Bendigo & Adelaide Bank Ltd. · ASX:BEN
Bendigo & Adelaide Bank — H1 2007 Earnings Presentation
36 slides from Bendigo & Adelaide Bank's earnings presentation, Feb 12, 2007
Slide 1: Interim profit announcement
12 February 2007 interim profit announcement 1
Slide 2: Agenda
Agenda Craig Langford Chief Financial Officer The result Mike Hirst Chief Operating Officer The next growth phase Rob Hunt Managing Director Brand strategy is delivering 2
Slide 3: The result
The result Craig Langford Chief Financial Officer 3
Slide 4: Consistent, reliable earnings growth
Consistent, reliable earnings growth Profit A$ Millions 4
Slide 5: Profit analysis
Profit analysis Cash basis earnings A$ Millions 5
Slide 6: Quality earnings - growth at profitable prices
Quality earnings - growth at profitable prices Interest margin % 6
Slide 7: Quality earnings - growth at profitable prices
Quality earnings - growth at profitable prices Analysis of net interest margin % 7
Slide 8: Consistent, measured growth
Consistent, measured growth Group managed loans / retail funds Retail funding mix A$ Millions % 8
Slide 9: Diversification of revenue
Diversification of revenue Profit contributions before tax & significant items A$ Millions 9
Slide 10: Diversification of revenue
Diversification of revenue Non-interest income $ Millions 10
Slide 11: Revenue growth based on judicious investment
Revenue growth based on judicious investment Operating expenses A$ Millions 11
Slide 12: Growing shareholder returns
Growing shareholder returns Earnings and dividends Return on equity cents per share % 12
Slide 13: Excellent credit quality
Excellent credit quality Loan loss provisions and reserves . . 61.4 Non-accrual loans Gross impaired AS Millions A$ Millions loans/total assets ss27 ie 9 17.7 a 4923 8.9 10.2 8.9 12.8 8.0 8.8 10.5 es 42 0.07 ss 40.4 38.8 42.4 8.9 8.8 8.6 a 6© bec 2008 tee 2008 ae 2008 Dec 2004 Dec 2005 Dee 2006 CE E
Slide 14: Strong capital position
Strong capital position Capital adequacy Adjusted common % equity ratio % 40.76 10.95 2.57 2.78 6.57 5.72 7.98 8.38 ‘Deo 2005 Dec 2006 14 interim profit announcement Bendigo Bank
Slide 15: The next growth phase
The next growth phase Mike Hirst Chief Operating Officer 15
Slide 16: Our proposition
Our proposition Bendigo Bank is a financial solutions distribution organisation: • Offering a premium service • Providing a high value proposition; not price led • Building relationships with consumers, SMEs and partners • Engaging with communities to enhance their prospects 16
Slide 17: Our progress
Our progress • Bendigo has: – a brand well regarded in the marketplace – highest customer advocacy* – customer satisfaction above 95%# – grown customer acquisition (MFI) by 30% over the past 2 years# – become the preferred bank for 19% of consumers looking to change their main financial institution#
Slide 18: Driving our network growth
Driving our network growth • Structure focused on relationship sales and service • Our unique branch staff training program “Being the Bendigo” continues to roll out • Even contribution to growth across all states • Business banking performing strongly • Customer acquisition remains very strong • El
Slide 19: Wealth Management is growing
Wealth Management is growing • The Wealth Solutions division ($3.3bn FUM) contributed $28m in revenue and $14m before tax six months to December 2006 • Based on median P/E of listed wealth management companies (19 x ’07F), Bendigo’s wealth business is worth around $360m • Exposure to sector is stron
Slide 20: New businesses and innovative product remain a focus
New businesses and innovative product remain a focus • Homesafe Solutions • Strategic Payment Services • Generation Green and Carbon Offsets • Elders Rural Bank • Tasmanian Banking Services • Community Enterprise partnerships: – Banking – Telco – Foundation – Biodiesel 20
Slide 21: What about the future?
What about the future? • One view of the industry short term : – market share driven – a return to customer centric values – branches are back – further commoditisation and margin contraction • In the medium term: – networks no longer primarily transaction based – trusted brand and advice is activel
Slide 22: Implications?
Implications? • Economics of physical networks driven by customer acquisition, retention and depth of relationship • Differentiated and valued brand vital to enable higher margins • Customer satisfaction and trust will be important in driving customer advocacy • Ensuring staff are engaged and cultur
Slide 23: In conclusion, the Bendigo…
In conclusion, the Bendigo… • Has diversified the revenue base – strongly growing network revenues – relevant business banking capability – significant wealth management investment – investments in new and innovative businesses – business is progressively maturing • Is strategically strongly positio
Slide 24: Brand strategy is delivering
Brand strategy is delivering Rob Hunt Managing Director 24
Slide 25: Journey
Journey • Bendigo’s consistent approach • Branded retail strategy • Expanded branch network and distribution options • Expanded the product range • Expanded the skill base (to support the larger product range) • Sustainably growing profitability and shareholder value • Building prospects and flexibi
Slide 26: Strategy – Focus has been on the major business elements
Strategy – Focus has been on the major business elements • Distribution • Product • Technology (including payments systems) • Balance Sheet & Risk “All Businesses and Alliances contribute to one or more of these Group businesses” 26
Slide 27: Strategy – We set out to...
Strategy – We set out to... • Build a brand and reputation • Build customer demand and commitment • Increase coverage and diversity of markets serviced • Build customer base – relationships • Progressively bring network to maturity • Grow profit and EPS outcomes sustainably “A different bank with a
Slide 28: Delivering on promised performance
Delivering on promised performance • Demonstrated on any 5 or 10-year comparisons • Consistently achieved Guidance • Growing profitability from strong revenue growth • Continued to invest: – wealth management – business banking – distribution – expanding payment system participation – Customers Ltd
Slide 29: Half-yearly performance highlights. The Result
Half-yearly performance highlights. The Result • NPAT before significant item $59.9m (15.2% increase) • Cash EPS 39.0cents (12.4% increase) • ROE (cash basis) 14.8% (14.1% Dec 2005) • High quality of earnings 29
Slide 30: Future – Prospects
Future – Prospects Doing more with existing customers Focus on quality service and customer relationships – community connection Further expand distribution capability Progressively add to the product range Expand the Wealth Solutions business and contribution Build business banking participation Ma
Slide 31: Guidance
Guidance On track to achieve our guidance of at least 10% improvement on EPS for FY07 “Happy with progress as a retail business” 31
Slide 32: Additional information
Additional information 32 interim profit announcement Bendigo Bank
Slide 33: Funds under management
Funds under management A$ Millions 33
Slide 34: Commercial loans
Commercial loans % ( at 1% mmm Property & business services Bree Fetallitrade mmm Construction omer beta) mmm Wholesale trade jm" Health & community service uty - meme Finance & Insurance j=" Cultural & recreational services =e Education mmm Agriculture, forestry & fishing sums Personal & other serv
Slide 35: Loan portfolio
Loan portfolio By purpose By security % 35
Slide 36: Balanced growth in new markets
Balanced growth in new markets Loans Deposits % 36
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