National Australia Bank Limited · ASX:NAB
National Australia Bank — Investor Day (March 2009)
31 slides from National Australia Bank's investor day presentation, Mar 12, 2009
Slide 1: National Australia Bank Strategy Briefing, 12 March 2009
12 March 2009 National Australia Bank Limited ABN 12 004 044 9371
Slide 2: Today is a strategy briefing, not a trading update
Today is a strategy briefing, not a trading update No material change from our briefing on 6 February, 2009 • Australia Banking and nabMarkets revenue continue to be strong • Revenue softness in UK/MLC continues • Cost growth at around inflation for the full year • Asset quality position continues t
Slide 3: Key points to address upfront
Key points to address upfront Dividend • External environment increasingly challenging • Important to maintain conservative settings • Reducing dividend by approximately 25% at 1H09 Costs • Continue to have strong momentum in cost management, within guidance • We are accelerating some initiatives gi
Slide 4: Observations on recent history
Observations on recent history Turnaround successful on a number of fronts Cash earnings Costs Culture Some peer-leading businesses: business banking, insurance, markets Disappointing TSR Lower ROE versus peers: UK, nabCapital and underweight retail banking (Aust) Sentiment re: transparency/surprise
Slide 5: Environment is deteriorating
Environment is deteriorating Business Confidence & Conditions Index Index 35 35 30 Quarterly Monthly 30 25 Conditions 25 20 20 15 15 10 10 5 5 0 0 -5 -5 -10 -10 -15 -15 -20 -20 -25 Confidence -25 -30 -30 -35 -35 -40 -40 Sep 08 Sep 01 Sep 02 Sep 03 Sep 04 Sep 00 Sep 05 Sep 06 Sep 07 Sep 08 Sep 07 Sep
Slide 6: Future scenarios
Future scenarios Economic 1-2 year 3+ year growth recovery recovery No Regret Imperatives: Regulatory Temporary Nationalised Response responses utilities Balance sheet strength Efficiency, quality & service Consumer Large rebound Longer term Wealth – wealth needs de-leveraging / People, culture & to
Slide 7: Balance sheet strength
Balance sheet strength Credit rating strength Access to funding Resilience in current environment Operate under conservative capital ratios Target Tier 1 ratio above 7% Reducing dividend by approximately 25% Continue to enhance funding & liquidity Strong growth in customer deposits 2009 term funding
Slide 8: Efficiency, quality & service
Efficiency, quality & service Strong efficiency and quality momentum Cost management is an area of strength Proven track record CTI FY06 CTI FY07 CTI FY08 54.5% 50.8% 46.9% Critical areas of focus Revenue growth Acceleration on costs given lower 9.0% 9.1% growth environment 8.3% Capture synergies ac
Slide 9: People, culture and reputation
People, culture and reputation Significant cultural progress Next steps in our journey NAB Group EOS Engagement Scores (%) Invest in enterprise leadership and 60 capabilities • Senior Leaders Program • nab Academy 40 Build on our investment in industry/ community issues • advice / fees • Micro finan
Slide 10: Portfolio
Portfolio Significant Smaller Strong position, Unsatisfactory upside from businesses, with growth returns today in continuing resilient in tough Group opportunity tough conditions reinvention conditions Contribution (FY08): RWA 48% 12% 8% 32% Cash Earnings1 55% 24% 8% 13% Key Business/ Retail (Aust)
Slide 11: Inorganic investment
Inorganic investment Unprecedented conditions - providing potentially unique opportunities In Australia Open to acquisitions that enhance our organic strategy • eg: distribution, brands Internationally Open to small acquisitions that de-risk / create greater value in our existing positions • eg: dep
Slide 12: Experienced leadership team focused on our priorities
Experienced leadership team focused on our priorities Cameron Clyne Group CEO Michael Ullmer Peter Thodey Office of the CEO Lisa Joseph Steve Rick Andrew Lynne Gavin Mark Bruce Michaela Gray Healy Tucker Sawers Thorburn Peacock Slater Joiner Munro Healey Australia Australia Australia Wholesale NZ, A
Slide 13: Business Banking: Responding to current environment
Business Banking Responding to current environment Business confidence weak but lower balance sheet leverage than last downturn Sector consolidation and retreat of NBFI, Regional Banks, Foreign Banks ~30% of market open for growth Whilst system is ~7% we are growing lending at 1.3x system Holding sh
Slide 14: Leading business banking position
Business Banking Leading business banking position Number 1 business lending market share¹ 19.4% (~25% SME) Number 1 business deposits market share¹ ~22.5% Highest business customer satisfaction of the major banks² ($5M - $100M segment) WA QLD 31 sites 49 sites Rank No 2^ Rank No 1^ NSW/ACT 61 sites
Slide 15: Business Banking: Future opportunities
Business Banking Future opportunities Strong focus on iFS model, Agri, Health, Govt/Education, SME Market Underweight in NSW and SA (Good position today, not over time) Health, Agri, Education (Seeing strong growth) Big focus on transaction banking ~30 new specialists added Small business sector <$3
Slide 16: Personal Banking: Rebuilt retail platform
Personal Banking Rebuilt retail platform Invested $150M over 3 years to rebuild a competitive platform Sales capability in network – new tools, processes, rewards New, sales-enabled ATM fleet Self service/direct capabilities Rationalising product range – reduced transaction products from 26 to 6 Str
Slide 17: Personal Banking: Future opportunities
Personal Banking Future opportunities High value segment focus – our strength Customer Base Composition By Income: Sep 081 Mass affluent, micro business and DIY Brand, scale and capability advantage (% of household footings) Specialised advice and service proposition Capture new customers from merge
Slide 18: Challenging wealth environment
Wealth Challenging wealth environment Investors – disenchanted and distrustful; flight to safety then to quality and trust Advisers – stressed, questioning flawed MLC taking a leading position on business models, moving to fees transparency, trust and quality advice Government – focus on adequacy, f
Slide 19: Creating a broader, stronger wealth business
Wealth Creating a broader, stronger wealth business Combining MLC, nab private wealth and Segment Advice Product MoM Asset Mgmt nabInvest creates a wealth division with substantial growth opportunities by; Retail targeting all customer segments including opportunity in HNW HNW participating
Slide 20: Wealth: Future opportunities
Wealth Future opportunities Leverage position on trust and transparency Attracting quality advisers in good numbers Acquiring and broadening customer relationships Continue to develop MLC & nab wealth proposition Growing nabFP and direct insurance sales Delivering a HNW quality wealth proposition to
Slide 21: Restructure nabCapital
Wholesale Banking Restructure nabCapital Markets, Distribution, Corporate Lending Specialised Finance & Non-Franchise Activity Custody Providing finance to large Includes: Closed to new business corporate clients Markets NAB Ltd Treasury Non-relationship exposures Primarily in Australia, but Bank re
Slide 22: Wholesale Banking: Future opportunities
Wholesale Banking Future opportunities Focused on supporting our relationship franchise with value-added products and services Markets – access and risk clearance of FX, IRR, derivative and other risk management products Specialised finance (eg project finance, structured transactions) Debt capital
Slide 23: UK business resilient in tough conditions
UK UK business resilient in tough conditions Changing Market Conditions The UK Business is well placed Major competitors with capital/funding UK business remains fundamentally sound issues • Business model and strategy have proved resilient Consolidation / public ownership • Strong capital, funding
Slide 24: UK: Future opportunities
UK Future opportunities Continue to manage business well in current environment Accelerate cost and quality efforts Take advantage of new customer opportunities Maintain focus on deposits and funding Examine small acquisition opportunities that add value and de-risk our position Deposit franchises B
Slide 25: New Zealand: Strong position in tough market
New Zealand Strong position in tough market Environment Declining economy (-1% GDP in 2009) Structural savings challenges Wholesale funding costs Intense competition: Government-owned Kiwi Bank and larger competitors Current Position Business is positioned well Market leading cash earnings growth (F
Slide 26: New Zealand: Future opportunities
New Zealand Future opportunities Leverage bnz partners model and capabilities 2009 Sales and service innovation Specialised Finance Continuing focus on efficiency and quality, AgriBusiness Payments particularly via Kaizen Business Property Private Building even stronger culture, with focus on capabi
Slide 27: Next phase of our efficiency agenda
Group Business Services Next phase of our efficiency agenda Manage for a lower-growth world Continued focus on productivity and quality Opportunity to accelerate programs to reduce cost, add flexibility Service company established to facilitate Sharing of practices, processes & standards Alignment o
Slide 28: Asia & USA
Asia & USA Asia & USA Asia USA Current position Current position Small footprint – 104 branches and assets of US$4.3bn in mid- west USA Branches in Hong Kong, Singapore & Japan Strong management team Representative offices in Beijing & Mumbai Business performing well, credit quality sound, stable de
Slide 29: Portfolio
Portfolio Significant Smaller Strong position, Unsatisfactory upside from businesses, with growth returns today in continuing resilient in tough Group opportunity tough conditions reinvention conditions Contribution (FY08): RWA 48% 12% 8% 32% Cash Earnings1 55% 24% 8% 13% Key Business/ Retail (Aust)
Slide 30: Our priorities
Our priorities Continued momentum Additional emphasis Keep the bank safe Deposit funding Capital allocation Tight management of costs Accelerate efficiency, quality & service agenda Accommodate slower recovery scenario Lead platform replacement & convergence Invest in leadership & culture Ignite com
Slide 31: Disclaimer
Disclaimer This document is a presentation of general background information about the Group’s activities current at the date of the presentation, 12 March 2009. It is information in a summary form and does not purport to be complete. It is to be read in conjunction with the National Australia Bank