Commonwealth Bank Of Australia · ASX:CBA
Commonwealth Bank Of Australia — Investor Presentation (May 2003)
32 slides from Commonwealth Bank Of Australia's investor presentation, May 20, 2003
Slide 1: Strategy Briefing
Strategy Briefing Michael Katz Premium Financial Services 20 May 2003 soewecommbani-coman Commonwealth Bark |” a * Good morning. * Premium Financial Services is an integrated banking & broking business with customised products & services for clients with more complex financial needs
Slide 2: Disclaimer
Disclaimer The material that follows is a presentation of general background information about the Bank’s activities current at the date of the presentation, 20 May 2003. 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 in
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.” Sonmonwesitnisk: <4
Slide 4: Agenda
Agenda « What is Premium Financial Services? » What are our Competitive Advantages? Republic Product Innovation and Development Process Improvement » Performance Coretivoniweosite fis. ye 4
Slide 5: CBA Vision and PFS Goals
CBA Vision and PFS Goals The Vision To be chosen and respected as an excellent provider of financial services Business Goals: : Recognising the. unigue - lifetinie financial needs of customers. Providing services that are best in segment with choice of access : Being skitied, authorised, | equipped
Slide 6: What is PFS?
What is PFS? Integrated broking and banking platform providing clients with access to: » borrowing & deposit services » direct & indirect investment » debt & equity products » transactional banking & full advisory services raseiitoriwenaattis (652. a 6
Slide 7: What is PFS?
What is PFS? Lending based relationships Wealth based relationships Broking w investment Doe insurance Ww Banking Setarenntceieenaattts fees a 7 Wealth based relationships -- Holistic wealth relationships focused on the investment side of the client's balance sheet plus the ability to gear
Slide 8: What is PFS?
What is PFS? Premium Products Premium Service Premium | Clients Premium Return orionmwensitts ia. eB
Slide 9: What is PFS?
What is PFS? PFS Private Client Services HiHold Income > $120K or Premium Sanking Footings > $250K Investment Services or Product Management & Direct Services Other Proxies 5 foc ¢oonsenes investors & [esis \ wae Clients eneral Advice Clients / Information Only RBS / Retail Banking Services 5% sdiqs
Slide 10: Competitive Advantage
Competitive Advantage Personal Advisers Risk Commercial Advisers Advisers investment Advisers Republic Contact Management System Re-engineered Products and Processes ‘Cossrscmnetatth Zieh, «ye 10 10
Slide 11: Republic
Republic Republic is the PFS relationship management platform for our sales and service support centres Republic is being built using the architecture and development expertise assembled during the build of CommSec Republic provides a comprehensive view of our clients raseiitoriwenaattis (652. a 44
Slide 12: Republic
Republic Requires 3 levels of data Relationships © File: Back Office Integration Republic 12
Slide 13: Republic
Republic » Provide all Relationship Managers in the pod access to all client data; » Provide accurate contact management records; » Provide client risk profiles; » Integrate product and marketing initiatives. Kaa winvioraweeaatta (232. dy 13 13
Slide 14: Republic
Republic » Currently has 600 users; » Tracks client interactions including: 500 client Interviews per day; 6,000 client telephone calls per day; Over 1,000 emails per day*; 159 client referrals per day; 1,000 offer letters and fulfilments per day. * Hard-wired Covetivonowrositle fis. ye 14 We will i
Slide 15: Republic client profile screen
‘pei: pdabiockon eG tae pi, Seeder ac Republic does more than massage existing Bank data. Here are two quick examples of some of the information available: This screen provides a client profile - not only in terms of risk appetite and employment details but also through a proforma balance sheet at t
Slide 16: Republic screen example
tal She : ae a] Pee be aes Be asd. Vas vin oes sek the og wut Wpehatead AS ld ME 2 ayn wreagca. Me REE: : 2 aeanyon, 2 Eanward eine me 2 ee 0 . mo te yiead wn oe Boe Sa taal . sase,uee | «Met feeatte, vee pei Please note information an these dote screens have been scrambled forpivaty purposes Sommon
Slide 17: Republic - Client Relationships
Republic - Client Relationships YO ine Ine igs Pbnavin By, Binns SEIT ES, ‘arorneoraweamten (60217 ‘Please ‘note irdonmation of these dala screens have been scrambied for privacy pirposes This screen provides a profile of a client’s key family and business relationships. By understanding a client’s
Slide 18: Product Innovation and Development
Product Innovation and Development Premium Bank Account CommSec Wealth Package CommSec products and access to IPOs 2 CommSec Portfolio Loan CommSec Premium Research Protected Portfolio Loan Tax Advice agreement Estate Planning agreement Regular Premium Perspectives Newsletters raseiitoriwenaattis (6
Slide 19: Product Innovation and Development
Product Innovation and Development » Flexible, all-in-one loan facility x Only available through PFS x Launched on May 2, 2003 » Will later be accessible via Republic raseiitoriwenaattis (652. a 19 --> reference brochure in the analysts packs 19
Slide 20: Product Innovation and Development
Product Innovation and Development ~ Global borrowing limit Personal Premium investment Margin Use Fixed Loan Use Loan Loan Loan Residential Shares > Cash 5 Shares Property ; Common security raseiitoriwenaattis (652. a 20 Main competitor is St George Portfolio Loan. However our product is superior b
Slide 21: Process Improvement
Process Improvement » New credit standards approved March x New credit servicing tool approved March (on trial since September) Over 8,000 approvals (50% adoption by PFS units) Higher approval rate (4.5%) raseiitoriwenaattis (652. a 21 21
Slide 22: Process Improvement
Process Improvement « New fulfilment processes trialed April Currently servicing 9 sites with 31 planned by September Processing of change of client details and change of contact details using Republic (60,000 changes processed) » New credit decisioning system built into Republic testing in May rase
Slide 23: Performance
Performance Client retention (30 nothing) a - Enhanced retention & - Greater client profitability orwiiviormenstti ire. ye 23 23
Slide 24: Performance
Performance Client relationships migrated to June 2003 number 173,000 which is at least four months ahead of our internal plans; Physical capacity has been substantially completed with the leasing of space in 363 George St, now partially occupied; We have recently acquired TD Waterhouse. asvittoriep
Slide 25: Performance
Performance PFS acquired the Australian retail brokerage operations of TD Waterhouse Investor Services Subsidiary of Toronto-Dominion Bank, Canada Currently has 300,000 brokerage accounts raseiitoriwenaattis (652. a 25 There are tax benefits involved in the TD Waterhouse purchase. 25
Slide 26: Performance
Performance Complimentary client base Staff and business are natural fit with CommSec Cost synergies Rorwiiviormenstti ire. ye 26 26
Slide 27: Performance
Performance Westpac’s recently announced outsource arrangement with Hartleys illustrates that Westpac no longer runs a broking business, they simply license/on-sell; ANZ wrote down a further $6M of their $36M investment in E*Trade recently. Client acquisition through this channel appears to be flat;
Slide 28: Performance
Performance Sanford are in the final stages of a hostile takeover by Investor Web Limited and are not a credible threat; It is clear that Commonwealth is the only serious Bank player in the stockbroking business. raseiitoriwenaattis (652. a 28 28
Slide 29: Performance
Performance Apr02 | Dec02 | Jun 03 Relationships 40,000 >75,000 | >170,000 Staff 830 1,130 1,546 Locations 24 25 27 CommSec Accounts 685,000 J 720,000 >1.1M Cost to Income: Banking* 48% Equities* 75% * Based on current run rate raseiitoriwenaattis (652. a 29 29
Slide 30: Feedback from Clients
Feedback from Clients x “Based on the excellent service to date of my account manager, Mr Martin Rettschlag, & now Mr Paolucci | have become a fan of a service which | was initially extremely reluctant to commit to, doubting it to be anything other than another cynical fee-maximising venture for the
Slide 31: Feedback from Clients
Feedback from Clients x He has dealt with my issues in a highly professional manner, been in constant contact with me by phone and email, and refinanced my home Ioan to my satisfaction putting me in a much better position financially than | was 2 weeks ago.” = "It is indeed rare to find service and
Slide 32: Strategy Briefing
Strategy Briefing Michael Katz Premium Financial Services 20 May 2003 www.commbank.com.au 32
Commonwealth Bank of Australia — Investor Presentation (May 2003) on 6ix