Slide 1: Critical Success Factors – Business and Consumer Banking
Wifestpac Australia’s First Bank Business and Consumer Banking Critical Success Factors Mike Pratt UBS Conference 23 June 2004
Slide 2: Business & Consumer Banking today
Business & Consumer Banking today ¢ Australian retail banking and wealth distribution — Consumer ~ SME ( <$20m turnover) — Middle Market (<$75m turnover) * Customer-driven organisational structure ¢ 5.1 million customers * Share of wallet held per customer": * Consumer — 35% * Business — 56% * 12,50
Slide 3: BCB half yearly performance
BCB half yearly performance * Balanced result with 27% growth in economic profit * Strong increase in assets and liabilities * Mortgages up 16% Cards up 17% Deposits up 12% Business Lending up 18% * Contained expenses while absorbing significant compliance spend $m 1H04.. -1H03 % ‘o Change Operating
Slide 4: BCB Composition of operating income
BCB Composition of operating income ¢ BCB contributes $m 41H04.-1HO3 change % Total approximately 60% of the Bank's operating Consumer 1,236 1,128 96|| 53 income Mortgages 504 448 12.5) 21 * Balanced across Cards 204 228 (3.1) | 10 consumer segmen ts Other 511 452. 13.4) | 22 Business 1,077 944 14.1
Slide 5: Drivers of performance
Drivers of performance People Experience Program Customer Experience Program - Branch & Small Business Capabilities Mortgages Tactical Cards Operational Expense Management Wlfestpac June 2004. Australia’s First Bank 5
Slide 6: People Experience program
People Experience program Enhancing the commitment of employees is central to improving the customer experience Strategic Thrusts BCB People Experience Leadership & Management People Capability Aligning Reward to Performance Nimble Organisation > & > > > & ao Rtograms being Delivered > “Employment «
Slide 7: The culture journey so far...
The culture journey so far... From 2002 re here Diagnostic Identify desired culture and mindsets Identify gaps Start with the top team Find early role models Create a Culture Development Plan Build a leadership group accountable for leading culture change Align systems and send new messages Monitor,
Slide 8: Desired mindsets are embedded into everything we do
Desired mindsets are embedded into everything we do Customer Centricity Leadership Teaming ‘Living in the customer’s ‘Leading by what we do’ ‘Achieving more together... shoes’ it starts with me’ Wlfestpac June 2004 Australia's First Bank
Slide 9: Desired mindsets are embedded into everything we do
Desired mindsets are embedded into everything we do Continuous Risk Mastery Discipline Improvement ‘Striving for better ways’ ‘Being Bold. Being Balanced’ ‘Committing and following through’ Wlfestpac June 2004 Australia’s First Bank 9
Slide 10: Staff are increasingly committed
Staff are increasingly committed * Commitment has increased * Staff turnover dropped 7 percentage points * Resignations within the first 12 months also down 6 percentage points * Redundancy savings — over 60% * Record number of graduate applications BCB. Employee Commitment % of employees reporting
Slide 11: Customer Experience program
Customer Experience program Customer Experience Customer : experience — - Ask Once Brand specification : : : . . Complaints Ask Once Brand One Brand Surveys] -Find & Fix Handling || Coordinators Position Project Wlfestpac June 2004 Australia's First Bank 11
Slide 12: Extensive customer experience analysis
Extensive customer experience analysis * 3,000 customers surveyed per week * All channels measured * Over 50,000 interviews conducted * Improved complaints logging process capturing service defects * Prioritisation of service issues completed and solutions roll out throughout 2004. su 6- i June 2004
Slide 13: Ask Once — making a difference
Ask Once — making a difference ¢ 49 Ask Once coordinators e Enhanced complaint Complaint Resolution t d ures at First Point of Contact management proce 100% * Increase in complaints cov resolved at first point of 3 82% contact 3 80% 717% aaa ; a * Customer satisfaction = 0% improving against peers 5
Slide 14: Customer satisfaction results
Customer satisfaction results Change in Customer Satisfaction Peer Average oe i ee LLL LL en Westpac LEED A EEE A ERE A EEE 7 ELIE EE ECE EE EEE EEE EEE sappemeaamn nT Anan 7] LLL Wg 0 1 2 3 % change in last six months Consumer Middle Market m@SME Source: Consumer - Roy Morgan, SME & Middle Market ~
Slide 15: Our Brand journey
Our Brand journey That's obr ¢ Weetpac TESCue 2 lives saved a day, Nice work, OWS, WMiFestpae June 2004 Wlfestpac Australia’s First Bank 15
Slide 16: Brand Metrics are positive
Brand Metrics are positive Consumer — Brand metrics (%) Fresh Thinking Working to improve the Customer. Experience Deliver.a consistently better Customer Experience Open and Honest 0% 20% 40% @ Pre Campaign @ Post Campaign 60%. Business —Brand metrics (%) Fresh Thinking Working to improve the Custom
Slide 17: SME Strategy — an integrated approach
SME Strategy — an integrated approach Technology Product Distribution BSR BSR Reach —s iil iil Industry NL + Packages Heit Wil Cente ~ BFM Pinnacle |_| ail ail BSR BSR eB Recruitment, Training and skill development Wlfestpac June 2004 Australia's First Bank 17
Slide 18: Tactical responses have contributed to performance
Tactical responses have contributed to performance ¢ Mortgages — managing for profit - Slowing market Effective management of broker channel - Cautious approach to investment housing and low doc loans Concentrating resources toward retention ¢ Credit cards — a market undergoing significant change -
Slide 19: Expenses tightly managed
Expenses tightly managed * Managing the revenue growth/cost growth gap * Increase in FTE supporting business growth - Increased demand in Virgin card - Training staff for roll-out of major strategic projects * Strategic investment spend - Customer relationship management capabilities (Reach) - Strea
Slide 20: My balanced scorecard
My balanced scorecard dune 2004 Our People Our Customers Our Shareholder BCB.Employee Satisfaction Scores*: BCB 1H04 Results*: Commitment: 4 2.2% * Consumer: & 4.3% (68.2%) | | + Cash Eamings . 4 19% « SME: # 7% (62.0%) | | » Economic Profit -4@ 27% BCB.Employee + Middle Market: @.7% (69.8%) .| | *
Slide 21: Critical Success Factors – Business and Consumer Banking
Wifestpac Australia’s First Bank Business and Consumer Banking Critical Success Factors Mike Pratt UBS Conference 23 June 2004
Slide 22: Disclaimer
Disclaimer The material contained in this presentation is intended to be general background information on Westpac Banking Corporation and its activities. The information is supplied in summary form and is therefore not necessarily complete. Also, it is not intended that it be relied upon as advice