Westpac Banking Corporation · ASX:WBC
Westpac Banking — Investor Presentation (September 2015)
36 slides from Westpac Banking's investor presentation, September 2015
Slide 1: Unlocking Westpac's Potential
Unlocking Westpac’s Potential Brian Hartzer Chief Executive Officer September 2015 Westpac Banking Corporation ABN 33 007 457 141.
Slide 2: Westpac vision
Westpac vision To be one of the world’s great service companies, helping our customers, communities and people to prosper and grow 2 | Westpac Group Strategy Presentation, September 2015
Slide 3: Building on our strengths to unlock potential
Building on our strengths to unlock potential 1 Clear strategy and priorities – execution underway 2 Service is at the core of our strategy – driving customer growth and building deeper relationships 3 Digitisation is improving service and efficiency 4 Execution is key, with strong management team t
Slide 4: Strong franchise with clear comparative advantages
Strong franchise with clear comparative advantages Focus on Strategically Performance core markets well placed disciplines • Australia and New Zealand • All businesses No.1 or No.2 • Delivered ROE above 15% >97% of gross loans1 in chosen markets • Flat margins over recent • Investing in Asia where •
Slide 5: All divisions strategically well placed with growth potential
All divisions strategically well placed with growth potential Consumer Bank Business & Commercial Bank • Portfolio of brands extends potential customer base • Equal largest share of MFI business relationships1 in Australia • Growing transaction accounts supported by strength of service offer, includ
Slide 6: Banking is undergoing fundamental change
Banking is undergoing Service strategy is right fundamental change for environment • Offers and customer Customers experience must exceed demanding more expectations Digital is changing • Deliver what is valued the competitive An • Strengthen relationships landscape obsessive service Regulatory • Al
Slide 7: Service is the core of our strategy
Service is the core of our strategy One of the world’s Our goal great service companies Own a home Modernise factory Prepare for retirement Helping Protect my wealth Start a business Manage currency risks Shop overseas Collect payments Access cash when I need How Know Personalised Empower Customers
Slide 8: Our five strategic priorities
Our five strategic priorities The Service Revolution Performance Service Digital Targeted Workforce Discipline Leadership Transformation Growth Revolution Strategic Priorities Region’s One of the Best World’s 21st Building new Talent Performing Great Century Growth Factory Bank Service Bank Highways
Slide 9: New structure drives accountability & performance
New structure drives accountability & performance Consumer Commercial & Institutional BT Financial New Zealand Bank Business Bank Bank Group David McLean George Frazis David Lindberg Lyn Cobley Brad Cooper Customer and Business Services Technology Enterprise functions 9 | Westpac Group Strategy Pres
Slide 10: Digital is transforming our business
Digital is transforming our business Adapting network to customer needs Leading mobile capability Instant account opening 1 As at 1H15. 10 | Westpac Group Strategy Presentation, September 2015
Slide 11: Drive expense to income ratio below 40%
Drive expense to income ratio below 40% Global peer comparison of expense to income ratios1,2 (%) 62.4 62.0 64.2 60.3 50.6 45.6 45.7 45.1 44.0 42.8 42.5 US regional Canada Europe UK Korea NAB Hong Kong ANZ Singapore CBA WBC Programs of work to drive efficiency Optimise Digitise Transform New operati
Slide 12: Technology a key enabler of our service strategy
Technology a key enabler of our service strategy Strong technology foundations • World class online and mobile capability, with digital creating significant opportunities • Stronger, more resilient infrastructure, with significant efficiency opportunities • Clear road map with improved technology te
Slide 13: Unlocking Westpac's Potential
Unlocking Westpac’s Potential Dave Curran Chief Information Officer September 2015 Westpac Banking Corporation ABN 33 007 457 141.
Slide 14: Step change in technology will provide significant benefits and improved efficiency
Step change in technology will provide significant benefits and improved efficiency • With market leading front-end systems, we are focused on the development of the Customer Service Hub • Aligns technology architecture to service strategy ‒ Enables single bank solutions while delivering multi-brand
Slide 15: Evolution of technology has significant implications for banks
Evolution of technology has significant implications for banks Compute Network Social Mobile IT Services Storage (SOA) Analytics Cloud Implications Shorter Readily Significant Disruption Flexibility in challenges & system accessible efficiency architecture opportunities lifecycles base services oppo
Slide 16: Building on strong technology foundations
Building on strong technology foundations Current position Unlocking Westpac’s potential Next • Single Customer Service Hub • World class online and generation across the Group (Aust.) mobile capability customer • Customer as the architectural • Modern wealth platform experience focal point • Severi
Slide 17: Customer focussed approach to technology transformation
Customer focussed approach to technology transformation Today Next steps Assisted Unassisted Omni-channel Channels (customer interface) Westpac Customer Service Hub St.George Group BT Customer Westpac St.George Group BT * Westpac St.George Group BT Systems of record Pano- rama Westpac St.George BT C
Slide 18: Customer Service Hub: starts with wealth and home ownership
Customer Service Hub: starts with wealth and home ownership Channels Wealth Home Everyday Other (customer interface) ownership banking products Customer Customer Service Hub Systems of record Benefits • Single wealth operating • Single origination platform across solution across brands investments,
Slide 19: Benefits of the Customer Service Hub
Benefits of the Customer Service Hub Aligns technology • Comprehensive customer profile architecture with service • Manage relationships, not products strategy • Personalised offers and relationship pricing Simplifies and • Single source of customer information standardises origination • Pre-approva
Slide 20: The efficiency opportunity in technology infrastructure
The efficiency opportunity in technology infrastructure Consolidate technology • Rationalise and remove duplication infrastructure across brands • One infrastructure – multiple brands • Increased speed, agility and reliability Leverage Cloud • Reduced cost based infrastructure • Faster access to new
Slide 21: A 21st Century Bank
A 21st Century Bank for customers for employees for costs Next Personalised Comprehensive generation offers; Seamless, Lower cost sales understanding of customer multi-channel and service customers experience experiences Best in class Common and Faster settlement Reduced operational and time-to-yes
Slide 22: Unlocking Westpac's Potential
Unlocking Westpac’s Potential Peter King Chief Financial Officer September 2015 Westpac Banking Corporation ABN 33 007 457 141.
Slide 23: Starting from a position of strength
Starting from a position of strength • Loan growth sound • Customer margins flat in recent • Household deposits ahead of halves system1 • ROE 15.8%6 • FUM up 26%, FUA up 17%2 • Westpac Group sector leading • Bank of Melbourne success, customers with wealth product at growing above system3 Growth Ret
Slide 24: Focus on efficiency
Focus on efficiency • Driving expense to income ratio below 40% over next 3 years • Efficiency program supported by four programs of work to – Reduce expense growth run-rate to 2-3% p.a.1 – Create headroom for increased investment • Disciplined performance management, including improving divisional
Slide 25: Productivity track record
Productivity track record $1.4bn saved from efficiency programs since FY09 ($m) 113 1,439 219 Average $221m p.a. 225 238 289 212 143 FY09 FY10 FY11 FY12 FY13 FY14 1H15 FY09-1H15 cumulative Westpac Group expense to income ratio (%) 41.2 41.5 41.1 41.2 41.6 40.1 Target sub 40% FY09 FY10 FY11 FY12 FY13
Slide 26: Efficiency program supported by four streams of work
Efficiency program supported by four streams of work Optimise Digitise Transform New operating channels processes technology model • Migrate more activity • Transform home • Consolidate • Reduce duplication to digital (cashless & ownership technology across brands cheque-less) experience infrastruct
Slide 27: Directing more investment to growth & productivity
Directing more investment to growth & productivity Composition of investment spend (%) 1.20 0.94 1.15 1.07 1.30 # $bn investment spend 12 12 11 24 Other technology 18 32 46 44 SIPs 45 34 28 Growth & productivity 22 26 32 14 Regulatory change FY11 FY12 FY13 FY14 FY16-FY181 Composition of investment W
Slide 28: Disciplined performance management
Disciplined performance management • Increased executive time devoted to program delivery Re-aligning • New operating model creates clearer decision rights and full accountability financial accountability ‒ Encourages process best practice and standardisation • Improved project management discipline
Slide 29: Other recent developments
Other recent developments • Stressed assets down 5bps to 1.07% in 3Q15 • Most new stress related to mining and low commodity prices Asset quality • Mortgage delinquencies little changed – higher in WA/Vic; lower in NSW • New impairments remain relatively low, although write-backs are reducing Invest
Slide 30: The financial equation
The financial equation 1 Drive expense to income ratio below 40% 2 Targeting expense growth of 2-3% p.a. 3 Increase productivity savings to $270m p.a., up 20% Increase investment spend by $0.2bn to around $1.3bn 4 to accelerate digitisation 30 | Westpac Group Strategy Update – September 2015
Slide 31: Unlocking Westpac's Potential
Unlocking Westpac’s Potential Brian Hartzer Chief Executive Officer September 2015 Westpac Banking Corporation ABN 33 007 457 141.
Slide 32: Well positioned for our third century
Well positioned for our third century 1 Service as a comparative advantage; right team to deliver 2 Transforming the business using technology 3 Strong franchise + new capabilities = substantial room to grow 4 Targeting ROE above 15% & expense to income ratio below 40% 5 Confident we can take Westpa
Slide 33: Unlocking Westpac's Potential - Appendix
Unlocking Westpac’s Potential Appendix September 2015 Westpac Banking Corporation ABN 33 007 457 141.
Slide 34: Westpac Group executive team
Westpac Group executive team Brian Hartzer CEO Lyn Cobley Brad Cooper David Lindberg David McLean George Frazis Philip Coffey Group Executive Chief Executive Group Executive Chief Executive Group Executive Deputy CEO Westpac Officer Commercial & Officer Consumer Bank Institutional Bank BTFG Business
Slide 35: Investor Relations Team
Investor Relations Team Equity Investor Relations For further information on Westpac Andrew Bowden Leigh Short www.westpac.com.au/investorcentre click on ‘Analyst’s Centre’ Head of Investor Relations Senior Manager • Annual reports +61 2 8253 4008 +61 2 8253 1667 • Presentations and webcasts andrewb
Slide 36: Disclaimer
Disclaimer 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 be relied upon as adv
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