National Australia Bank Limited · ASX:NAB
National Australia Bank — Corporate Update (August 2005)
17 slides from National Australia Bank's corporate update, Aug 31, 2005
Slide 1: Institutional Markets & Services Overview and Update
August 2005 Institutional Markets & Services Overview and Update John Hooper Executive General Manager % al Australia Bank
Slide 2: Overview of the IMS Business
Overview of the IMS Business Services | Portfolio Management People & Culture Finance and Risk Management Marketing & Communications Operations. Quantitative Services Technology Program Office Client Business Services What's out Trade Finance Transactional Banking Custodian Services of IMS. Noe: in
Slide 3: The issues IMS faced can be grouped into four core themes
CB The issues IMS faced can be grouped into four core themes Business Unsustainable inefficiency revenue growth People Ineffective risk practices %{National Australia Bank
Slide 4: IMS focus was on risk capital at the expense of actual capital
CB MS focus was on risk capital at the expense of actual capital FY 2001* FY 2002* FY 2003 FY 2004 Net Operating Income ~A$1,820m | ~A$1.810m | A$1,762m A$1 484m Operating Expenses ~Ag650m ~Age60m Age4am Ag705m Net Profit after Tax ~A$700m ~A$790m Ag$e4om agssam Average Interest Earning | ~AS92b ~AS
Slide 5: c.70% of IMS contribution is from Australia and NZ
c.70% of IMS contribution is from Australia and NZ with less than 50% of the capital deployed Regional profit contribution and capital usage as at 30 Sep 2004 50 = Regional Contribution 26 wm Capital Usage % contribution to IMS. w& 8 ‘ a | ot | Australia UK New us Asia Zealand 5 %{National Australia
Slide 6: c.60% of IMS revenue comes from Australia and NZ
c.60% of IMS revenue comes from Australia and NZ Revenue by Product Revenue by Region (September 2004) (September 2004) Structured Products (6%) Other (4%) Credit Products @% CL @2%) NZ (11%) Markets - Sales 24%) UK @7%) inane Institutions CL = Corporate Lending Nate: Corporate Lending name, expense
Slide 7: The issues IMS faced can be grouped into four core themes
CB The issues IMS faced can be grouped into four core themes Business inefficiency = Risk capital focus (EVA / RAROC) at expense of actual capital Unsustainable revenue growth = Declining margins in volume products = High reliance on one-off fees and peaks in non-sustainable incorne streams People =
Slide 8: IMS is creating a competitive growth platform
IMS is creating a competitive growth platform ™@ Focus on key segments across core markets — Australia, New Zealand and UK ® Consolidation of Asian footprint — hub in Hong Kong, exiting IMS. activity in Singapore, Seoul, Tokyo and Malaysia ® Exit non-core businesses in the US — Energy and Utilities
Slide 9: IMS is also addressing the challenging external environment
IMS is also addressing the challenging external environment External Environment Strong market liquidity continues to put pressure on corporate lending yield Increasing sophistication of retail and sub-institutional client segments Changing legislative environment impacting Structured Finance busine
Slide 10: IMS ongoing focus is to address key issues
CB IMS ongoing focus is to address key issues Simplify the operations of the business ®@ Deliver sustainable revenue growth ™ Create the right environment for people to excel lM Embed ownership of effective risk practices 10 %{National Australia Bank
Slide 11: IMS - Simplify Operations
IMS - Simplify Operations P ® Rationalise geographic footprint ® Review competitive position of all products and market segments Progress to Date ™@ Released $250M ACE" capital as at 31 March 2005 but still work in progress ® Consolidation of Asian footprint on track — centralisation of IMS business
Slide 12: IMS - Revenue
IMS - Revenue Focus on key segments across core markets Improve returns from client relationships New product introduction Focus on originate — warehouse — distribute operating model Pi tt] a a a Progress to Date ™ Re-opened FX desk ™@ Expanded product range including Leveraged Finance, Mezzanine De
Slide 13: IMS has experienced some early successes
IMS has experienced some early successes No. 1 in Project Finance No.1 Mandated Arranger Value (48m) Loan Syndications Proceeds (Ussm) 913 1 Z CBA 973 2 ANZ 3,400 g JP Morgan 621 3 CBA 2.426 7 ANZ B 382 a Westpas 2,408 5 ABN Amro 320 5 CSFB 7.046 Only Australian Bank in Global Top 10; Mandated Arran
Slide 14: IMS - People
IMS - People Pi 1] @ a a Progress to Date Stabilise management Drive cultural change and awareness Clear role definition and accountability Linking of performance and reward New IMS Management team in place Compliance and behavioural ‘gateways’ embedded into people assessments Organisational Culture
Slide 15: IMS - Risk
IMS - Risk Priorities ® Focus on APRA/ASIC and undertakings given to global regulators ® Shift from reactive to proactive risk management ® Integration of all aspects of Risk Management into the business Progress to Date @ Completed all IMS specific ASIC Enforceable Undertaking work, closer focus an
Slide 16: IMS - Summary
IMS - Summary Rebasing our business Addressing fundamentals - simplification, revenue, people and risk Expecting flat half on half earnings in line with half year announcement Potentially lower earnings in 2006 as the business is rebased — c. $50M reduction 16 %{National Australia Bank
Slide 17: Searchable text section of graphics shown above
Searchable text section of graphics shown above Aug ust 2005 I nstitutional Markets & Services Overview and Update John Hooper Executive General Manager [LOGO] Ove rview of the IMS Business Clients Financial Institutions: Banks, Insurance, Fund Managers, Governments, and Corporates and Business Clie
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