Commonwealth Bank Of Australia · ASX:CBA
Commonwealth Bank Of Australia — Non-Deal Roadshow (July 2004)
45 slides from Commonwealth Bank Of Australia's roadshow presentation, Jul 1, 2004
Slide 1: Roadshow Presentation London 28-29 June 2004
Roadshow Presentation London 28-29 June 2004 David Murray CEO Commonwealth Bank of Australia
Slide 2: Disclaimer
The material that follows is a presentation of general background information about the Bank's activities current at the date of the presentation, 28 June 2004. It is information given in summary form and does not purport to be complete. It is not intended to be relied upon as advice to investors or
Slide 3: Speaker's Notes
Speaker's Notes Speaker's notes for this presentation are attached below each slide. To access them, you may need to save the slides in PowerPoint and view/print in "notes view."
Slide 4: Agenda
Agenda Economy Highlights of Half Year Result to 31 December 2003 Progress Update 19 May 2004
Slide 5: Economy
Economy ve Which Bank ConmonwealthBark Y
Slide 6: Economic Environment
Economic Environment Source: RBA, OECD. Source: RBA Australia United States AUSTRALIA: HOW WE COMPARE (the last 10 years)
Slide 7: Credit growth expected to moderate
Credit growth expected to moderate Source: RBA. The most recent data point is for March 2004.
Slide 8: Highlights of Half Year Result to December 2003
Highlights of Half Year Result to 31 December 2003
Slide 9: Highlights of Half Year Result
Highlights of Half Year Result Good result: underlying profit growth of 17% to $1,487m Another record dividend: 79 cents per share Productivity improvement in all businesses Further improvement in credit quality Continued strengthening of Tier 1 capital Which new Bank meeting early expectations Shar
Slide 10: May 2004 Quarterly Progress Update on Which new Bank
The following slides comprised the 19 May 2004 Quarterly Progress Update on Which new Bank
Slide 11: Overview
Overview Our achievements over the past three months - on schedule Our progress - gathering momentum Our people - willing to change Our customers - strengthening their relationships with us
Slide 12: Which new Bank highlights
Which new Bank highlights We will complete all major June 2004 milestones as planned Moving from design to implementation of our most important activities We expect to deliver 2003/04 spend within planned investment 2003/04 benefits are likely to exceed targets Emphasis is now on delivering 2004/05
Slide 13: Today's agenda
Today's agenda Program status Drivers for success Video presentation
Slide 14: Three themes to our service transformation
Service/Sales Effectiveness IT Enablers Distribution Efficiency Product Simple processes 'To excel in customer service' Customer service via Engaged people Supported by Through Reminder: There are three themes to our service transformation Performance Culture Support Process/product IT Efficiency Pu
Slide 15: Financial impact and outcomes
Reminder: Financial impact and outcomes Over the next three years we will: Redirect the normal project spend of $600m Spend an additional $620m Invest a further $260m in our branch network Over the next three years this will result in: Cash EPS growth exceeding 10% CAGR 4-6% CAGR productivity improv
Slide 16: Moving from design to implementation
Moving from design to implementation of our most important activities Which new Bank program set up Implementation of major initiatives Ensure sustainable transformation Capture early opportunities Design of major initiatives Sep 03 Jun 04 Jun 05 Jun 06 $ 200m $ 620m $900m Planned net benefits* * Pr
Slide 17: Progress report on workstream activities
Progress report on workstream activities: June 04 now locked away Done Done Done Segment Alignment Advice Implementation Service and Sales Divisional Service and Sales Infrastructure Single Service View (CommSee) Distribution Optimisation Distribution Efficiency Branch Refurbishment Product Bundling
Slide 18: We will complete all major June milestones as planned
We will complete all major June 04 milestones as planned 1. Centre for Adviser Development - launch 2. Service & Sales Management - 13,000 staff 3. Branch sales effectiveness training - over 3,000 staff 4. CommSee - Launch in Tasmania 5. Branches - refurbish 125 6. Business banking redesign - comple
Slide 19: Investment spend within planned investment
People Themes April YTD ($m) Customers Processes Branch Refurbishment Total FY04 Estimate ($m) 270 280 10 560 100 660 We expect to deliver 2003/04 spend within planned investment 510 310 FY05E ($m) FY06E ($m) 220 205 0 425 85 130 95 0 225 85 2004, 2005 and 2006 estimates are as disclosed in Septembe
Slide 20: Benefits likely to exceed targets
Themes April YTD ($m) FY04 Estimate ($m) Customers Processes People Total 145 55 0 200 2004 benefits are likely to exceed targets FY05E ($m) FY06E ($m) 360 260 620 0 495 405 900 0 2004, 2005 and 2006 estimates are as disclosed in September 2003 Which new Bank presentation 132 56 0 188
Slide 21: Today's agenda
Today's agenda Program status Drivers for success Video presentation
Slide 22: Good progress on key initiatives
We are making good progress on key customer, people and process initiatives No. 2 - Service and Sales Management No. 4 - CommSee No. 9 - Performance Culture Program No. 10 - World Class Processing Principles (CommWay) No. 11 - Home Loan End to End Process People Customer
Slide 23: Service and Sales Management
No. 2 - Service and Sales Management Service and sales meeting each week for all staff Training is tailored for specific client segments Bank-wide approach to referrals Service and sales processes reinforced through measurement, incentives, reporting, awards and recognition
Slide 24: Results of national retail implementation
No. 2 - Service and Sales Management Results of national retail implementation Cross Sales Ratio* Product Sales per Staff Member * Cross sales ratio is a measure based on the number of additional products at the opening of a new Transaction or Savings account.
Slide 25: CommSee
No. 4 - CommSee CommSee chosen as Bank-wide service and sales solution Prototype went live in Tasmania in February Staff and customers are positive signatures and documents imaged all customer interactions recorded leads and referrals tracked Developing a new unified front end platform Prototype wil
Slide 26: CommSee Rapid Implementation Schedule
0 200,000 400,000 600,000 800,000 1,000,000 Oct-03 Dec-03 Dec-04 Feb-05 National Rollout Tasmania PFS CommSec (Advisory Clients) Customers No. 4 - CommSee Rapid Implementation Schedule Customers
Slide 27: Performance Culture Program
Source: Staff Survey May Staff are positive about Which new Bank No. 9 - Performance Culture Program No. 9 - Performance Culture Program
Slide 28: World Class Processing (CommWay)
No. 10 - World Class Processing (CommWay) Developed a CBA-owned, permanent approach to continuous improvement of processes and operations Combines proven business improvement elements from Six Sigma & Lean Processing methodologies Five pilots in operation across the Bank Initial focus on volume proc
Slide 29: World Class Processing (CommWay) results
No. 10 - World Class Processing (CommWay) Source: CBA Operations Processing Centre data Day 1 cheque processing: Sydney 25% process improvement over baseline Translates to 15% productivity improvement %
Slide 30: Home Loan End to End
No. 11 - Home Loan End to End Significant processing, turnaround and service improvements Forthcoming changes focused on back end processing Enhanced service offering through recent product changes Improvements underpinning increased customer loyalty
Slide 31: Home Loan End to End results
No. 11 - Home Loan End to End *Indexed to average of 6 months to end of October 2003. *Indexed to average of 6 months to end of October 2003.
Slide 32: Strength of relationship is increasing
Strength of relationship is increasing Strength of Relationship Score Time Time
Slide 33: Market shares are stable
Market shares are stable Home loans - holding our strong position in prime market, with small involvement in low documentation loans Deposits - holding market share and competing well with niche players Business Lending - stable market share with good underlying momentum in all segments Managed Inve
Slide 34: Customer intelligence
Customer intelligence Extensive review of existing research 22 additional focus groups External Intelligence Interviews with experts in 14 countries Creativity workshops on non-banking models Internal Intelligence Interviews with frontline staff Extensive syndication with PFS, RBS, IIS, IBS Close co
Slide 35: Segment Alignment - Extensive Customer Research
Segment Alignment - Extensive Customer Research The message is that customers: Are comfortable having differing product and service needs met through different models Want expectations on simple needs met before entrusting with complex needs Have complex needs that are mainly shaped by the stage of
Slide 36: Segment Alignment - Proposed model
Segment Alignment - Proposed model through the customer's eyes Simple needs Frontline staff can resolve most issues on the spot, particularly on "pain threshold" issues Bank fulfils basic service requests efficiently and with minimal errors No difference from most customers Complex needs Specialist
Slide 37: Simplified Structure
Simplified Structure CEO - David Murray Retail Banking Services Group Executive: Hugh Harley Premium Business Services Group Executive: Michael Katz Insurance & Investment Services Group Executive: Stuart Grimshaw International Financial Services Group Executive: Garry Mackrell Financial & Risk Mana
Slide 38: Today's agenda
Today's agenda Program status Drivers for success Video presentation
Slide 39: Which new Bank summary
Which new Bank summary We will complete all June 04 milestones as planned Moving from design to implementation of our most important activities We expect to deliver 2003/04 spend within planned investment 2003/04 benefits are likely to exceed targets Emphasis is now on delivering 2004/05 and 2005/06
Slide 40: Supplementary material
Supplementary material ea Which Bank Conmonweatthaak <y 41
Slide 41: Which new Bank milestones
Which new Bank milestones Service & Sales management - 30,000 staff 'One Team' referral process - implement Service & Sales management - 13,000 staff Branch sales effectiveness - 3,000 staff Centre for Adviser Development - launch Service models - align Advice Model - implement CommSee - Launch in T
Slide 42: Investments & Benefits
Investments & Benefits (1) Estimated benefits are recurring and continue to grow beyond 2006. They are comprised of 50% cost savings and 50% revenue improvement. Investment Analysis ($m) 2004 2005 2006 Total 2004-06 Estimated Investment Spend Initiatives 570 425 225 1,220 Branch refresh 90 85 85 260
Slide 43: Impact on Annual Profit
Impact on Annual Profit (excluding all benefits and amortisation) ($m) Total Spend 2004 2005 2006 Total 200 Software capitalised 90 72 38 200 260 Branch refurbishment 90 85 85 260 1,020 210 Provision 0 133 77 210 1,480 810 Expensed 480 220 110 810 Total spend 660 510 310 1,480 Impact on Profit 2004
Slide 44: Investment spend
Investment spend $100m+ $0-49m $50-99m Total ($m) FY04 FY05 FY06 Themes Sales and service effectiveness Product offering Distribution efficiency Customers IT enablers Product and process simplification Support Purchasing/property IT efficiency Performance culture Processes People 425 225 570 Branch
Slide 45: Benefit analysis
Benefit analysis Total ($m) Revenue Cost saving FY04 FY05 Themes Sales and service effectiveness Product offering Distribution efficiency Customers IT enablers Product and process simplification Support redesign Purchasing/property IT efficiency Performance culture Processes People FY06 $100m+ $0-49
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