Bendigo & Adelaide Bank Ltd. · ASX:BEN
Bendigo & Adelaide Bank — FY2015 Earnings Presentation
42 slides from Bendigo & Adelaide Bank's earnings presentation, Aug 10, 2015
Slide 1: Results Presentation for the full year ended 30 June 2015
Bendigoand > AdelaideBank Results Presentation For the full year ended 30 June 2015 Mike Hirst Richard Fennell Managing Director Chief Financial Officer
Slide 2: For personal use only
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 no representation or warranty is made as to the accuracy, completeness or reliability of the information. It is to be read i
Slide 3: Agenda
For personal use only Overview Financial performance Summary and outlook Appendices Agenda 3
Slide 4: Overview
For personal use only Mike Hirst Group Managing Director Overview 4
Slide 5: Our full year result
Our full year result For personal use only Financial performance - statutory profit after tax Financial performance - cash earnings Statutory profit after tax $423.9m Cash earnings of $432.4m Full year dividend of 66.0¢, fully franked1 Cash earnings per share 95.1¢ Final dividend of 33.0¢,
Slide 6: Annual growth outcome
Annual growth outcome For personal use only Source: Credit Suisse, APRA/RBA statistics June 2015 1. Data is based on 12 month growth, includes Rural Bank Overview 6
Slide 7: Mortgage growth impacted by uneven playing field
Mortgage growth impacted by uneven playing field 20% increase in excess repayments year on year For personal use only Amortisation of back book continues to impact net loan growth but improves customer’s financial position July 2015 APRA announcements have positively impacted the competitive e
Slide 8: Great Southern
Great Southern Total loans net of specific provisions reduced from For personal use only $323.8m to $257.7m since 31 December 2014 Specific and collective provisions at June 2015 were $18.3m and $27.7m respectively Total borrowers: 3,321 at December 2014 2,678 at June 2015 1 - Data as at 3
Slide 9: Competitive environment is rapidly changing
Competitive environment is rapidly changing Economic Market For personal use only Employment Competitive dynamics Low interest rates Low growth Confidence Consumer propensity to reduce debt Ageing population Investor / Owner Occupied differential pricing Leverage wealth investment Customer advocacy
Slide 10: Unique and valued customer proposition
Unique and valued customer proposition Business Bank of the year for four consecutive years (2011 – 2014)4 For personal use only miBanker app won the 2015 Victoria iAwards for financial services Best rated Australian financial institution on the Corporate Reputation index5 Bendigo SmartStart
Slide 11: Listening and responding to the voice of our customers
Listening and responding to the voice of our customers For personal use only Overview 11
Slide 12: Financial performance
For personal use only Richard Fennell Chief Financial Officer Financial performance 12
Slide 13: At a glance
At a glance Change Change FY15 FY14 FY15 - FY14 2H15 - 2H14 For personal use only Cash earnings $432.4m $382.3m 13.1% 9.2% Statutory NPAT $423.9m $372.3m 13.9% 2.6% Cash EPS 95.1¢ 91.5¢ 3.9% 1.3% Net interest margin 2.20% 2.24% (4 bps) (7 bps) Expense to income ratio 55.2% 55.6% (40 bps) (80 bps) Ex
Slide 14: Solid annual cash earnings growth
Solid annual cash earnings growth Costs well contained in 2H15 reflecting challenging For personal use only revenue environment Margin contraction due to cash rate reductions and highly competitive environment Continued strong contribution from Homesafe portfolio RFC contribution exceeding i
Slide 15: Net interest margin
Net interest margin Reduction in NIM reflects competitive lending For personal use only environment and 50bps cut in 2H15 in RBA cash rate Asset pricing impact of uneven playing field and trend towards fixed rate lending Deposit pricing and mix well managed to partially offset asset margin pre
Slide 16: Flexible funding structure
Flexible funding structure Leveraging core strengths of the retail brand and For personal use only network RMBS issues of $600m (December 2014) and $500m (June 2015) Continued strong growth in Retail at-call across a range of deposit products Basel III liquidity transition successfully compl
Slide 17: Focus on efficiency
Focus on efficiency For personal use only Expense impacts — RFC expense contribution of $15m — Wage inflation — Investment in a range of customer technologies and new product / service offerings Financial performance 17
Slide 18: Basel II & technology investment
Basel II & technology investment For personal use only Build and development phase completed Enhancements to data, decision making processes and risk and return measurements are improving how we serve our customers Independent review of credit risk and IRRBB models completed Actively engagin
Slide 19: Strong capital position
Strong capital position Basel III CET1 ratio increased to 8.17% For personal use only Total capital increased to 12.57% Additional Tier 1 capital issued in October 2014 and June 2015 (net increase of $384m) 1 2 1 1. Shows pro-forma impact to capital adequacy ratios of the Rural Finance acquisi
Slide 20: Business segment performance
Business segment performance For personal use only 1. Graphs refer to operating segment information (cash basis) on p18 in 4E, excludes central functions. Financial performance 20
Slide 21: Homesafe investment property portfolio
Homesafe investment property portfolio For personal use only Asset growth driven by: New business (properties acquired) Portfolio revaluation (income contribution) □ Change in property prices – Residex index increase for 12 months1; Melbourne +8.2% Sydney +16.7% □ Ageing of portfolio Ave
Slide 22: Bad and doubtful debts
Bad and doubtful debts Portfolio remains well secured, with low LVR’s For personal use only Bad and doubtful debts expense was $68.3 million, down 16.6% year-on-year Increase in 2H15 BDD expense primarily driven by $15.9m collective provision overlay for Great Southern 1 RFC acquisition resu
Slide 23: Arrears – days+
Arrears – 90 days+ For personal use only Financial performance 23
Slide 24: Summary and Outlook
For personal use only Mike Hirst Group Managing Director Summary and Outlook 24
Slide 25: Summary and outlook
Summary and outlook For personal use only 1 Value proposition to the fore with more level playing field 2 Balance sheet strength 3 Continue to consider acquisitions and alliances with a strategic fit 4 Margin management in a low rate, low growth environment 5 Investments in technology 6 Basel IV 7 B
Slide 26: Questions
For personal use only Questions 26
Slide 27: Appendices
For personal use only Appendices 27
Slide 28: Positive earnings progression
Positive earnings progression For personal use only Appendices 28
Slide 29: A portfolio of diverse businesses
A portfolio of diverse businesses Business Segment For personal use only Domestic bank operating seven • Challenges through continued regulatory change distinct brands • Unique community, customer, and partner proposition • #1 banking brand for customer and business satisfaction, and advocacy Consum
Slide 30: Retail banking
Retail banking Leading Consumer and Business satisfaction ratings For personal use only Strong focus on Customer strategy execution Increase in NII supported by strong growth in at-call funds and pricing of term deposits Highly competitive lending market EasySaver deposit product launched
Slide 31: Third party banking
Third party banking Market conditions remain highly competitive For personal use only Increased investment in broker channel has shown promising results Replacement of existing lending systems with best practice platform underway Approximately 50% of NII decrease due to change in FTP methodo
Slide 32: Wealth
Wealth Total Funds Under Management grew at 22% For personal use only Acquired 11% interest in Future Super (the first fossil fuel free Superannuation fund) in September 2014 Total Margin Lending portfolio steady with an increase in the annual prepaid proportion Smart Start Super continues t
Slide 33: Agri-business
Agri-business Underlying improvement in operating performance For personal use only Strong retention of Rural Finance customer base Cost synergies from Rural Finance delivered ahead of schedule Continued reduction in non-performing loans Improving macro environment 1. Graphs refer to opera
Slide 34: Diverse geographic footprint
Diverse geographic footprint 1703 ATM’s 526 branches For personal use only 1 4 8 0 4 132 353 50 46 75 50 13 3 44 7 1 2 1 98 4 95 24 14 107 191 16 50 16 8 4 416 862 190 87 40 59 141 11 639 310 Community Bank® 26 1 9 11 Bendigo branded (3rd party) ATM’s 202 8 14 2 11 Appendices 34
Slide 35: The Community Bank model
The Community Bank® model 17 years old More than $130m in community grants since inception For personal use only – delivering tangible benefits for these communities and our business 310 Community Bank branches with more than 90 in communities where there is no alternative provider Proven, rel
Slide 36: Secure and low risk loan portfolios
Secure and low risk loan portfolios For personal use only Residential Mortgages3 Jun-15 Dec-14 Jun-14 98.4% secured Owner occupied 64.9% 65.0% 65.1% 97.8% secured by mortgages and Investment Lo Doc 35.1% 35.0% 34.9% 2.9% 3.4% 3.9% listed securities Retail mortgages 53.6% 52.1% 52.0% Third Party
Slide 37: Specific provisions
Specific provisions For personal use only Represented by Provision as % Retail 3rd Party Business Delphi Great Rural Rural Alliance Consumer Wealth BEN total of gross loans Mortgages Mortgages Lending Bank Southern Bank Finance Partners June 2014 0.03% 0.03% 0.2% 0.5% 0.08% 4.3% 1.0% - - - 0.22% Jun
Slide 38: Funding
Funding For personal use only FY14 FY15 FY15 1. Company data Appendices 38
Slide 39: Key capital ratios & LVR breakdown
Key capital ratios & LVR breakdown For personal use only 2H141 1H15 2H15 Common equity tier 1 8.02 8.14 8.17 Additional tier 1 1.20 1.88 2.43 Tier 1 Capital 9.99 10.02 10.60 Tier 2 2.17 2.17 1.97 Total regulatory capital 11.39 12.19 12.57 Risk weighted assets (RWA) ($bn) 34.3 34.5 34.7 1. Shows pro-
Slide 40: Contributions by segment
Contributions by segment For personal use only 1. Graphs refer to operating segment information (cash basis) on p18 - 19 in 4E, excludes central functions. Appendices 40
Slide 41: RBL/RFC exposure by industry/geography
RBL/RFC exposure by industry/geography For personal use only Appendices 41
Slide 42: Contact
Analysts Media For personal use only Travis Crouch Silvana Arena Head of Capital and Investor Relations Head of Public Relations Bendigo and Adelaide Bank Limited Bendigo and Adelaide Bank Limited Tel: +61 3 5485 6261 Tel: +61 8 8220 7784 Mob: +61 418 552 922 Mob: +61 402 110 445 Email: travis.crouc
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