Bendigo & Adelaide Bank Ltd. · ASX:BEN
Bendigo & Adelaide Bank — Bendigo Bank — H1 2003 Earnings Presentation
45 slides from Bendigo & Adelaide Bank's earnings presentation, February 2003
Slide 1: Bendigo Bank Limited Half Year Results December 2002
BENDIGO BANK LIMITED Half Year Results December 2002
Slide 2: Presenters
Presenters Craig Langford Greg Gillett Rob Hunt
Slide 3: Financial result
Financial result Craig Langford Chief Financial Officer
Slide 4: Building sustainable performance
Building sustainable performance Profit increased by 30% to $25.4 million Earnings per share increased by 21% to 20.3 cents Interim dividend up 1.5 cents to 13.5 cents Excellent credit quality
Slide 5: Performance summary
Performance summary $Millions Dec-01 Dec-02 Net Profit after Income Tax 19.5 25.4 Return on Average Assets 0.54% 0.62% Return on Average Equity 8.8% 9.90% Earnings per Share - cents 16.8 20.3 Expense to Income Ratio 73.5% 73.20% 1/2Year end Assets 7,521 8,316 1/2 Year end Capital 465 529 General Pro
Slide 6: Operating profit - after tax
Operating profit - after tax A$ Millions 30 25.4 19.5 20 15.6 10 0 Dec-00 Dec-01 Dec-02
Slide 7: Net interest margin
Net interest margin % 2.80 2.79 2.78 2.76 2.74 2.74 2.74 2.72 2.70 2.68 2.67 2.67 2.66 2.64 2.62 2.60 Jun-99 Jun-00 Jun-01 Jun-02 Dec-02
Slide 8: Non interest income
Non interest income As at 31 December 2002 17% 7% 4% 5% 9% 11% 28% 3% 16% Loan Fees Deposit A/c & Transaction Fees Fees - Other Commissions - Insurance Commissions - Other Trustee, management & other services Securitisation Share of associates net profit/(loss) Other
Slide 9: Elders Rural Bank
Elders Rural Bank • 15% increase in contribution • Loans increased 27% to $1.2 billion • Solid retail funding base • Loan quality remains excellent A$ Million Profit Contribution 5.0 4.7 4.5 4.2 4.0 3.5 3.0 2.5 2.2 2.0 1.5 1.0 0.5 0.0 Dec-00 Dec-01 Dec-02
Slide 10: Community Bank contribution
Community Bank contribution As at 31 December 2002 A$ Millions 4 3.2 3 2 1.6 1 0.8 0 Dec-00 Dec-01 Dec-02
Slide 11: Operating expenses
Operating expenses 9% 5% 8% 5% 2% 24% 47% Salaries & staff related costs Occupancy Information technology costs Management fees & expenses Depreciation/amortisation Goodwill amortisation Other operating expenses
Slide 12: Efficiency ratio
Efficiency ratio Operating expenses / income % 74 73.5 73.2 73 72 71 70.7 70 69 Dec-00 Dec-01 Dec-02
Slide 13: Total assets
Total assets A$ Millions 10,000 2,508 2,014 8,000 1,538 6,000 4,000 8,316 6,888 7,520 2,000 0 Dec-00 Dec-01 Dec-02 On Balance Sheet Managed
Slide 14: Lending approvals
Lending approvals A$ Millions 3,000 2,173 1,900 2,000 1,068 1,000 0 Dec-00 Dec-01 Dec-02
Slide 15: Retail deposits
Retail deposits A$ Millions 8,000 6,998 7,000 6,074 5,173 6,000 5,000 4,000 3,000 2,000 1,000 0 Dec-00 Dec-01 Dec-02
Slide 16: Commercial loans
Commercial loans As at 31 December 2002 3% 3% 2% 2% 2% 4% 5% 22% 5% 6% 10% 36% Property & business services Retail trade Construction Agriculture, forestry & fishing Accom, cafes & restaurants Manufacturing Health & community service Finance & insurance Wholesale trade Communication services Transpo
Slide 17: Geographic spread of loans
Geographic spread of loans As at 31 December 2002 11% 3% 14% 3% 4% 3% 62% VIC NSW ACT QLD SA WA TAS
Slide 18: Geographic spread of deposits
Geographic spread of deposits As at 31 December 2002 8% 16% 2% 4% 1% 5% 64% VIC NSW QLD SA WA TAS OS/OTHER
Slide 19: Core retail deposit base
Core retail deposit base Funding mix % 100 7 95 10 16 90 85 80 75 93 70 90 84 65 60 55 50 Dec-00 Dec-01 Dec-02 Retail Wholesale
Slide 20: Return on equity
Return on equity % 10 9.9 10 9 8.7 8.8 9 8 Dec-00 Dec-01 Dec-02
Slide 21: Earnings per share
Earnings per share cents 25 20.3 20 16.2 16.8 15 10 5 0 Dec-00 Dec-01 Dec-02
Slide 22: Capital adequacy
Capital adequacy Tier one capital remains strong. Slightly above the targeted mix of 8.0% tier one and 2-3% tier two 12 % 10 2.48 2.56 2.07 8 Tier 2 6 8.88 8.83 8.57 Tier 1 less 4 deductions 2 0 Dec-00 Dec-01 Dec-02
Slide 23: Non-accrual loans
Non-accrual loans $A Millions 40 37.3 35 30 25.8 25 27.1 20 19.3 15.5 15 5.7 10 5 10.2 9.8 6.5 0 Dec-00 Dec-01 Dec-02 Specific Provision Net Non Accrual
Slide 24: Provision for doubtful debts
Provision for doubtful debts A$ Millions 60 50 10.1 40 30 11.3 7.9 20 39.6 10 21.1 23.8 0 Dec-00 Dec-01 Dec-02 General Specific
Slide 25: Asset quality
Asset quality Impaired loans / total assets % Asset quality continues to improve 0.70 0.62 0.60 0.50 0.50 0.40 0.30 0.26 0.19 0.20 0.10 0.00 Jun-00 Jun-01 Jun-02 Dec-02
Slide 26: Retail bank
Retail bank Greg Gillett Chief General Manager Retail
Slide 27: Retail outcomes
Retail outcomes Opened 15 Community Banks. Now: 43 Vic. 21 W.A. 15 NSW / ACT 4 Qld 4 S.A. Opened 5 company owned branches (all in Sydney). Now: 70 Vic. 50 Qld 9 NSW / ACT 5 Tas. 1 W.A. 1 S.A.
Slide 28: Retail outcomes
Retail outcomes Appointed 10 financial planners to Queensland network Appointed 11 additional business bankers Customer numbers growing 12% pa Business volumes growing 18% pa
Slide 29: Customer transaction volumes per month by channel
BBL CUSTOMER TRANSACTION VOLUMES PER MONTH BY CHANNEL (Jul 99 to Dec 02) 1,600,000 1,500,000 1,400,000 1,300,000 1,200,000 1,100,000 1,000,000 900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 - Jul-99 Aug-99 Sep-99 Oct-99 Nov-99 Dec-99 Jan-00 Feb-00 Mar-00 Apr-00 May-00 Jun-00
Slide 30: Remainder of year
Remainder of year 15 Community Banks to open Strong deposit inflow expected to continue Demand for housing finance expected to fall slightly but we are confident of reaching year growth target regardless
Slide 31: Summary: a unique bank
Summary: a unique bank Only regionally based bank Growing network Track record in growing new markets (both sides of the balance sheet) Strong community and regional focus Bright prospects for volume and customer growth Skilled in managing change and integrating new businesses
Slide 32: Strategy
Strategy Rob Hunt Managing Director
Slide 33: Key strategies over many years
Key strategies over many years Develop a unique position and brand Build and broaden national distribution capability Build capacity of our buyers (and their inclination to buy from Bendigo Group) Broaden the range of solutions Develop our structure and skill base to ensure it aligns with our custom
Slide 34: Creating shareholder value
Creating shareholder value Rapidly expanding our distribution network and product range Growing the revenue base sustainably (commitment from buyers) Progressively building profitability Establishing a strong brand, market positioning and point of difference Doing the “right thing” and great busines
Slide 35: Creating shareholder value
Creating shareholder value Progressively building demand Aligning objectives with our buying base and strengthening their commitment to buy from us Building relationships (multiple purchases) and therefore more loyal business Improving efficiency Continuing investments in revenue generation activiti
Slide 36: Value created
Value created Over the past 3 years Bendigo Bank has produced solid growth in shareholder value . . . Maintaining this momentum improves the prospect of further increasing value as the performance improves . . . (as planned)
Slide 37: Highlights
© Bendigo Bank
Slide 38: First-half successes
First-half successes Improved profit performance by 30% Increased distribution network and interstate representation Increased earnings per share and dividend payment Strong retail deposit growth Solid lending and growth in assets under management
Slide 39: First-half successes
First-half successes Improved contribution from businesses established over past 3 years Implemented & expanded new Wealth Management structure & product range Strong asset quality performance Continued community enhancement activities (building demand) Increased e-Bank usage Strong contribution fro
Slide 40: Investments continue
Investments continue … to maintain strong revenue growth 91 branches to 227 branches over past 3 years 21 branches in past 6 months Alliances and Joint Ventures NSW developments Community Bank expansion 5 branches in Sydney Plus development over next few years Expansion and implementation of Wealth
Slide 41: Investments continue
Investments continue … to maintain strong revenue growth Group-wide Shaping to Grow exercise Expensed during first 6 months Implementing improvements in 2nd half Establishment of Community Sector Banking structure and operation Continued growth in our skill base Enhanced business banking capability
Slide 42: Looking forward
| Looking forward © Bendigo Bank
Slide 43: Why progress will continue
Why progress will continue Differentiated brand (unique style) Strong growth and demand Relevant business & community solutions New businesses increasing contribution 50% of BBL branches under 3 years old (Elders Rural Bank, Community Bank, Guild Banking, Tasmanian Banking Services, Community Sector
Slide 44: Bendigo's proven ability to …
Bendigo’s proven ability to … Integrate other businesses Form and run alliances and partnerships Grow our base faster than system growth Create innovative solutions Unite, engage and involve communities and discrete customer bases and generate strong buyer demand and commitment In effect . . . build
Slide 45: Future
Future Continued growth in distribution network Another 35-plus branches New communities & customer groups Growing national presence Roll-out of Wealth Management Expanded capability in business banking Strong growth in e-banking Solid increase in revenue base expected Steady improvement in profitab