Bendigo & Adelaide Bank Ltd. · ASX:BEN
Bendigo & Adelaide Bank — H1 2011 Earnings Presentation
44 slides from Bendigo & Adelaide Bank's earnings presentation, Feb 14, 2011
Slide 1: Bendigo and Adelaide Bank 2011 half year results
For personal use only Bendigo and Adelaide Bank 2011 half year results February 14, 2011 1
Slide 2: Disclaimer
Disclaimer: This document is a presentation of general background information about the Group’s activities current at the date of the presentation. It is information in a summary form and does not purport to be complete. It is to be read in conjunction with the Bank’s half year results filed with th
Slide 3: Agenda
For personal use only • Overview • Business performance – Financials – Capital – Credit • Outlook Agenda 3
Slide 4: Overview
For personal use only Mike Hirst Group Managing Director Overview 4
Slide 5: Our result
Our result For personal use only Financial performance •Cash earnings $162.1m •Cash EPS 44.7¢ •Net profit after tax $173.9m Growth •Retail deposits up by 10.3%1 •Loans increased by 5.2%1 •Total branches increased by 20 Funding and liquidity •Issued $2.5bn in RMBS since June 2010 •91% retail funded2
Slide 6: A strongly diversified business
A strongly diversified business Business Segment Business conditions For personal use only •Continued earnings momentum Domestic bank operating five distinct •Unique community and customer positioning brands •Relatively low political risk •#1 banking brand for customer satisfaction and advocacy Cons
Slide 7: A strongly diversified business
A strongly diversified business Business Segment Business conditions For personal use only •High margin, low risk business Margin lending •Leveraged to improvement in equity markets, market share growing •Independent provider of choice •Strong brand and distribution •Commodity prices at near-record
Slide 8: Strong momentum in the business
Strong momentum in the business For personal use only • Capacity and capability preserved within the network • Customer demand for service and brand appreciation is strong Overview Source: December 2010 APRA Monthly Banking Statistics – growth for six months annualised 8 *Restated BEN figures
Slide 9: The future…
The future… • Market conditions remain challenging For personal use only – Subdued demand for credit – Competitive pressures – Regulatory burden • Maintain discipline in both asset and liability generation – Price for risk – Profitability vs market share – Conservative risk appetite • Positive outlo
Slide 10: Business performance
For personal use only Richard Fennell Chief Financial Officer Business performance 10
Slide 11: Financial performance summary
$m HY Dec 2009 HY June 2010 HY Dec 2010 % change (pcp) Cash EPS 41.2¢ 42.1¢ 44.7¢ 8.5 For personal use only Cash earnings ($m) 139.7m 151.3m 162.1m 16.0 Net profit after tax ($m) 104.1m 138.5m 173.9m 67.1 Dividend per share 28.0¢ 30.0¢ 30.0¢ 7.1 Cost to income 58.5% 57.7% 57.7% ↓1.4 NIM 2.04 2.14 2.
Slide 12: Group performance
Group performance For personal use only Business performance - financials Note: figures are for six-monthly reporting periods 12
Slide 13: A diversified business
A diversified business For personal use only Business performance - financials Figures exclude central functions 13
Slide 14: Net interest margin (%)
Net interest margin (%) For personal use only June 2010 Dec 2010 • Margin maintained • No Government Guaranteed rollover risk • Potential upside from asset mix Business performance - financials Net interest margin above is for six months to June 2010 14
Slide 15: Net interest margin
Net interest margin For personal use only • Diligent and prudent pricing – particularly in TD market • Current NIM run-rate of 2.23 per cent gross Business performance - financials 15
Slide 16: Return on equity
Return on equity For personal use only • ROE improvement over prior corresponding period • Maintain forward looking ROE improvement • Marginal ROE above 15% • Goodwill tested – no impairment Business performance - financials Figures are for six-monthly reporting periods Return on Equity (ROE) is the
Slide 17: Cost-to-income
Cost-to-income For personal use only • Trend of improving cost-to-income continues • Staff related costs impact • Long-term target of 55 per cent remains Business performance - financials 17
Slide 18: Operating expenses
Operating expenses For personal use only • BEN BAU predominately staff related Business performance - financials *BEN BAU = BEN business as usual 18
Slide 19: Funding mix
Funding mix For personal use only • 91% retail funded on balance sheet Business performance - financials All figures include Rural Bank 19
Slide 20: Retail deposits
• Term deposits priced to manage liquidity Retail deposits • Successful growth and retention strategies in place • Not a price leader – leveraging brand and customer satisfaction metrics For personal use only $18bn $11bn Business performance - financials 20
Slide 21: Capital
Capital For personal use only • Conservative capital levels provide substantial flexibility • Tier 1 capital 8.06 per cent • Rural Bank acquisition resulted in 0.57% Tier 1 reduction • Improved capital efficiency through $250m sub-debt issuance in 1HY11 Business performance - capital 21
Slide 22: Capital adequacy ratio
Capital adequacy ratio For personal use only Business performance - capital 22
Slide 23: Total provisions and reserves for doubtful debts ($m)
Total provisions and reserves for doubtful debts ($m) • Total provisions increased $2 million over the For personal use only past six months • Increase from June-09 largely reflects Rural Bank consolidation • Rural Bank provisioning has increased from $14.3m (June-10) to $21.4m (Dec-10) • Great Sout
Slide 24: Total provisions and reserves for doubtful debts ($m)
Total provisions and reserves for doubtful debts ($m) For personal use only Business performance - credit 24
Slide 25: Arrears performance
Arrears performance For personal use only Business performance - credit Figures exclude Rural Bank 25
Slide 26: Natural disasters
Natural disasters • Exact impacts of recent natural disasters still to be determined For personal use only • No material credit deterioration expected • Some short term cash flow issues may emerge – particularly in Rural Bank portfolio • However, long-term prospects for agriculture remain sound – Ex
Slide 27: Outlook
For personal use only Mike Hirst Group Managing Director Outlook 27
Slide 28: Still #1 for customer satisfaction…
Still #1 for customer satisfaction… For personal use only BEN ANZ CBA WBC NAB Outlook Source: Roy Morgan Research consumer banking customer satisfaction report September 2010 28
Slide 29: In summary….
In summary…. For personal use only • Leading brand advocacy • Significant organic growth opportunity • Strong credit quality • Funding, pricing and equity markets the key swing factors • Strong balance sheet • Proven implementation capabilities – Rural Bank – Macquarie margin lending – LINX – Trinti
Slide 30: Appendices
For personal use only Appendices 30
Slide 31: Geographic spread
2037 ATM’s 457 branches For personal use only 9 0 1 4 12 168 339 50 43 61 29 40 3 40 16 25 9 113 5 70 118 321 15 44 58 419 908 86 66 189 121 154 760 20 0 268 Community Bank® 9 7 Bendigo branded (3rd party) ATM’s 369 19 Geographic spread 31
Slide 32: Community Bank and retail
Systematic growth in retail For personal use only • 20 branches opened in CY2010 • 20+ branches to be opened in FY2011 • Relatively immature network Community Bank® branches by age Deposits per Community Bank® branches Community Bank® and retail Note: Branches that opened in years 10 and 11 typicall
Slide 33: Growth – retail banking
Growth – retail banking • Continued growth in retail network For personal use only • Strong pipeline for Community Bank® branches. Retail banking Source: BEN internal data. Notes: 2001 includes FABS acquisition, 2007 includes ADB merger. Excludes Alliances & Private franchises. 33
Slide 34: Growth – retail banking
Growth – retail banking • Still a relatively young branch For personal use only network • Growth expected in both liabilities and assets • Plan to grow by 20+ branches in the coming financial year • Community Bank® model proven through the GFC • Footings maturity achieved post six years Retail netwo
Slide 35: Opportunities in Third-Party Banking
Opportunities in Third-Party Banking For personal use only • Margins improving • Variable cost base • Fewer competitors in the market Growth 35
Slide 36: Fundamentals remain attractive for Margin Lending
Fundamentals remain attractive for Margin Lending For personal use only • Independent margin loan provider of choice • Strong long term relationships with many financial advisory firms • Strong margins • Low cost to income • Capacity for significant growth • Continued excellent credit quality • Mark
Slide 37: Great Southern: Towards a resolution
Towards a resolution • Reducing portfolio and borrowers For personal use only Great Southern 37
Slide 38: Secure and low risk group loan portfolio
Secure and low risk group loan portfolio • 98.2% secured For personal use only • 97.8% secured by mortgages and listed securities • Residential lending – improvement in arrears observed in FY10 continued – average LVR 59%* • Margin lending – average LVR 40% – 88% of portfolios held ≥ 4 stocks – negl
Slide 39: Construction portfolio
Construction portfolio For personal use only • $647m of loans (1.4% of total loans) • $169k average loan size • $35m largest loan size • Geographic spread • $47m impaired loans • $74m in arrears (3.8% 90 days+) Credit 39
Slide 40: Group exposures – total $44.8bn
Group exposures – total $44.8bn Mortgages Dec-10 Jun-10 For personal use only Owner occupied 68.3% 69.4% Investment 31.7% 30.6% Lo Doc 7.1% 6.0% Retail mortgages 54.0% 52.9% Third Party mortgages 46.0% 47.1% Mortgages with LMI 44.5% 40.5% Average loan balance $160k $157k 90+ days past due 0.9% 0.8%
Slide 41: MIP geographic distribution
MIP geographic distribution For personal use only Credit Includes Commercial property MIP and Business Banking portfolio 41
Slide 42: Commercial loans typically small
Commercial loans typically small For personal use only • Predominantly SME • Average loan size $207k • 73 loans >$10m totalling $1,429m (3.2% of BEN loans) • Diversity by geography and industry Credit 42
Slide 43: Commercial – industry split
Commercial – industry split For personal use only Credit 43
Slide 44: Analysts and Media contacts
Analysts Media For personal use only Will Rayner Lauren Treacy Head of Capital and Investor Relations Head of Media and Communications Bendigo and Adelaide Bank Limited Bendigo and Adelaide Bank Limited Tel: +61 8 8220 7764 Tel: +61 3 5485 7109 Mob: +61 437 794 366 Mob: +61 407 340 283 Email: will.r
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