Bendigo & Adelaide Bank Ltd. · ASX:BEN
Bendigo & Adelaide Bank — FY2005 Earnings Presentation
53 slides from Bendigo & Adelaide Bank's earnings presentation, Aug 15, 2005
Slide 1: 2005 profit announcement
2005 profit announcement 2005 profit announcement @)> Bendigo Bank
Slide 2: Agenda
Agenda Craig Langford Chief Financial Officer The result Mike Hirst chief General Manager Solutions & Strategy The strategy Greg Gillett Chief General Manager Retail The progress Rob Hunt managing Director The prospects 5 profit announcement
Slide 3: The result
The result Craig Langford Chief Financial Officer O5 profit announcement Bendigo Bank
Slide 4: Performance summary
Performance summary Underlying Earnings $125.0m $146.4m Profit before: significant. items $73.2M $87.4m 19.4% Profit after significant items $79.8m $90.4m 13.3% Loans under management $11/255m $12,866m 14.3% Cash earnings per share 58.5 cents 65.6 cents 12.1% Dividends = total 40.0. cents 45.0 cents
Slide 5: Significant items
Significant items Sale of IOOF shares (16% of holding) 3.5 Additional payments relating to. 2004 sale of Cashcard shares: 0.7 Sale of BSX shares + cessation of equity accounting 0.9 Bank account-debits tax (correction of underpayment) (3.4) Profit on sale of Properties — 1.3 a )5 profit announcement
Slide 6: Profit performance
Profit performance A$ Millions Significant items (85.2m) Expenses {$36.9n) Now-trterest Bad debts income $0.20 30 6 © profit announcement
Slide 7: Interest margin
Interest margin % 2.81. 2.76 i Community Bank & Alliances > profit announcement ) Bendigo Bank
Slide 8: Analysis of interest margin
Analysis of interest margin Gash to bills epreee Funding mix ome (0.09%) Competition 2.91% P| (0.08%) 2.76% 5 profit announcement
Slide 9: Bank deposit base
Bank deposit base 12003 2004" (2005 Wholesale 5 profit announcement ) Bendigo Bank
Slide 10: Profit contributions
Profit contributions A$ Millions > profit announcement ) Bendigo Bank
Slide 11: Efficiency ratio
Efficiency ratio: Operating expense/income « 88.7 68.4 67.7 2005 profit announcement » Bendigo Bank
Slide 12: Total Group-managed assets
Total Group-managed assets A$ Millions 12 5 profit announcement ) Bendigo Bank
Slide 13: Retail funds
Retail funds A$ Millions 2,296 On balance sheet 43 )5 profit announcement © 7 Bendigo Bank
Slide 14: Shareholder returns
Shareholder returns Cents 12.1% 5 profit announcement
Slide 15: Asset quality: impaired loans/total assets
Asset quality: impaired loans/total assets 0.11 A ee General provisions maintained at 0.79% of risk-weighted assets 15 5 profit announcement ) Bendigo Bank
Slide 16: Capital adequacy
Capital adequacy 10.58 40.38 10.39 IAM 16 2005 profit announcement Bendigo Bank
Slide 17: IFRS
IFRS No material changes to cashflows or ability to pay dividends Goodwill no longer amortised, but subject to annual impairment testing Securitisation SPVs to be consolidated Equity investments currently carried at cost will be carried at fair value Detailed analysis available from the website 17 r
Slide 18: The strategy
The strategy Mike Hirst chief General Manager Solutions & Strategy 48 O5 profit announcement Bendigo Bank
Slide 19: Bendigo's strategy
Bendigo’s strategy A financial solutions distribution business: * offering a premium service * providing a high value proposition; not price led * building relationships with consumers, SME’s and partners * engaging with communities to enhance their prospects 19 5 profit announcement
Slide 20: Bendigo's strategy
Bendigo’s strategy The past four years have seen continual investment in: * Physical and online networks ° Product capability * Brand and positioning customers, footprint and product offering. 20 } profit announcement )) Bendigo Bank
Slide 21: Bendigo's strategy
Bendigo’s strategy Focus over the medion temr on: ° Continuing to diversify the Bank’s earnings base ° Converting our brand strength into business with potential customers * Maximising balance sheet efficiency A branded retail strategy 21 5 profit announcement
Slide 22: The progress
The progress Greg Gillett Chief General Manager Retail 22 O5 profit announcement Bendigo Bank
Slide 23: Our branch network has grown considerably since 1998
Our branch network has grown considerably since 1998 In 1998 we operated 74 company owned branches — 50 in regional Victoria and southern New South Wales, and 21 in metropolitan Melbourne. The first Community Bank® branches were opened in the Victorian Wimmera townships of Rupanyup and Minyip. Bendi
Slide 24: We have a growing presence in all States
We have a growing presence in all States The Bendigo network in 2005 Bendigo Bank 152 Branches Community Bank® 157 Branches Total 309 Branches 24 }5 profit announcement Bendigo Bank
Slide 25: Balanced growth in new markets
Balanced growth in new markets Deposits seca ECS wwii VEC stem NSW ccmemm ~NSW mmm OLD mamma OLD we SA mmm SA wm SNA Kec eA TAS, wuamilia TAS —— ACT me ACT omnes OF Shore profit announcement
Slide 26: Bendigo has grown its customer base
Bendigo has grown its customer base 989,285 660,134 t 2 & n © N 5 profit announcement Bendigo Bank
Slide 27: Growth will continue
Growth will continue «30 new Community Banks® ¢ 5 new company owned branches ¢ 35% of all branches are < 3 years old ¢ 70% of the 35 new branches opening in 2006 will be outside Victoria er © profit announcement
Slide 28: With willing, engaged partners
With willing, engaged partners - 1,148 Community Bank® Directors ¢ 43,961 Community Bank® shareholders ¢ 777 Community Bank® staff ° $3 million paid to Community Bank® shareholders ¢ $3 million community sponsorship, donations and investments made from local Community Bank® profits 28 }5 profit anno
Slide 29: These are our partners, helping to run our business
These are our partners, helping to run our business profit announcement Bendigo Bank
Slide 30: Customer satisfaction continues to grow
Customer satisfaction continues to grow Bendigo Bank topped the Nielsen ’ ‘customer recommendation” ratings few O eWa to recomr mend us to others. Quantum Research Customer Satisfaction Survey — July 2005. * 48% advocacy rating * average satisfaction rating 8.2 out of 10 (up from 8.0 in 2002) « 43%
Slide 31: The prospects
The prospects a performance and the future Rob Hunt Group Managing Director 31 2005 profit announcement
Slide 32: Journey since bank conversion 1995
Journey since bank conversion 1995 Strategy has been consistent Major elements of business * distribution * product range - manufactured & imported * technology * balance sheet and risk Set out to improve each element of the business Primary concentration on * distribution (74 to 309 branches) * cus
Slide 33: Journey since bank conversion 1995
Journey since bank conversion 1995 We considered * history and perception of banks (opportunity to create a unique style of banking) * our strengths (had to be strategy we could successfully implement) * organisational structure required to improve retailing success We have * improved connection wit
Slide 34: Strategy and business
Strategy and business ‘Branded retail strategy’ Value strategy — not a price/volume strategy Reduced dependence on “sector” or product performance Maintained prudent approach and strong risk management Made substantial investment in: * wealth management services * business banking expansion * financ
Slide 35: Strategy and business
Strategy and business A strategy that is: * it produces greater commitment to buy and stay * it confirms our ongoing relevance Committed to branches * increases revenues per customer * facilitates effective distribution of Wealth Management * confirms customer/community focus * reinforces brand and
Slide 36: Strategy and business
Strategy and business The business is: Producing solid customer satisfaction outcomes Strengthening connection with customers Broadening distribution through alliances and joint ventures In retail distribution — brand, reputation and customer relationships matter. We are producing reliable growth in
Slide 37: The result
The result Good progression in underlying result Solid improvement in NPAT (before significant items) Strong contribution from all divisions (especially growth in contribution from newer initiatives) * Community Bank® Yoa COTO: * Elders Rural Bank JV * Tasmanian Banking Services JV 37 5 profit annou
Slide 38: The result
The result Interest margin reflects value of brand (2.76%) Growth in profit * in line with growth in customers and business volumes Committed to strategy * it will produce sustainable growth in shareholder value Growth is the outcome of strategy — not the strategy. 38 5 profit announcement Bendigo B
Slide 39: Our ongoing progress
Our ongoing progress BBL Revenue Diversification Diversity in revenue Net interest margin & non interest income (excluding significant items) increased distribution cose 394m $462m $293m capability Grown assets and liabilities in all interstate markets Approaching one million customers 2005 profit a
Slide 40: Future and prospects
Future and prospects Strong demand for Bendigo brand Continue distribution network expansion (35 branches in 2006) Improve relationships with existing and new customers (plus grow customer base) Grow wealth management and business banking contributions Improve JV and alliance contributions Improve o
Slide 41: Additional information
Additional information 41 5 profit announcement
Slide 42: Operating profit after tax
Operating profit after tax A$ Millions Net of significant items 42 5 profit announcement ) Bendigo Bank
Slide 43: Non interest income
Non interest income Deposit A/C & transaction fees $62.9m Loan Fees $26.0m Wealth Solutions Commissions $30.8m Share of Associates net profit/loss $20.5m Securitisation $5.0m Trustee, Management & Other Service $9.3m insurance Commissions $6.8m Other $10.0m HEE tl 43 > profit announcement
Slide 44: Non interest income
Non interest income AS Millions 2 a1 —_ oS o Yitity if 44 © profit announcement
Slide 45: Operating expenses
Operating expenses 2% Salaries & staff related costs $154.7m information technology costs $23.9m Occupancy $26.2m Management fees & expenses $16.7m Property, plant & equipment $15.0m Goodwill & Intangible amortisation $4.7m Other operating expenses $69.4m a BORER Sa =— — ) profit announcement
Slide 46: Operating expenses
Operating expenses A$ Millions 434.9 © profit announcement
Slide 47: Lending approvals
Lending approvals A$ Millions 6,078 5,873 Group loans under management increased by $1,610 to $12,866. w 5 profit announcement
Slide 48: Funds under management
Funds under management Sandhurst mortgage & cash funds 1,195.2 1,389.2 1,731.9 Sandhurst Industrial Share Fund 272.5 404.1 495.4. Bendigo Superannuation Plan 146.8 185.2 220.4 Géneral Retirement Plan 52.9 . 68.2 Bendigo Managed Funds 48.4 . 123.7 Other 17.6 70.4 48 5 profit announcement .) Bendigo B
Slide 49: Commercial loans
Commercial loans Total A$2,218.7m profit announcement Jun 2005 wumum, Property & business services wana Other mummn Whoiesaie trade uum Manufactudng, mmm Retail trade wmems Transport & storage wee Accom, cafés & restuarants Agriculture, forestry & fishing Cultural & recreational services Health & co
Slide 50: Loan portfolio
Loan portfolio By purpose By security ATTN i “i 2 Residential sees’ Residential amma Non-residential vain Commercial wniees Unsecured 50 © profit announcement
Slide 51: Return on ordinary equity
Return on ordinary equity %o IM © profit announcement
Slide 52: Non-accrual loans
Non-accrual loans A$ Millions Net Non Accrual 52 5 profit announcement ) Bendigo Bank
Slide 53: Provision for doubtful debts
Provision for doubtful debts AS Millions 68.9 54,6 iil )5 profit announcement (2 Bendigo Bank
Bendigo and Adelaide Bank — FY2005 Earnings Presentation on 6ix