Bendigo & Adelaide Bank Ltd. · ASX:BEN
Bendigo & Adelaide Bank — H1 2005 Earnings Presentation
36 slides from Bendigo & Adelaide Bank's earnings presentation, Feb 14, 2005
Slide 1: Interim Profit 2005
Interim Profit 2005 Presenters The financial result Craig Langford Chief Financial Officer Strategy and outlook Rob Hunt Managing Director Growing together Supporting cor 1 © Bendigo Bank
Slide 2: The financial result
Growing together Supporting communities, sharing success The financial result Craig Langford Chief Financial Officer 2 © Bendigo Bank
Slide 3: Performance summary
Performance summary A$ Millions Net Profit after Income Tax Net profit before specific items Lending approvals Retail deposits Return on Average Assets Return on Average Equity Earnings per Share - cents Dividend - cents Dec-03 34.6 33.2 3,098 8,396 0.71% 11.90% 26.9 17.0 Dec-04 42.8 38.9 2,987 9,62
Slide 4: Specific items
Growing together Supporting communities, sharing success Specific items A$ Millions Sale of IOOF Holdings Ltd shares 5.0 Sale of Cashcard shares 0.5 Income tax effect (1.6) TOTAL 3.9 4 © Bendigo Bank
Slide 5: Operating profit after tax
Growing together Supporting communities, sharing success Operating profit after tax AS Millions 50 45 40 35 30 Li Jun 2002 | Dec 2002 Jun 2004 | Dec 2004 © Bendigo Bank
Slide 6: Profit performance
Growing together Supporting communities, sharing success Profit performance AS Millions | Specitic ems Expenses 70 i Norvinterest (i? 2) 60 i 2 10.4 1 Bad debts 50) (2.4) 40 | ellie g He, Dec 2003 Dec 2004 © Bendigo Bank
Slide 7: Interest margin
Growing together Supporting communities, sharing success Interest margin Jun 2003 Dec 2003 | Jun 2004 | Dec 2004
Slide 8: Analysis of net interest margin
Analysis of net interest margin % 2.7 26 Cash to Bills Funding Mix . spread 0.02 (0.08) Competition (0,04) 2.5 Alliance margin share (0.03) 2.4 2.3 2.2 HEME ek Growing together Supporting communities, sharing success Jun 2004 | Dec 2004 © Bendigo Bank
Slide 9: Core retail deposit base: Funding mix
Growing together Supporting communities, sharing success Core retail deposit base: Funding mix % 100 Dec 2002 — | Dec 2003 Dec 2004 © Bendigo Bank
Slide 10: Profit contributions
Growing together Supporting communities, sharing success Profit contributions A$ Millions 25 20 15 10} 18 3.8 5 Retail Bank Elders Rural Wealth Community Bank Solutions Bank 10 © Bendigo Bank
Slide 11: Efficiency ratio: Operating expenses/income
Growing together Supporting communities, sharing success Efficiency ratio: Operating expenses/income Dec 2002 Dec 2003 Dec 2004
Slide 12: Total assets
Growing together Supporting communities, sharing success Total assets A$ Millions 14,000 12,000 10,000 8,000 6,000 4,000 2,000 Dec 2002 | Dec 2003
Slide 13: Funds under management
Growing together Supporting communities, sharing success Funds under management A$ Millions 3,000 2,900 2,000 1,500 1,000 500 Dec 2004 13 © Bendigo Bank
Slide 14: Asset quality: Impaired loans / total assets
Growing together Supporting communities, sharing success Asset quality: Impaired loans / total assets % 0.20 0.18 0.16 0.14 0.12 0.10 0.08 0.06 0.04 0.02 0.00 | Dec 2002 Dec 2003 Dec 2004 14 © Bendigo Bank
Slide 15: Shareholder returns
Growing together Supporting communities, sharing success Shareholder returns Cents 40 35 30 25 Dec 2002. Dec 2004 Cash basis earnings per s 15 © Bendigo Bank
Slide 16: Capital adequacy
Growing together Supporting communities, sharing success Capital adequacy 10.65 10.26 10.48 ON & DD WO 16 © Bendigo Bank
Slide 17: Capital structure
Growing together Supporting cor Capital structure ¢ Reviewed current structure in light of current market conditions ¢ New target capital mix- tier one 7.50% tier two 2.75% ¢ Issue of Perpetual Step-up preference shares * On market share buy back | More efficient capital structure 7 © Bendigo Bank
Slide 18: Strategy & outlook
Growing together Supporting communities, sharing success Strategy & outlook Rob Hunt Managing Director 18 © Bendigo Bank
Slide 19: A unique and consistent strategy
Growing together Supporting co A unique and consistent strategy Cultivate strong retail connection through: - Creating a distinctive brand - Expanding distribution network (proprietary, Community Bank, alliances) - Broadening product range - Increasing our relevance A strategy aligned to our histori
Slide 20: Strategic progress
Growing together Supporting co Strategic progress Brand welcomed Australia-wide Branch network tripled in five years Alliances — ERB, TBS, CSB Broad product range includes e-bank, Wealth Solutions, business, farm, sector-specific Customer numbers doubled in four years Our community engagement activi
Slide 21: Business progress
Growing together Supporting co Business progress Business now widely diversified -Retail bank, Community Bank, Wealth Solutions, JV’s & alliances All growing strongly with rising earnings Strategic investments play a key role in our strategy Diversity of revenue is a key emerging a strength © Bendig
Slide 22: Performance progress
Growing together Supporting co Performance progress 2000 2004 After-tax profit $21m $80m ROE 7.75% 12.99% EPS 27.5C 60.2c Dividends 24.0c 40.0c* * 2005 interim dividend up by 2 cents Growth is consistently strong despite a heavy investment program 22 © Bendigo Bank
Slide 23: The interim result
The interim result Solid progress in line with forecast Strong growth in revenues across business Growth is enabling further investment in capacity and improving prospects But ... some short-term issues relating to revenue and EPS outcomes Interim result continues our steady progress Growing togethe
Slide 24: Retail banking margins
Retail banking margins High retail funding proportion (90%) at start of period Increased price competition for deposits Margin pressure caused by changes in retail/wholesale mix Customer margins relatively stable Bendigo grew retail base by 15% in the calendar year (assets by 21%) Bendigo remains 85
Slide 25: Margin remains healthy
Margin remains healthy Gross margin is strong (2.81%) Happy to share margin with Community Bank and other distribution partners Continue to build strong relationships - Customers - Communities - Alliance partners Not chasing growth based on price Our retail banking strategy has been consistent for a
Slide 26: Capital fine-tuning
Growing together Supporting cor Capital fine-tuning Simple capital structure has served us well More efficient structure will improve shareholder returns Providing shareholders with investment choice Improving EPS is a focus Improved alignment between bottom line performance and shareholder returns
Slide 27: Looking ahead
Looking ahead Strategy remains consistent - building community engagement capacity Strong demand for brand, so ... We will continue to invest in capacity Growth will continue as businesses mature and expansion continues Excellent prospects for ERB and alliances Bendigo Bank’s performance improvement
Slide 28: Additional Information
Growing together Supporting cor Additional Information 28 © Bendigo Bank
Slide 29: Non-interest income
Growing together Supporting communities, sharing success Non-interest income $73.4m $88.7m EEE LOL LTE OEE EEE Dec 2003 Dec 2004 MM 34% Deposit A/C & transaction fees MM 35% Deposit A/C & transaction fees WW 17% Loan fees WM 17% Cornmissions (primarily Wealth Man.) MMH 16% Commissions (primarily Wea
Slide 30: Operating expenses
Growing together Supporting communities, sharing success Operating expenses $139.0m $157.6m Dec 2003 Dec 2004 MMM 49% Staff & related costs MMM 50% Staff & related costs WA 22% Administration & other expenses WM 22% Administration & other expenses HB 9% = Information technology costs GM 7% = informa
Slide 31: Commercial loans
Growing together Supporting communities, sharing success Commercial loans $1,522m $2,052m Dec 2003 Dec 2004 34% Property & business services MM 40% Property & business services 15% Other MMB 12% Retail trade 12% Retail trade GME 11% Agriculture, forestry & fishing 12% Agriculture, forestry & fishing
Slide 32: Geographic spread
Geographic sprea Loans Ce LLL @ Lo 4% TAS 5% WA 3% SA 15% QLD 14% NSW 59% VIC BEC GaD Dec 2004 2% 5% 1% 14% 6% 12% 60% Growing together Supporting communities, sharing success Deposits EY SLADE EEN TI ee Ce LE AEE TAS ; WA SA QLD OS/OTHER NSW vic Dec 2004 32 © Bendigo Bank
Slide 33: Loan portfolio
Loan portfolio % By purpose “Dec 2003 | Dec 2004 Nonresidential By security Growing together Supporting communities, sharing success Dec 2003 Ti Dec 2004 Commercial Unsecured 33 © Bendigo Bank
Slide 34: Non-accrual loans
Growing together Non-accrual loans Ag Mitfions 20 18 16 14 12 10 ON FD ® 34 © Bendigo Bank
Slide 35: Provision for doubtful debts
Growing together Supporting communities, sharing success Provision for doubtful debts A Millions 70 60 50 40 30 20 10 OL Dec 2002 Dec 2004 _ Specific. 35 © Bendigo Bank
Slide 36: Return on equity
Growing together Supporting communities, sharing success Return on equity ON FD WwW Dec 2002 | Dec 2003 | Dec 2004 36 © Bendigo Bank
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