Bendigo & Adelaide Bank Ltd. · ASX:BEN
Bendigo & Adelaide Bank — H1 FY2007 Earnings Presentation
36 slides from Bendigo & Adelaide Bank's earnings presentation, Feb 12, 2007
Slide 1: yo La
a : Le yo La Beer: as . Le DO : i a Cg y oo y ye : : i i < aay ; Le ; ie a y a ee a SUE RIA SL Coe o - EEE Sie () Bendigo Bank
Slide 2: Agenda
Agenda Craig Langford chief Financial officer The resutt Mike Hirst chier Operating Officer The next growth phase Rob Hunt Managing Director Brand strategy is delivering nm 2007 interim profit announcement © Bendigo Bank “na?
Slide 3: The result
The result ~ Craig Langford chier Financial officer 2007 interim profit announcement © Bendigo Bank “na?
Slide 4: Consistent, reliable earnings growth
Consistent, reliable earnings growth Profit “AS Millions © Underlying earnings 76.8 90.9 18.4% Dividend (interim) cents 22.0 : BAQ Occ 84% Cash basis profit 48.4 55.4 14.5% Cash earnings per share. cents. 347° 39.0. “12.4% 97 interim profit announcement z Bendigo Bank
Slide 5: Profit analysis
Profit analysis Cash basis earnings -AS Millions Nom-interest income Bad debts Expenses Net interest $9.9m ($1.8m) — (§47.7m) income $22,.0m | | Tax Riad 6m) 7 interim profit announcement Preference Share Dividends ($1.0m) Other non-cash items ($0.2m) 555.4 ) Bendigo Bank
Slide 6: Quality earnings - growth at profitable prices
Quality earnings - growth at profitable prices Interest margin a 2.92 Community Bank® & Alliances 2007 interim profit announcement © Bendigo Bank “na?
Slide 7: Quality earnings - growth at profitable prices
Quality earnings - growth at profitable prices ~~ Analysis of net interest margin 9 Yo Repricing and product rix. changes 0.20% Cash to Bills spread (0.07%) AIFRS hedging Funding Mix revaluations 2.79% || (0.03%) 0.03% ee 2007 interim profit announcement
Slide 8: Consistent, measured growth
Consistent, measured growth Group managed loans / retail funds Retail funding mix “A$ Millions % 43,444 a Deze Re On balance sheet §) Managed | Retail | Minoiesate: Bendigo Bank
Slide 9: Diversification of revenue
Diversification of revenue --- Profit contributions before tax & significant items Ag Millions 16.8% Pees 200 )7 interim profit announcement €) Bendigo Bank
Slide 10: Diversification of revenue
Diversification of revenue -- Non-interest income ~§ Millons 40.2 )7 interim profit announcement €) Bendigo Bank
Slide 11: Revenue growth based on judicious investment
Revenue growth based on judicious investment Operating expenses A$ Millions lency ratio: emses/ income 94.7 Bendigo Bank
Slide 12: Growing shareholder returns
Growing shareholder returns Earnings and dividends Return on equity -cents per share % Bendigo Bank
Slide 13: Excellent credit quality
Excellent credit quality Ah Gait Gu. AS Millions < Nor-accrual loans I 43 y 2007 interim profit announcement ¢ Bendigo Bank ap
Slide 14: Strong capital position
Strong capital position Capital acequacy Adjusted common % equity ratio 10.76 10.48 ill Tier 2 14 gilt 2007 interim profit announcement oy Bendigo Bank
Slide 15: The next growth phase
The next growth phase Mike Hirst chier Operating Officer 2007 interim profit announcement © Bendigo Bank ae
Slide 16: Our proposition
Our proposition Bendigo Bank is a financial solutions distribution organisation: « ... Offering a premium service ° Providing a high value proposition; not price led «— Building relationships with consumers, SMEs and partners Engaging with communities to enhance their prospects 97 interim profit ann
Slide 17: Our progress
Our progress 2. Bendigo has: ~ a brand well regarded in the marketplace ~ highest customer advocacy” ~ customer satisfaction above 95%" ~~ grown custorner acquisition (MFI) by 30% over the past 2 years* ~ become the preferred bank for 19% of consumers looking to change their main financial instituti
Slide 18: Driving our network growth
Driving our network growth « . Structure focused on relationship sales and service « ...Qur unique branch staff training program “Being the Bendigo” continues sto roll out °- Even contribution to growth across all states * Business banking performing strongly ° Customer acquisition remains very stro
Slide 19: Wealth Management is growing
Wealth Management is growing -e o-The Wealth Solutions division ($3.3bn FUM) contributed $28m in revenue and $14m before tax six months to December 2006 >. Based on median P/E of listed wealth management companies (19 x 'O7F), Bendigo's wealth business is worth around $360m « Exposure to sector is s
Slide 20: New businesses and innovative product remain a focus
New businesses and innovative ~ product remain a focus “® -Homesafe Solutions * «Strategic Payment Systems «Generation Green and Carbon Offsets « -. Elders Rural Bank « Tasmanian Banking Services «.. Community Enterprise partnerships: ~ Banking — Telco ~— Foundation ~ Biodiesel ©) Bendigo Bank
Slide 21: What about the future?
What about the future? ° ~ One view of the industry short term : ~~ market share driven ~areturn to customer centric values ~ branches are back ~~ further commoditisation and margin contraction * In the medium term: ~ networks no longer primarily transaction based ~ trusted brand and advice is activ
Slide 22: Implications?
Implications? Ge Economics of physical networks driven by customer acquisition, retention and depth of relationship Differentiated and valued brand vital to enable higher margins Customer satisfaction and trust will be important in driving customer advocacy Ensuring staff are engaged and culturally
Slide 23: In conclusion, the Bendigo...
In conclusion, the Bendigo... “6 Has diversified the revenue base ; ~ Strongly growing network revenues ~ relevant business banking capability _ ~ Significant wealth management investment ~ investments in new and innovative businesses ~— business is progressively maturing * Is strategically strongly
Slide 24: Brand strategy is delivering
Brand strategy is delivering Rob Hunt Managing Director 2007 interim profit announcement OB Bendigo Bank
Slide 25: Journey
Journey a.“ Bendigo’s consistent approach * Branded retail strategy s.< Expanded branch network and distribution options e Expanded the product range . Expanded the skill base (fo support the larger product range) ° Sustainably growing profitability and shareholder value « Building prospects and fle
Slide 26: Strategy — Focus has been on the major business elements
Strategy — Focus has been on the major ~ business elements “2 Distribution «0 -.Product . Technology (including payments systems) * ~ Balance Sheet & Risk
Slide 27: Strategy — We set out to...
Strategy — We set out to... oe Build a brand and reputation . Build customer demand and commitment ae Increase coverage and diversity of markets serviced .. “Build customer base — relationships . Progressively bring network to maturity * Grow profit and EPS outcomes sustainably
Slide 28: Delivering on promised performance
Delivering on promised performance Demonstrated on any 5 or 10-year comparisons . Consistently achieved Guidance oe Growing profitability from strong revenue growth ° Continued to invest: ~ wealth management “.. business banking ~ distribution ~ expanding payment system participation ~ Customers Ltd
Slide 29: Half-yearly performance highlights
Half-yearly performance highlights. ~ The Result NPAT before significant item o59.9m © * Cash EPS ROE (cash basis) High quality of earnings 2007 interim profit announcement Cc) Bendigo Bank
Slide 30: Future — Prospects
Future — Prospects Doing more with existing customers Focus on quality service and customer relationships ~ community connection Further expand distribution capability Progressively add to the product range Expand the Wealth Solutions business and contribution Build business banking participation .
Slide 31: Guidance
Guidance On track to achieve our guidance of at least 10% improvement on EPS for FYO7 vitia! progres Py OS
Slide 32: Additional information
Additional information ©) Bendigo Bank
Slide 33: Funds under management
Funds under management AS Millons 3,316.6 2,951.9 25678
Slide 34: Commercial loans
Commercial loans Yeo ‘g 1 of wows Property & business services yume Retail trade sees Manufacturing Wholesale trade Finance & Insurance Education Personal & other services. Communication services: » Other mmm Construction * Health & community service Cultural & recreational services: Agriculture, fo
Slide 35: Loan portfolio
Loan portfolio ~ By purpose By security % Nen-residentlat Bendigo Bank
Slide 36: Balanced growth in new markets
Balanced growth in new markets Loans Deposits “%
Bendigo and Adelaide Bank — H1 FY2007 Earnings Presentation on 6ix