Westpac Banking Corporation · ASX:WBC
Westpac Banking — Credit Suisse Asian Investment Conference March 2006
20 slides from Westpac Banking's conference presentation, Mar 31, 2006
Slide 1: Westpac Banking Corporation
Westpac Banking Corporation Philip Coffey Chief Financial Officer 31 March 2006
Slide 2: Westpac at a glance
Westpac at a glance • Established 1817 30 Sept 2005 • Top 40 bank globally1 Total assets A$260bn Cash return on equity 21% • Core markets - Australia, New Zealand and near Cost to income ratio 47% Pacific Market cap2 A$44bn • 8.3 million customers • Global sustainability leader • Consistent earnings
Slide 3: What is different about Westpac?
What is different about Westpac? Global leader in • Long run consistency in earnings sustainability • Top quartile employee engagement • Sustainability strategy embedded across the business Disciplined focus • Not chasing growth outside Australia, New on core markets Zealand and the near Pacific • N
Slide 4: Financial services environment remains positive
Financial services environment remains positive Australia and New Zealand credit growth (%) • Solid Australian economy • NZ market more challenging 17 but still delivering growth 15 13 • Credit growth remaining 11 above long term average 9 • Supportive asset quality 7 environment: 5 - Unemployment r
Slide 5: Operating environment challenging
Operating environment challenging Competitive Regulatory • Australian institutions • Compliance requirements expanding their footprint remain heavy • International players • International harmonisation re-emerging challenges: • Price increasingly used to - IFRS attract business - Basel II • Increase
Slide 6: Westpac's franchise health is strong…
Westpac’s franchise health is strong… Sustainability Committed Satisfied leader employees customers Leader in corporate Westpac employee commitment Westpac customer satisfaction1,2 governance 70 69 80% 68 Ranked No.1 bank 65 65 65 70% globally for sustainability 60 by Dow Jones 60 56 60% Sustainabil
Slide 7: … with a strong financial performance
… with a strong financial performance Consistent, high quality financial Performing well against peers performance and growth 12% cash EPS growth in 2005 - EPS 5 year CAGR 11% highest of major banks 20% ROE in 2005 - highest of Cash ROE 5 year average 21% major banks Maintained investment without Ex
Slide 8: Consistent returns over the long run
Consistent returns over the long run Cash earnings (A$m) 3,000 2,874 2,559 Cash earnings 2H 2,500 2,271 2,244 Cash earnings 1H 1,950 2,000 1,770 1,548 1,500 1,354 1,314 1,127 914 1,000 500 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Credit Suisse Asian Investment Conference March 2006 P
Slide 9: Growth across all operating business units
Growth across all operating business units Cash earnings (A$m) Contribution to FY05 cash earnings# Business & Business 24% Consumer Banking Consumer 29% Total BCB 53% BT Financial Group 10% FY03 FY04 Institutional Bank 18% FY05 New Zealand * 15% 0 500 1,000 1,500 * Cash earnings in NZ$ million # Com
Slide 10: BCB momentum continues to build
BCB momentum continues to build Business and consumer banking (BCB) - annualised growth1 27% 16% 15% 1H05 2H05 1Q06 14% 13% 12% 12% 10% 10% 9% 9% 8% 6% 6% 6% 4% 4% 4% 2% 0% 0% 3 Housing Lending2 Business Lending Other Personal Deposits (excl Lending (incl. credit working capital) cards) 1. Annualise
Slide 11: Housing loan growth back on track
Housing loan growth back on track Initiative Outcome Implemented a new sales management Productivity1 increased by 40% from program, ‘Westpac Way’ March 2005 to December 2005 More active broker engagement Uplift in broker sales - averaging 39% of total drawdowns since September 2005 Selective pricin
Slide 12: Business lending growing solidly
Business lending growing solidly Total business credit quarterly % growth1 by loan size2 • Westpac’s total Australian 10% business lending growing 8% Westpac System above system 6% - Strong gains in corporate and 4% middle markets 2% - Small business lending 0% Less than $2m More than $2m Total grow
Slide 13: Deposits market undergoing structural change
Deposits market undergoing structural change • Continuing to grow deposits in line with market • Portfolio composition is undergoing significant change with most growth in: - Flat fee transaction account (Westpac One) - High interest online savings account (Max-i Direct) • Move to Max-i Direct is im
Slide 14: New Zealand a tough environment
New Zealand a tough environment • Solid housing growth of NZ Housing market share monthly (%) 30 13.5%1, against 15% system Share of Growth Market Share growth 15 • Softer business confidence 0 impacting loan growth; market share stable -15 Mar-00 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Sep-00 Sep-01 Sep
Slide 15: Australasia's lead institutional bank
Australasia’s lead institutional bank Lead relationship market share1 (%) • Regional lead bank position 45 supported by: 40 - Strong relationship focus 35 30 - Superior transaction banking 25 platform 20 15 • Established specialised capital 10 2002-03 2003-04 2004-05 capability WBC Bank 2 Bank 3 Ban
Slide 16: Wealth management (BT) growing strongly
Wealth management (BT) growing strongly • Strong growth in Wrap and corporate Wrap FUA ($bn) super (pensions) boosting funds under 22 20 administration (FUA) 18 16 14 • 3 year Top quartile fund performance 12 10 • Insurance benefiting from positive 8 6 market conditions 4 2 0 • Good growth in margin
Slide 17: Asset quality remains sound
Asset quality remains sound Categories of stressed exposures as a % Consumer - 90 day delinquencies (%) of total commitments (%) 1.5 Consumer unsecured Housing 1.6% 1.07 1.02 0.90 0.96 1.0 0.82 0.71 0.77 Watchlist & substandard 0.63 1.4% 90 days past due well secured 0.5 Impaired 0.21 0.15 0.15 0.16
Slide 18: Positioned to create value into the future
Positioned to create value into the future Short term Medium term • Momentum restored in • Deliver on infrastructure Australian retail franchise investments including corporate online, Pinnacle, Reach • More aggressively pursuing growth in core markets • Further productivity opportunities in pipelin
Slide 19: Positive outlook remains
Positive outlook remains • Macro environment sound, Dividends per share (cents) 100 although competition tougher 100 • Westpac’s franchise health is 86 % strong, with matching financial 80 14 78 GR performance CA 70 0 yr 1 62 • Retail momentum restored 60 54 • Consistently returning value to 43 47 s
Slide 20: Disclaimer
Disclaimer The material contained in this presentation is intended to be general background information on Westpac Banking Corporation and its activities. The information is supplied in summary form and is therefore not necessarily complete. Also, it is not intended that it be relied upon as advice
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