National Australia Bank Limited · ASX:NAB
National Australia Bank — UBS Financial Services Conference 2007
22 slides from National Australia Bank's conference presentation, Jun 21, 2007
Slide 1: Business and Private Banking, Australia
Business and Private Banking, Australia UBS Financial Services Conference 20th June 2007 George Frazis, Executive General Manager
Slide 2: Australian Region Financial Performance – A snapshot
Australian Region Financial Performance – A snapshot 1,120 Mar-06 HY Sep-06 HY 1,228 1,377 Mar-07 HY 974 1,194 1,071 145 163 183 23% Wealth Management Australia Australian Banking Australian Region Half Yearly Cash Earnings (pre IoRE)* $m ($ millions) Australian Region (excluding Asia) Operating Exp
Slide 3: Business and Private Banking – A snapshot
Business and Private Banking – A snapshot #1 position, 28.8% (SME*) business lending market share >225k customer relationship groups Corporate, Business (SME), Property, Agribusiness, Education, Government, Health (Medfin, HiCaps), Private 5200 people (FTE) 250 points of presence >50% of Australian
Slide 4: Situation years ago – core franchise was in trouble
Situation 3 years ago – core franchise was in trouble Largest business bank, but with declining market share and declining margins Cost growth faster than revenue growth Customer satisfaction declining, poor staff engagement Needed to stabilise the business urgently Note: Largest business bank by bu
Slide 5: Business & Private — How we achieved the turnaround
Introducing Credit Risk Managers into our Business Banking Centres and providing more authority to frontline bankers Priorities Business & Private — How we achieved the turnaround Introduced critical new products Simplified processes Increased banker capability Decentralised decision making Absolute
Slide 6: What was achieved – Sustainable volume growth over 2½ years
What was achieved – Sustainable volume growth over 2 ½ years Volumes 05/06 ($bn) Volumes 03/04 ($bn) Two year annual growth CAGR (%) 03/04 -05/06 11.3% $48.9 Deposits 12.5% $86.6 Home Lending** 20.9% $51.6 Business Lending* $64.6 $114.1 $81.9 Volumes March 07 – ($bn) *Excludes nabCapital and adjuste
Slide 7: Thinking about the future – Transaction banking market share and trend
Commercial $20m—$340m Transaction banking market share and trend Percentage share of primary relationships, by customer segment* A B NAB Thinking about the future - Focus on business transaction banking has increased market share in all segments C A C NAB B A C B NAB NAB A C B SME $5m—$20m Micro $1m
Slide 8: Thinking about the future – Wealth and nabCapital products cross-sell opportunity
Thinking about the future – Wealth and nabCapital products are an important emerging cross-sell opportunity Increased Investment products Banking channel penetration Growth in BPA-originated RMS sales Risk Management Sales through BPA Channels (%) growth yoy Source: Internal Source: Internal BPA Ret
Slide 9: Thinking about the future – Well positioned for growth given changing industry dynamics
Key Industry Dynamics Rise of non-traditional competitors, new channels Growth in size and sophistication of business and private banking clients Growing affluence and rise of superannuation Ageing populations Investor desire for greater personal control Growing importance of client advocacy Why we
Slide 10: Thinking about the future – Achieving Genuine Contact – Our business model
Thinking about the future – Achieving Genuine Contact – Our business model Best Bankers Specialist Industries, broad and capable general distribution Deep Knowledge Growth across cycles Advice and value added services Innovative Products Relationship Banking Specialisation Simple Business Doing thin
Slide 11: Thinking about the future – We have the best bankers
Thinking about the future - We have the best bankers and will continue to invest in their capabilities Relationship Banking Specialisation Extending our Relationship and Relevance with our Clients Lending Foreign Exchange Cash/transaction banking Reactive conversations Capital Management Risk Manage
Slide 12: Summary
Summary Australian Region growing and controlling costs Major franchise, Business and Private, a significant part of the Region’s success We have a differentiated approach, not easily replicated, and sustainable Growth opportunities
Slide 13: Appendix
2 Appendix
Slide 14: Australian Banking Revenue Growth
Australian Banking Revenue Growth NAB volume growth YoY percentage change Volume growth remains strong Australian bank net interest margin Net Interest Margin* Margin impact has been limited Mar 05 Mar 06 Mar 07 Note:* Ongoing basis Source: Internal Business lending (inc bills)*,# Household deposits
Slide 15: Non-Retail Lending Customer Risk Distribution (Australian Region)
Non-Retail Lending Customer Risk Distribution (Australian Region) 0% 20% 40% 60% 80% 100% 120% Mar 05 (PD) Sep 05 (PD) Mar 06 (PD) Sep 06 (PD) Mar 07 (EL) % of investment grade (Probability of Default) % of sub-investment grade (Probability of Default) % of investment grade (Expected Loss) % of sub-
Slide 16: Our Business and Private portfolio – major franchise
Our Business and Private portfolio – major franchise Lead the market, grow through innovation (eg processes, specialisation) Improve Retail customer experience through a focus on people (eg Customer First) Improve returns and leverage bank channels (eg branch referrals, protected loans) Business & P
Slide 17: Industry Specialisation
Industry Specialisation Establishment of the new specialisation business within BPA continues: Actual portfolios are now in place for Healthcare, Government and Education in Victoria with rollout through NSW about to begin. We are creating scale in the Eastern States with national roll out scheduled
Slide 18: Product innovation and Relationship Model Redesign
> Introduction of our new Investment Product and Services Group: Responsible for the distribution of alternative investment products through the business and private bank platforms. > NAB Connect – Phase 3 of our new internet based platform for conducting business related transactions. Functionality
Slide 19: Building businesses – industry specialisation
New nabeducation Established nabproperty Agri Building businesses – industry specialisation nabgovernment
Slide 20: Business owners: initial focus on business and home lending
Business Owners Borrowings Leasing Home Loan Term Loan Overdraft Initial focus on business and home lending
Slide 21: Helping our customers fulfill their aspirations
Employees (in/out) Retirement Foreign Exchange Cards Wills Internet Trusts Executors Term Loan Overdraft Funding Short / Long Term Business Owners Employees Estate Planning Insurances Goals Borrowings Company Superannuation Expansion Life Events Transactions Customers / Suppliers Banking Relationshi
Slide 22: Disclaimer
Disclaimer This document is a presentation of general background information about the Group’s activities current at the date of the presentation, 20 June 2007. It is information in a summary form and does not purport to be complete. It is to be read in conjunction with the National Australia Bank L
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