Bendigo & Adelaide Bank Ltd. · ASX:BEN
Bendigo & Adelaide Bank — H1 2015 Earnings Presentation
49 slides from Bendigo & Adelaide Bank's earnings presentation, Feb 16, 2015
Slide 1: Results Presentation for the half year ended 31 December 2014
Bendigoand > AdelaideBank miBanker Neil Excel Results Presentation For the half year ended 31 December 2014 Mike Hirst Richard Fennell Managing Director Chief Financial Officer
Slide 2: For personal use only
This document is a presentation of general background information about the Group’s activities current at the date of the presentation. It is information in a summary form and no representation or warranty is made as to the accuracy, completeness or reliability of the information. It is to be read i
Slide 3: Agenda
For personal use only Overview Financial performance Summary and outlook Appendices Agenda 3
Slide 4: Overview
For personal use only Mike Hirst Group Managing Director Overview 4
Slide 5: Our half year result
Our half year result For personal use only Financial performance - statutory profit after tax Financial performance - cash basis earnings Statutory profit after tax $227.3m Cash earnings of $217.9m Benefit from tax issue finalisation and Cuscal investment Cash earnings per share 48.1¢ Inte
Slide 6: First half growth outcome
First half growth outcome For personal use only Source: APRA/RBA statistics December 2014 1. Data is based on 6 month growth (annualised) Overview 6
Slide 7: Excess repayments remain high
Excess repayments remain high For personal use only Amortisation of back book impacting net growth, with a 20% increase in excess repayments half on half Seasonality continues to be evident in loan growth Residential approvals up on prior corresponding period 1. Adjustment to Jun-14 loan growt
Slide 8: Great Southern
Great Southern The Supreme Court of Victoria approved the terms of For personal use only settlement of all class actions brought by investors in Great Southern managed investment schemes Borrowers acknowledged that their loan deeds are valid and enforceable BEN waived accrued but unpaid defaul
Slide 9: Positioned for a fast changing environment
Positioned for a fast changing environment Economic Market For personal use only - Employment - Low growth - Low interest rate - Competitive dynamics - Confidence - Consumer propensity to reduce debt - Ageing population - Level playing field - Continued wealth investment - Customer advocacy and staf
Slide 10: Unique and valued customer proposition
Unique and valued customer proposition Ranked number one ASX listed Bank for Retail and For personal use only Business customer satisfaction1,2 Business bank of the year3 for 2011, 2012, 2013 and all 11 months awarded for 2014 Voted one of Australia’s most trusted brands4 Listed in BRW’s Top
Slide 11: Find us in the App store
Find us in the App store For personal use only Consumer responsive Mobile technology Disposable solutions Innovation through partnering Overview 11
Slide 12: Find us in the App store
Find us in the App store • New EasySaver account • Launched mid 2014 • BRW top 50 most innovative companies For personal use only • 35% of accounts opened are • 1,600 merchants new customers • Finovate Europe 2015 • Convenient, mobile and easy • 75% domiciled to a branch to use • Apple Pay alternati
Slide 13: Financial performance
For personal use only Richard Fennell Chief Financial Officer Financial performance 13
Slide 14: At a glance
At a glance Change Change 1H15 2H14 1H14 1H15 vs 2H14 1H15 vs 1H14 For personal use only Cash earnings $217.9m $196.4m $185.9m 10.9% 17.2% Statutory NPAT $227.3m $191.6m $180.7m 18.6% 25.8% Cash EPS 48.1¢ 46.5¢ 45.0¢ 3.4% 6.9% Net interest margin 2.24% 2.24% 2.23% - 1 bps Expense to income ratio 55.
Slide 15: Solid cash earnings growth
Solid cash earnings growth Margin maintained despite competitive environment For personal use only Solid contribution from Homesafe portfolio Wage inflation and project / technology investment driving higher cost base RFC improved margin and increased costs Improving credit outcome Financi
Slide 16: Positive earnings momentum
Positive earnings momentum For personal use only Financial performance 16
Slide 17: Net interest margin
Net interest margin Flat NIM reflects disciplined approach to pricing in a For personal use only competitive environment Negative impact of 8bps due to heightened lending competition 3bps positive impact to the asset mix largely driven by RFC acquisition 2H15 will include costs of committed
Slide 18: Flexible funding structure
Flexible funding structure Leveraging core strengths of the retail brand and For personal use only network $600m RMBS issue in December 2014 Strong growth in at-call across a range of Retail deposit products Basel III liquidity transition successfully completed Financial performance 18
Slide 19: Flat 'JAWS' – increased investment
Flat ‘JAWS’ – increased investment For personal use only Cost impacts — RFC — Wage inflation — Investment in Wealth segment Financial performance 19
Slide 20: Continued investment in Basel II & new technology
Continued investment in Basel II & new technology Three streams complete For personal use only Business banking back book re-rating undertaken Models show low risk profile External validation of models underway FSI recommendations impact unclear Capitalised software balance increased pri
Slide 21: Strong capital position
Strong capital position Basel III CET1 ratio increased to 8.14% For personal use only Total capital increased to 12.19%, with $292m of additional Tier 1 capital issued in October $600m RMBS provided capital and funding benefit 1 1 1. Shows pro-forma impact to capital adequacy of the Rural Fina
Slide 22: Business segment performance
Business segment performance For personal use only 1. Graphs refer to operating segment performance on p40 in 4D, excludes central functions. Financial performance 22
Slide 23: Rural Finance integration
Rural Finance integration Realising integration synergies ahead of original For personal use only expectations Customer engagement not disrupted by integration Consolidation of Agri relationship managers strengthens customer reach Jun-14 Dec-14 Financial performance 23
Slide 24: Homesafe investment property portfolio
Homesafe investment property portfolio For personal use only Asset growth driven by: New business (properties acquired) Portfolio revaluation (income contribution) □ Change in property prices – residex index increase for 6 months1; Melbourne +3.4% Sydney +9.1% □ Ageing of portfolio Gross
Slide 25: Bad and doubtful debts
Bad and doubtful debts Portfolio remains well secured, with low LVR’s For personal use only RFC acquisition resulted in $8.5m increase in GRCL and $3.2m increase in Collective provision, as expected from due diligence Bad and doubtful debts expense was $30.1 million, 1 down 29.5% on the prior
Slide 26: Arrears – days+
Arrears – 90 days+ For personal use only Financial performance 26
Slide 27: Summary and Outlook
For personal use only Mike Hirst Group Managing Director Summary and Outlook 27
Slide 28: Summary and outlook
Summary and outlook For personal use only 1 Well positioned 2 A level playing field in prospect 3 Continue to consider acquisitions and alliances with a strategic fit 4 Margin management in a low rate, low growth environment 5 Investments in technology 6 FSI or Basel Committee will impact all Banks
Slide 29: Questions
For personal use only Questions 29
Slide 30: Appendices
For personal use only Appendices 30
Slide 31: A portfolio of diverse businesses
A portfolio of diverse businesses Business Segment For personal use only Domestic bank operating five • Challenges through continued regulatory change distinct brands • Unique community, customer, and partner proposition • #1 banking brand for customer and business satisfaction, and advocacy Consume
Slide 32: Retail banking
Retail banking Leading Consumer and Business satisfaction ratings For personal use only Strong focus on Customer strategy execution Increase in NII achieved through strong growth in at-call funds and pricing of term deposits Highly competitive lending market EasySaver deposit product launc
Slide 33: Third party banking
Third party banking Investment in third party lending systems upgrades For personal use only delivering benefits Market conditions remain highly competitive, especially in the broker channel Commenced replacement of loan processing system Funding facilities approved for 17 credit unions 1. G
Slide 34: Wealth
Wealth Margin lending portfolio stabilised For personal use only Smart Start Super continues strong performance with a 36% increase for the half Solid performance in Managed Funds over the half with growth of 12% Margin lending average LVR 29.4% 77% of portfolios held ≥ 4 stocks 2 1. Gra
Slide 35: Agri-business
Agri-business Underlying improvement in Rural Bank operating For personal use only performance RFC contribution in line with expectations Continued reduction in Rural Bank non-performing loans Business well positioned for medium term growth opportunities 1. Graph refers to operating segment
Slide 36: Diverse geographic footprint
Diverse geographic footprint 1765 ATM’s 526 branches For personal use only 1 4 8 0 4 140 348 51 46 76 53 13 3 43 7 1 2 1 100 4 91 24 13 112 231 16 50 16 8 4 422 883 192 87 48 59 141 11 685 307 Community Bank® 25 1 10 10 Bendigo branded (3rd party) ATM’s 197 7 14 2 11 Appendices 36
Slide 37: The Community Bank model
The Community Bank® model 16 years old More than $130m in community grants since inception – For personal use only delivering tangible benefits for these communities and our business 307 Community Bank branches with more than 90 in communities where there is no alternative provider Proven, rel
Slide 38: Secure and low risk loan portfolios
Secure and low risk loan portfolios For personal use only Residential Mortgages3 Dec-14 Jun-14 Dec-13 98.3% secured Owner occupied 65.0% 65.1% 64.9% Investment 35.0% 34.9% 35.1% Lo Doc 3.4% 3.9% 4.5% 97.8% secured by mortgages and Retail mortgages 52.1% 52.0% 53.7% listed securities Third Party
Slide 39: Specific provisions
Specific provisions For personal use only Represented by Provision as % Retail 3rd Party Business Delphi Great Rural Consumer Rural Bank Wealth BEN total of gross loans Mortgages Mortgages Lending Bank Southern Finance June 2014 0.03% 0.03% 0.23% 0.53% 0.08% 4.28% 1.04% - - 0.22% December 2014 0.05%
Slide 40: Funding
Funding For personal use only 1Company data Appendices 40
Slide 41: Contributions by segment
Contributions by segment For personal use only Note – Graphs refer to operating segment performance on p40 in 4D, excludes central functions. Appendices 41
Slide 42: RBL/RFC exposure by industry/geography
RBL/RFC exposure by industry/geography For personal use only Appendices 42
Slide 43: redy
redy For personal use only Click here to try Appendices
Slide 44: miBanker
miBanker For personal use only Click here to try Appendices 44
Slide 45: Bendigo e-banking
Bendigo e-banking For personal use only Appendices 45
Slide 46: GoPos Lite
GoPos®Lite For personal use only Appendices 46
Slide 47: Account opening online
Account opening online For personal use only Appendices 47
Slide 48: act
act For personal use only Click here to try Appendices 48
Slide 49: Contact
Analysts Media For personal use only Travis Crouch Owen Davies Head of Capital and Investor Relations Head of Public Relations Bendigo and Adelaide Bank Limited Bendigo and Adelaide Bank Limited Tel: +61 3 5485 6261 Tel: +61 3 5485 7108 Mob: +61 418 552 922 Mob: +61 418 521 817 Email: travis.crouch@
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