Slide 1: Driving reform
Driving reform Doing the basics really well to improve shareholder returns Andrew Mohl Chief Executive Officer 14 November 2002
Slide 2: CEO's reform agenda
[=AMP{ CEO’s reform agenda Five areas of focus: * Addressing low return channel and product lines * Focusing short term growth ambitions on core businesses * Increasing transparency and quality of disclosure * Tackling sacred cows and embedded behaviours * Role modelling strong leadership Reform age
Slide 3: Summary of key changes
[=AMP{ Summary of key changes w Australian Financial Services » Streamlining to improve efficiencies and strengthen business » 10% reduction in cost base in 2003 (A$60m) °® AMP Banking » Focused strategy to compete in key products where AMP has competitive advantage » A$500m capital release by end 2
Slide 4: Australian Financial Services restructuring
[=AMP| Australian Financial Services restructuring Actions ° AMP Direct functionality folded into business ° Aggressive cost saves across support functions ° Lower IT spend ® Role reductions across all key areas totalling 550 (including contractors) Rationale ® Streamlining and refocusing on essenti
Slide 5: AFS restructuring — financial implications
[=AMP{ AFS restructuring — financial implications Capital A$4.4b Over A$1b released, some retention due to market conditions Lower, subject to markets ROIC 14.1% Higher* Targeting 16% Normalised Costs A$677m A$620m* Savings of A$60m Targeting 40% cost to income ratio Value of new | A$249m Positive d
Slide 6: AMP Banking transformation — What?
[=AMP{ AMP Banking transformation — What? * Focus on two core retail banking products in Australia « Release of A$500m in capital by end 2003 through divestments, securitisation and release of surplus capital * Capital base for banking falls to <A$100m by end 2003 « Staffing needs for banking falls
Slide 7: AMP Banking transformation — How?
[=AMP{ AMP Banking transformation — How? e Exit manufacturing of all asset products, except mortgages in Australia. >» This will include exit from manufacturing credit cards and property finance in Australia and NZ and manufacturing mortgages in NZ and UK * Review of processing value chain, with pot
Slide 8: AMP Banking transformation — Why?
[=AMP{ AMP Banking transformation — Why? * Size » Significantly reduces cost base » worth about A$0.8 trillion « Product concentration « Plays to AMP strengths — packaging, » retail deposits and mortgages brand and distribution generate 54% of the revenues and 62% of the profits of the whole retail
Slide 9: Corporate office restructuring
[=AMP{ Corporate office restructuring Actions * Some corporate HR, finance and corporate affairs services folded into BUs; others wound down * Scaling back of AMP International business in Strategy and Development » AMP Asia team disbanded; Singapore office closed; China office scaled back » AMP New
Slide 10: UK Contemporary Financial and Life Services
[=AMP{ UK Contemporary Financial and Life Services Actions ® Review progressing, with some actions taken: » European Development team disbanded » Some IT functions outsourced » AMP brand campaign scaled back * Cost savings on track, being revised upwards Rationale * In line with commitment to review
Slide 11: Slide 11