Commonwealth Bank Of Australia · ASX:CBA
Commonwealth Bank Of Australia — Investor Presentation (May 2003)
24 slides from Commonwealth Bank Of Australia's investor presentation, May 20, 2003
Slide 1: Strategy Briefing
Strategy Briefing David Murray Chief Executive Officer 20 May 2003 ‘Conmonwealth 22:
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. Itis information given in summary form and does not purport to be complete. It is not intended to be relied upon as advice to inv
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.” Cormorants. i 3
Slide 4: Agenda
Agenda Strategic Response Strategy Execution + Today’s presentation will cover the Bank’s strategic direction and progress on execution, with some reference to the environmental context.
Slide 5: Economic environment
. Economic environment Australian economic growth Nominat GDP & Credit Growth expected to slow modestly 4 (1990-2003) % (year on year) International conditions expected 19 ‘ Total Credit to remain subdued 10 renee nn afd Global equity market returns expected to remain weak Housing credit growth is e
Slide 6: Operating environment: Banking margin squeeze
Operating environment: Banking margin squeeze Average Operating Margins* 4 Major Banks (1997 - 2002) Importance of: BQ epee em nt tt Scale 3.7 Large customer ae eee Cx base Fe ee, eee Extensive , proprietary and De third party distribution 29 T r T : 1 1997 1998 1899 2000 2001 2002 *Margin calculate
Slide 7: Investor returns - natural cycle or structural shift?
Investor returns - natural cycle or structural shift? » Ratio of Market Value of Companies Over Fundamental Value % (1926 - 2002) 1927 1932 1937 1942 1947 1952 1957 1962 1967 1972 1977 1982 1987 1992 1997 2002) SOULE: Moody's Manual of livesiments, Value Mandgenient . %, ‘Research enone i Top Pertoc
Slide 8: Strong market shares in a diversified business mix
Strong market shares in a diversified business mix Commonwealth Bank Market Shares* Merchant Acquiring Sovereign Deposits Transaction Services Credit Cards Home Loans Giobai Markets cu Asset Finance Managed Investments Life insurance Coy Corporate and Business Lending Institutional Banking Products
Slide 9: Agenda
Agenda Operating Environment Strategy Execution
Slide 10: Strategic response
Strategic response A business model best suited to the operating environment Organising around customers, overlayed by product lines of business to maximise cross-sell and minimise process duplication Renewed strategic focus « Vision and Business Goals » Five areas of focus Aeiprrenereommeiltiyssci.
Slide 11: The business model
The business model Environment » Customer needs » Margin squeeze Wide range of services » Reduced volume growth Scale and low unit costs Leading industry portfolio Extensive proprietary and third party distribution Aetertenmercommedtin Sse: ig 11 « Given these environmental factors, advice-based int
Slide 12: Organisation
Organisation Premium Banking And investment Services stitutional Banking corporate Banking tutional Wholesale Managed Funds Business Banking CBA internal Distribution Mortgage Wealth aearenmercammettin Ss: ig 12 « We have a clear line of sight between our customer needs and our lines of business. Be
Slide 13: Strategic vision and business goals
Strategic vision and business goals The Vision ail Business Goals: Recognising the unique lifetime financial needs of customers. Providing services that are - best in segment with: choice of access Strategi c : u ‘Being skilled, authorised, © 2 00 4-08 equipped and engaged to differentiate our servi
Slide 14: Strategic focus 2004 -
Strategic focus 2004 - 08 Simplify our processes and systems Optimise the business mix Engage our people to provide consistently good service for customers through our distribution network Deepen our customer relationships through needs based cross-sell and bundling Implement a sales and service bas
Slide 15: Agenda
Agenda Operating Environment » Strategic Response 15
Slide 16: 1. Simplify our processes and systems
1. Simplify our processes and systems Key initiatives 2002/03 Outcomes » Remove back-office functions — Service from branches improvements » Streamline Business Banking Incremental net processes : costs in 2002/03 =~$143m pre tax » Rationalise investment products & systems Annualised future oer . be
Slide 17: 2. Optimise the business mix
2. Optimise the business mix Priority areas: » Grow premium financial services. » Grow institutional and business services. » Grow wealth management. » Maintain continued growth in retail. Apiperesemreenmnittin ace. ge 17 Within our portfolio of businesses, we will be heavily focused on growing prem
Slide 18: 3. Engage our people to provide consistently good service
3. Engage our people to provide consistently good service for customers through our distribution network » Branch redesign 100 branches to refurbished in 03/04 » NetBank upgrade To be completed 04/05 » Advice & investment 30% gross fund inflows now services through the through branch network network
Slide 19: 3. Engage our people to provide consistently good service
3. Engage our people to provide consistently good service for customers through our distribution network Engage our people to engage our customers + We believe that the key to consistently good service and engaging our customers » Strong application of our leadership model » Taking our lead from our
Slide 20: 4. Deepen our customer relationships through needs based cross-sell
4, Deepen our customer relationships through needs based cross-sell and bundling From... Tun. Pure cross sell ©» Needs based bundling Fragmented definition “= Concise definition Varied measures “ Consistent measure Inconsistent group-wide sales and service system One Group approach No published targ
Slide 21: 4. Deepen our customer relationships through needs based cross-sell
4. Deepen our customer relationships through needs based cross-sell and bundling CFS Branded Product Fund inflows through Branch Network % {% total gross fund inflows) 40 30 20 10 Sep-01 Mar-02 Sep-02 Mar-03 As an example: + We have achieved solid results in the last 18 months in distributing our in
Slide 22: 5. Implementing a sales and service based management culture
5. Implementing a sales and service based management culture Developing strong sales and service leadership, management and performance coaching Creating a consistent sales management system Embedding service quality process ‘Ferrers esi, i gp 22 + There are three areas of focus in a sales and servi
Slide 23: Outlook
Outlook Top quartile TSR over rolling 5 year periods 3-6% pa productivity gains Satisfactory earnings growth Financial outlook for FY03 results remains unchanged erent isi gp 23 Looking ahead, the outcomes we are aiming for are: + Top quartile total shareholder returns over rolling 5 year periods; *
Slide 24: Strategy Briefing
Strategy Briefing David Murray Chief Executive Officer 20 May 2003 24
Commonwealth Bank of Australia — Investor Presentation (May 2003) on 6ix