Westpac Banking Corporation · ASX:WBC
Westpac Banking — Investor Presentation (July 2003)
34 slides from Westpac Banking's investor presentation, Jul 31, 2003
Slide 1: Business and Consumer Banking: Building sustainable success
ls Australia's First Bank Business and Consumer Banking Building sustainable success... Mike Pratt Group Executive, Business & Consumer Banking 31-July 2003
Slide 2: An aligned, customer focused business model
An aligned, customer focused business model Vision “To be.a great Australian Company” ™ A great place to work ™ A superior customer experience ™ 1st quartile shareholder returns ™ A good corporate citizen Strategy How? Outcomes Differentiator: Superior Core Group Objectives Execution 2003 Customer F
Slide 3: Agenda
Agenda ¢ Early results * BCB today * Building sustainable success | Australia's First Bank Market Update - July 2003
Slide 4: Business and Consumer Banking — March
Business and Consumer Banking — March 03 * Cash earnings up 13% * Expense to income down 340bps * Bad debt increase primarily due to dynamic provisioning for rebuild of equipment finance book Australia's First Bank $m 1HO3. 1HO2 °% Mov’t Operating income 2,124... 1,975 8 Operating expenses (1,145) (
Slide 5: Growth in key products
Growth in key products Growth March 2002 to March 2003 Group Average interest earning assets Housing Corporate - net loans & accept. Non-housing term loans 27% Total deposits Australia Housing Business lending # Retail deposits 20% T T T T 1 0 5 10 15 20 # Excludes impact of rebuilding ex-AGC equipm
Slide 6: Market share - across the board growth
Market share - across the board growth ¢ Westpac has written over 20% of all Australian financial system credit in the last 6 months‘ Share of Reserve Bank of Australia bens taapeD Crange i ; ar ar ; financial system aggregates 0% %, points) Credit Housing 17.9 18.1 (0.2) Personal 11.5 10.2 113 Othe
Slide 7: Achievements year to date
Achievements year to date e Branch and small business ~ quality of referrals up ~ customer satisfaction is up Lending Process Project (Pinnacle) ~ credit card scorecards upgraded ~ customer view within collections CRM Project (Reach) - leads converted to opportunity - 78% — cross-sell - 23% of conta
Slide 8: Achievements year to date
Achievements year to date * Business-unit initiatives contributed 13% to cash earnings ~ Pricing review ~ Disciplined cost management ¢ Business banking growth -~ cash earnings increased 25% over prior year - equipment finance book rebuilt ~ credit growth stronger than system - up 10% * Reduction in
Slide 9: Agenda
Agenda ¢ Early results * BCB today * Building sustainable success | Australia's First Bank Market Update - July 2003
Slide 10: BCB today
BCB today Business & Consumer Banking (BCB) * Australian retail banking and wealth distribution * Customer-driven organisational structure * Optimal geographic footprint * 5.1 million customers * Customers that consider us their main bank: * 13% Consumer * 20% Middle Markets * 15.8% SME * 13,841 sta
Slide 11: Our People feel increasingly connected to our Mission...
Our People feel increasingly connected to our Mission... Staff perspectives Westpac Overall 2002 2002 vs 2001 percent Percent above / survey 2002 Category Summary increase over year below Global Financial Services % Favourabie Response Norm 2002 Community Involvement N/A Employee Engagement Working
Slide 12: ...And Customer Satisfaction is improving
...And Customer Satisfaction is improving Consumer Satisfaction % of main financial institution customers very or fairly satisfied 65.0% 60.0% SME satisfaction - total satisfied June 2003 80.0% 70% 48.0% 85% 40.0% 0% Dect Mar-02 ssun-02 Sep-02 Dec-02 Mar-03 Jun-03 fe Middle Market Satisfaction - tot
Slide 13: And our strategy is focused on profit pools
And our strategy is focused on profit pools Australian Retail Banking Sector Profit Pool Estimated Profile of 2002. NPAT (A$Mn) 7,000 5 6,000 4 5,000 + oo 4,000 + — Da) 3,000 + 2,000 + 4,000 5 o4 Cards Mortgage Personal ..- Consumer -.: Personal .-.Short Term ~-.Long Term _- Leasing and ..: Business
Slide 14: Clearly the biggest opportunity is in SME ...
Clearly the biggest opportunity is in SME ... Geography Segments State 1 State 2 State 3 State 4 State 5 Total 112 74 35 95 44 360 Agribusiness 26 | 23% 32 43% } | 15 44% 12 13% 10 (| 22% 95 26% 462 303 145 389 J 182 1481 SME 53 (11% 18 8% 7 5% 34 9% 4 10% 130 (| 9% —— 133 87* 42 112 52 426 Middle M
Slide 15: ... And in Consumer, mid lifestages provide the biggest opportunities
... And in Consumer, mid lifestages provide the biggest opportunities Consumer by Agé Group \ Products 19-28 WO 44, / 45 - 64 \ Age BB+ TOTAL Credit Cards C $1Bn | $700M $1.9Bn Mortgage te 2% 15% 13% Personal Savings Consumer Transactions Personal Lending $280M $1.6Bn $1.6Bn $300M c$3.8Bn Total Bank
Slide 16: Agenda
Agenda ¢ Early results * BCB today * Building sustainable success Australia's First Bank Market Update - July 2003
Slide 17: Elements of a great retail banking franchise
Elements of a great retail banking franchise Customer Exserience SN Pro uci
Slide 18: Redpower - A phased program to build sustainable success
Redpower - A phased program to build sustainable success Ali nett plannin & 2003-2005 gnment, P 9 Re-position and Unlock Growth quick wins | Detailed environmental Redefine customer Delivery of lifecycle diagnostic experience customer solutions Mapped capabilities Reposition to exploit | Advice and
Slide 19: Strategies for business will maximise value from profit pools
Strategies for business will maximise value from profit pools Mi Early “te . 2003-2005 ignment, planning Re-position and Unlock Growth & quick wins _ Regain equipment Business Integrated distribution finance book superannuation model Put business solutions Tiered relationship Strengthen link _ into
Slide 20: Strategies for consumer will maximise value from profit pools
Strategies for consumer will maximise value from profit pools ‘i Early “te 2003-2005 ignment, planning Re-position and Unlock Growth & quick wins Extend hours to meet Meet more customer Integrated distribution customer need needs at first contact model | Renew focus on Develop solutions that | Stren
Slide 21: An integrated program supports our customer focused strategy
An integrated program supports our customer focused strategy Programs Key projects Distribution Branch & Small Business capabilities Lending Process Project (Pinnacle) Product & Process Excellence CRM Project (Reach) Customer. Experience specification framework Customer Experience Contact. Centre Op
Slide 22: Customer Experience has a strategic, operational and tactical focus
Customer Experience has a strategic, operational and tactical focus Theme Project * Westpac Brand Launch of new communications positioning * People and Performance (Align) Strategic Several initiatives covering KPIs, redeployment, Change Management, Learning & Development * Joint Transformation Prog
Slide 23: Customer Experience
‘Giistamer Exporionee Positive and negative experiences of = customers Overview of customer experience B positive 74% O Negive ——>—* Source: Westpac Proprietary Research (ANOP) Australia's First Bank Market Update - July 2003
Slide 24: A disciplined approach to identify key customer experience improvements
A disciplined approach to identify key customer experience improvements Prioritisation Framework # Complaints} count per month. # Customer Problem? How Happy? ) Complaint Interactions. count per month Incidence Rate & Current Customers Satisfaction levels Size of Prize $ ? Profit pool data Australia
Slide 25: Improvement opportunities have been prioritised
Improvement opportunities have been prioritised Score and Rank Order of Specifications - by Product Usage -. Need & Offer & Enquiries Renew / | Evaluation Purchase | Transactions| Problems Upgrade Usage.- Mortgage inv & Advice Credit Card Business Trans Savings Risk Other Lending ma Top 10 priority
Slide 26: The Voice of the Customer used to identify key improvement opportunities
The Voice of the Customer used to identify key improvement opportunities Inputs Conduct Key Issue Identification Process Spec. Development - = Touch point mapping Long List Ten Key 2-3 Key of the customer Issues Issues Issues experience Customer FOCUS FOCUS FOCUS , Research ONE ONE ONE Research cust
Slide 27: The first two specifications are agreed and implementation is underway
‘Gilstomer Expariones The first two specifications are agreed and implementation is underway Owner Go / No-Go ¢ Approved @> Decision , . Measures / » Scope » Quantify » Analyse > > » Controls » Customer Check Experience Research, Issue Identification, Solution Development ke anand solutions built |-
Slide 28: Piloting new capabilities to better serve our SME customers
Piloting new capabilities to better serve our SME customers ‘Gaistomer Expertoae Customer Products relationship manayernent We faced key questions How do we better serve SME customers in the branch? How can we develop an aggressive acquisition capability? How do we provide capability in the branch t
Slide 29: People Experience has five strategic thrusts
People Experience has five strategic thrusts Strategic Thrusts BCB People Leadership & People Aligning Beware Nimble Experience Management Capability Organisation Performance wT VT VF VTeF WH Programs to Deliver «Employment «Culture *Recruitment * Performance * Flexible Value strategy measurement in
Slide 30: Westpac Academy
Westpac Academy What is it? * Anew approach to Training Learning & Development * Key focus areas - Customer Experience, Leadership, e-Learning Academy Objectives Customer Experience Module * Develop strategic learning * Workplace briefings and off-site framework - deployed quicker, activities. faste
Slide 31: Westpac Academy Customer Experience Module
Westpac Academy Customer Experience Module Module Structure First Activity Second Activity Third Activity Fourth Activity Fifth Activity (workplace) (off-site) (off-site) (workplace) (off-site) What should | How do | lead Delivering Reinforcing Reinforcing Expect my team to deliver\ Customer. what w
Slide 32: "Banks get the service message"
“Banks get the service message” Chanticleer Australian Financial Review 31 July 2003 | Australia's First Bank Market Update - July 2003
Slide 33: Building sustainable success
Building sustainable success * Great place to work * A breakaway customer experience * Superior growth / return earnings profile ad Westpac is well on track to be the clear service leader in our industry by 2005! Source: Westpac Annual Report 2002 p. 21 | Australia's First Bank Market Update - July
Slide 34: Disclaimer
Disclaimer The material contained in this presentation is intended to be general background information on Westpac Banking Corporation and its activities as at 31 July 2003. The information is supplied in summary form and is therefore not necessarily complete. Also, it is not intended that it be rel