000 2,500 80
Slide 30: Panorama – a unique offer for investors and advisers
Panorama – a unique offer for investors and advisers • One operating system for super, investments, SMSFs and insurance For personal use only One core operating • Broad range of investments – cash, term deposits, managed funds, listed system securities, managed portfolios, tailored portfolios • One
Slide 31: BT Financial Group: Brad Cooper
For personal use only BT Financial Group Brad Cooper Chief Executive, BT Financial Group 31
Slide 32: Summary
Summary For personal use only Strong franchise Short-term headwinds Well placed across the although significant wealth value chain long-term opportunities Investing while Panorama will Scale and growth others pull back extend leadership will mitigate margin pressure 32
Slide 33: Investor Relations Team
Investor Relations Team Equity investor relations For further information For personal use only Andrew Bowden Nicole Mehalski Head of Investor Relations Director Visit our updated investor centre at www.westpac.com.au/investorcentre +61 2 8253 4008 +61 2 8253 1667 andrewbowden@westpac.com.au nicole.
Slide 34: 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