Bendigo & Adelaide Bank Ltd. · ASX:BEN
Bendigo & Adelaide Bank — FY2006 Earnings Presentation
43 slides from Bendigo & Adelaide Bank's earnings presentation, Aug 14, 2006
Slide 1: 2006 profit announcement
2006 profit announcement © Bendigo Bank prev tennou
Slide 2: Agenda
Agenda Rob Hunt Managing Director Mike Hirst cries Operating Officer Craig Langford chief Financial Officer © Bendigo Bank Branded strategy producing results The next growth phase The result in detail protianno
Slide 3: Branded retail banking strategy producing results
Branded retail banking strategy producing results Rob Hunt Managing Director © Bendigo Bank profitannoune
Slide 4: The Result
The Result « Continued progress on all fronts tial improvement in headline result (reported ROE 15.1%) » Strong improvement in NPAT (excluding significant terns) from $91.7 to $100.8m » Exceeded EPS guidance (17.8% increase) « Dividend increased by 7 cents to 52 cents (15.6% increase) e Growth conti
Slide 5: Bendigo — a branded retail approach
Bendigo — a branded retail approach An 11-year journey to date « Most foundation blocks now in place « Consistent performance is evident @ Plenty of opportunity ahead, but... » Still work to be done to unlock latent value © Bendigo Bank protianno
Slide 6: Our strategy reflects Bendigo's core strengths
Our strategy reflects Bendigo’s core strengths « Strong reputation and brand e Community connections e Quality customer service « Ability to undertake collaborative commerce « Discipline to build gradually, as capital allows 6 © Bendigo Bank protianno
Slide 7: Strong foundations allowed us to build...
Strong foundations allowed us to build... » A style of banking that confirmed our different approach » Our distribution capability towards a national and diversified coverage * A product range to support both existing and expected new client base * The skill base to cater for: om more onerous compli
Slide 8: Our branded retail strategy is delivering
Our branded retail strategy is delivering « Raising deposits anc loans in ail markets across Australia (lestamen: fo the brand vale) e 53% of our branches are now outside Victoria (with 36% of our business now coming from interstate) « Growth at profit! e prices (as demonstrated by the gross margin
Slide 9: Our branded retail strategy is delivering
Our branded retail strategy is delivering « Cormrnunity engagement is greaily a ing customer acquisition and retention « Our Wealth Solutions and Business Banking divisions play a key role and now add value in the majority of our markets « Our alliances and joint ventures are still maturing « Strate
Slide 10: Strategy is producing...
Strategy is producing... « Improved profit performance « More civerse revenue base e Improved brand and positioning (ability to grow at profitable prices) e Excellent customer services outcomes (best in the industry) e« Strong relation ith customers, communities, and our partners « Solid Triple Bott
Slide 11: Strategic priorities unchanged
Strategic priorities unchanged » Grow at profitable prices w» Sustainabdly increase shareholder vaiue (NPAT and EPS) w» Further diversify our revenue base » Continue to expand (invest) while demand for Bendigo remains strong e Strengthen the connection with our customers and communities (herefore im
Slide 12: Future
Future a Competitive market expected to remain e Strengthen customer relationships through value-add, cross strong cotcntion programs » Maintain high standard of customer service « Provide all regions with the skill to implement the full strategy « Wealth Solutions and Business Banking to continue e
Slide 13: The next growth phase
The next growth phase Mike Hirst chief Operating Officer © Bendigo Bank profiannouy
Slide 14: Our Network is changing
Our Network is changing yeas acnesio Company owned: MM Gut. aed © Bendigo Bank profilannounéel
Slide 15: ...as is the way we manage it.
...as is the way we manage it. e Moved to State-based management « Increased number of Regional Managers e« Responsible for: - Company and community branches - Business bankers ~ Financial planners ~ Community engagement Greater focus on staff, sales and service as regions reduced in size © Bendigo
Slide 16: A premium service offering...
A premium service offering... « Customer advocacy levels highest in the industry and more than double the second placed competitor* * Customer satisfaction also cortinues to be highest in industry according to both Nielsen anc Roy Morgan research « A complete product offering for our customer base *
Slide 17: ...driving an even contribution across the network
...driving an even contribution across the network * Retail deposits up 13% * Loans under management up 10% « Funds under management up 10% ¢ Wet Interest Income up 10% « Won Interest Income up 12%* * Interest margin strong « Customer numbers up 79,000 to 1.068 million (7.9%) * before significant it
Slide 18: Our wealth management offering has also progressed
Our wealth management offering has also progressed » Changed remuneration structure for advisers from saies-based to professional base salary with Group staff bont » Continued programme of “nome-grown’ advisers * Customers can choose to pay commission or fixed fee ® aunched Professional Series funds
Slide 19: Funds management growth
Funds management growth $ Mitions ecmmaiaees SCL Debentures Cash Management Tust Australian Equities Funds imma Diversified Funds wizené# Superannuation mmm Morigage Funds © Bendigo Bank profitannouncemer
Slide 20: Relationship opportunities
Relationship opportunities Relationships are deposit-led with good penetration in loans and wealth management... % of customers in product © Bendigo Bank
Slide 21: Relationship opportunities
Relationship opportunities Great scope for relationship growth % of customers Number of relationships © Bendigo Bank por apnougce
Slide 22: The result in detail
The result in detail Craig Langford Chief Financial Officer © Bendigo Bank protianno
Slide 23: Branded retail strategy delivering results
Branded retail strategy delivering results Shareholder returns seco | Lae Profit after tax $94.7m $116.7m 23.2% Profit available for distribution ; : to ordinary shareholders : $94.7 $109.2m 15.3% Earnings per share 67.5 cents 78.0 cents 15.6% Dividends — total 45.0 cents §2.0 cents 15.6% Dividends
Slide 24: Branded retail strategy delivering results
Branded retail strategy delivering results Underlying profit Prue 2005 Underlying earnings $446.3m $163.2m Profit before significant Items ; : available for ordinary shareholders $91.7m $100.8m 10.0% Cash earnings per share 65.5 cents 73.2 cents 11.8% oO Bendigo Bank profitannounce
Slide 25: Profit analysis
Profit analysis Profit before significant items available for ordinary shareholders AS Millions $200.80 SOL. 7m © Bendigo Bank protianno
Slide 26: Growth at profitable prices
Growth at profitable prices Interest margin % eee ¥ ay MOHGE 4 eee Bue ' cD Community Bank & Alliances : 2 i } Wee: OPE # tae) © Bendigo Bank profilannounéel
Slide 27: Growth at profitable prices
Growth at profitable prices Analysis of net interest margin % 2.68% © Bendigo Bank por apnougce
Slide 28: Growth at profitable prices
Growth at profitable prices Group managed loans / retail funds Retail funding mix oy ‘0 AS Millions 14,087 12,839 Rotail Funds ged Loans On balance sheet [Wholesale oO Bendigo Bank profitanno
Slide 29: Diversification of revenue
Diversification of revenue Profit contributions before tax AS Milfions © Bendigo Bank profiannoup
Slide 30: Diversification of revenue
Diversification of revenue Non-interest income § Millions cme! Deposit Ave Stansadtiontecs ‘pees Loan ides mean, Wealth Solbtonis and other commissions pment, Shite ot Newouinne” net peony se: ‘eum Trusteis, Maragement acOther services Sti: Insurance commissions: . ‘metal. Othee > © Bendigo Bank pro
Slide 31: Investing in future growth
Investing in future growth Operating expenses § Milions 170.8 ante Salaries & otaffrelated costs omnis. Occaparey eee Ainiorinator: tweaninlogy Costs ‘iam’ Menagement fees & expenses eis “Depve cietioti/amichtisation ‘iittii mangibles amortisation ioe “ther peKaliaeeimenses © Bendigo Bank profilanno
Slide 32: Growing shareholder returns
Growing shareholder returns amings and dividends Return on equity cents % 13.8 14.0 219 << — a Pre significant items © Bendigo Bank profitannou
Slide 33: Excellent credit quality
Excellent credit quality © Bendigo Bank profitannounce
Slide 34: Strong capital position
strong capital position 10.77 10.39 10.35 6.79 ; i et | © Bendigo Bank profitannouncemer
Slide 35: To recap, our strategy is...
To recap, our strategy is... « Adisciplined application of a branded retail banking strategy that plays to our strengths e Achieving consistent growth ... at profitable prices e Growing both sides of the book equally in all markets e Producing consistently strang growth (five years of 10%-plus cash
Slide 36: Summary & Questions
Summary & Questions Rob Hunt Managing Director © Bendigo Bank protianno
Slide 37: Additional information
Additional information © Bendigo Bank profiannouy
Slide 38: Profit available for distribution to ordinary shareholders
Profit available for distribution to ordinary shareholders AS Millions Oe © Bendigo Bank protianno
Slide 39: Non-interest income
Non-interest income Deposit A/C & transaction fees Loan fees Wealth Solutions and other commissions Share of Associates’ net profit/loss Trustee, Management & Other Services Insurance commissions Other © Bendigo Bank : protiann
Slide 40: Funds under management
Funds under management Sandhurst mortgage & cash funds 4,731.9 1,941.4 Sandhurst Industrial Share Fund 495.4 482.7 Bendigo Superannuation Plan 220.4 256.9 Genera} Retirement Plan 68.2 80.2 Bendigo managed funds Other~- fot © Bendigo Bank profitannou
Slide 41: Funds under management
Funds under management AS Millions 2,966.9 2,709.6 a4 © Bendigo Bank profilannounéel
Slide 42: Commercial loans
Commercial loans C ate © Bendigo Bank Property & business services Construction » Health & community service Cultural & recreational services Agriculture, forestry & fishing Accom, cafes & restaurants ‘Transport & storage mums Retail trade gees Manufacturing sma Wholesale trade voauas Finance & Insu
Slide 43: Loan portfolio
Loan portfolio By purpose By security a, ‘0 5% Non-residential 43 © Bendigo Bank ; profitanno
Bendigo and Adelaide Bank — FY2006 Earnings Presentation on 6ix