Bendigo & Adelaide Bank Ltd. · ASX:BEN
Bendigo & Adelaide Bank — H1 2006 Earnings Presentation
54 slides from Bendigo & Adelaide Bank's earnings presentation, Feb 13, 2006
Slide 1: Interim profit announcement
13 February 2006 interim profit announcement 1
Slide 2: Agenda
Agenda Craig Langford Chief Financial Officer The result Greg Gillett Chief General Manager Strategy & Staff The progress Rob Hunt Group Managing Director The prospects 2
Slide 3: The result
The result Craig Langford Chief Financial Officer 3
Slide 4: Performance summary
Performance summary Underlying Earnings $65.7m $76.8m 16.9% Profit after tax $44.9m $53.2m 18.5% Profit before significant items available for distribution to ordinary shareholders $41.0m $47.5m 15.9% Loans under management $12,128m $13,412m 10.6% Retail deposits and funds under management $12,197m
Slide 5: Significant items
Significant items December 2005 Gain on reduction in ownership of Community 1.8 Telco Australia to 50% (previously 90%) Relocation to Docklands Administration Centre in Melbourne (0.5) December 2004 Sale of IOOF Holdings Ltd shares 3.5 Sale of Cashcard shares 0.4 Total i) Bendigo Bank announcement
Slide 6: Profit before significant items available for distribution to ordinary shareholders
Profit before significant items available for distribution to ordinary shareholders A$ Millions 6
Slide 7: Interest margin
Interest margin % Net interest margin Community Bank & Alliances Bendigo Bank announcement
Slide 8: Analysis of net interest margin
Analysis of net interest margin % 8
Slide 9: Core retail deposit base: Funding mix
Core retail deposit base: Funding mix % 9
Slide 10: Profit contributions
Profit contributions A$ Millions 10
Slide 11: Efficiency ratio: Expense/income
Efficiency ratio: Expense/income % 11
Slide 12: Group managed loans
Group managed loans A$ Millions 12
Slide 13: Retail funds
Retail funds 0 A$ Millions 14.3% 13,947 12,197 2,952 10,376 1,980 8,396 On balance sheet Funds under management Bendigo Bank announcement
Slide 14: Shareholder returns
Shareholder returns Cents 14
Slide 15: Non-accrual loans Provision for doubtful debts
Non-accrual loans Provision for doubtful debts A$ Millions A$ Millions 15
Slide 16: Gross impaired loans/ total assets
Gross impaired loans/ total assets % 16
Slide 17: Capital adequacy
Capital adequacy 10.26 10.48 1.96 2.32 8.30 8.16 10.76 Tier 1 less deductions ACE Ratio as at 31 December 2005 5.80% 17 Bendigo Bank announcement
Slide 18: The progress
The progress Greg Gillett Chief General Manager Strategy & Staff 18
Slide 19: Bendigo's strategic position
Bendigo’s strategic position The Bendigo Group is a financial solutions distribution organisation. We aim to attract and retain business by: • offering a premium service • engaging with communities to enhance their prospects 19
Slide 20: Bendigo's strategic position
Bendigo’s strategic position Which, in turn, delivers; • a high value proposition for customers (not price led) • strong customer acquisition and retention rates • deeper customer relationships 20
Slide 21: Bendigo's strategic application
Bendigo’s strategic application Continued expansion of physical and online networks. Continued expansion of product range. Continued investment in brand positioning. 21
Slide 22: Bendigo's strategic outcomes
Bendigo’s strategic outcomes • Continued diversification of our earning base. • Conversion of opportunity with our 1 million customers. • Maximising balance sheet efficiency and aligning profit, ROE and EPS growth outcomes. • Improved prospects for our customers and their communities. 22
Slide 23: We have made continued progress with distribution capacity
We have made continued progress with distribution capacity 16 new Community Bank® branches opened. 4 new Company Branches opened. 48 new ATMs installed. 23
Slide 24: We have improved our distribution spread
We have improved our distribution spread More than half our new branches are outside Victoria. Eftpos Merchant numbers increased by 902 to 8,165. 40% of our new business is sourced outside Victoria. 24
Slide 25: Balanced growth in new markets
Balanced growth in new markets 25
Slide 26: We have invested in people capacity
We have invested in people capacity • 9 additional Business Bankers • we’ve reduced Financial Planner numbers in order to reshape that part of the business. And we continue to acquire healthy levels of profitable new business • now over 1 million customers, growing by approximately 6,000 per month.
Slide 27: Prospects for sustainability are good
Prospects for sustainability are good • 173 Community Bank® branches • > 1,300 Community Bank® directors • > 45,000 Community Bank® shareholders • $3.5M paid to Community Bank® shareholders • $3.8M community dividends paid from local Community Bank® profits. 27
Slide 28: Customer satisfaction remains 'best of breed'
Customer satisfaction remains ‘best of breed’ Customer Satisfaction remains high; Customer Satisfaction* BBL 8.2 Others 7.2 Advocacy* BBL 80% Others 63% * Source: Quantum Market Research 2005. 28
Slide 29: Opportunities continue
Opportunities continue • 30 new Community Bank® branches in F06. • New company owned branches where “hub” support is warranted to the Community Bank® structure. • 28% of all branches less than 3 years old. • Majority of distribution expansion outside of Victoria. 29
Slide 30: Strong reputation and new customer base
Strong reputation and new customer base = strong focus on accelerating the depth of the relationship with our 1 million customers Active calling & relationship programs • Credit Cards • Loan Retention • Margin Lending • General Insurance 30
Slide 31: Strategy and prospects
Strategy and prospects Rob Hunt Group Managing Director 31
Slide 32: Our 'branded retail' strategy is producing…
Strategy Our ‘branded retail’ strategy is producing… Good progression in profit performance Growth at profitable prices Strong customer growth Ongoing demand for Bendigo’s solutions Stronger relationships with • Communities • Consumers • SMEs • Partners Ability to focus on premium service offering f
Slide 33: Continued investment is enabling expansion of…
Strategy Continued investment is enabling expansion of… Physical and on-line distribution capabilities Product range, including Wealth Management and Planners Business Banking Agribusiness Lending Invoice Discounting (Oxford) etc Skill base, to support improved range of services Our prospects, throu
Slide 34: Strategy is enabling us to…
Strategy Is enabling us to… Diversify the Group’s revenue base Convert brand strength into business/customer growth Fully utilise the expanded distribution network Maximise balance sheet efficiency Build strong relationships with our customers and communities 34
Slide 35: The Result half year to December 2005
The Result half year to 31 December 2005 Strong improvement in NPAT (excluding significant items) 16% improvement Improved alignment between NPAT and Cash EPS (up 18.1%) outcomes (as promised) Interim dividend increased by 3¢ to 22¢ (16% increase) Solid contribution from all divisions Strong growth
Slide 36: The Result demonstrates…
The Result demonstrates… Excellent margin performance (2.66%) Represents the brand value Significant contribution from alliances Elders Rural Bank Community Bank® Tasmanian Banking Services etc Good reliable growth in overall financial performance Progressive improvement in ROE and efficiency ratios
Slide 37: Strategic priorities unchanged
Strategic priorities unchanged Maintain focus on building relationships with the expanded customer base Continue improvement in performance to increase shareholder value Further diversify revenue base and reduce dependency on sector performance Further improve connection with customers/communities a
Slide 38: Future and prospects
Future and prospects Demand for Bendigo remains strong Distribution network will continue to grow (35 branches will open in 2006) Contribution from alliances and joint ventures likely to continue to improve as they mature Wealth Management contribution is expected to improve (with reshaping and inte
Slide 39: Future and prospects
Future and prospects Competitive market expected to remain - requires a continued focus on growth at profitable prices Deepen relationships with existing customer base Complete integration of Community Bank®, Wealth Management, Planners in Retail Network Produce reliable improvement in financial per
Slide 40: Questions
Questions Bendigo Bank announcement
Slide 41: Interim profit announcement
13 February 2006 interim profit announcement 41
Slide 42: Additional Information
Additional Information Bendigo Bank announcement
Slide 43: Profit after tax
Profit after tax A$ Millions 43
Slide 44: Non interest income
Non interest income % $81.7m $95.5m Dec 2004 Dec 2005 Deposit A/C & transaction fees Trustee & service fees Wealth Solutions commissions Other Significant items Loan fees JV contributions Insurance commissions 44 Bendigo Bank announcement
Slide 45: Non interest income
Non interest income A$ Millions 45
Slide 46: Operating expenses
Operating expenses $151.7m Bendigo Bank $170.4m Dec 2005 Staff related costs Occupancy costs Information technology costs Property, plant & equipment costs Fees & commissions Communications, postage & stationery Advertising & promotions Other product & services delivery costs Other expenses Amortisa
Slide 47: Operating expenses
Operating expenses A$ Millions 47
Slide 48: Lending approvals
Lending approvals A$ Millions 48
Slide 49: Funds under management
Funds under management A$ Millions 49
Slide 50: Funds under management
Funds under management A$ Millions 50
Slide 51: Commercial loans
Commercial loans % $2,052.8m $2,374.3m 1% 1% 2% 1% 2% 1% Dec 2004 Dec 2005 mmm Property & business services mmm Health & community service === Communication services mmm Transport & storage Personal & other services == Manufacturing @mmm= Finance & Insurance mmm Accom, cafes & restaurants = Other mm
Slide 52: Loan portfolio
Loan portfolio % By purpose By Security 52
Slide 53: Return on ordinary equity
Return on ordinary equity % 53
Slide 54: Total dividends paid
Total dividends paid Cents per share (fully franked) 54
Bendigo and Adelaide Bank — H1 2006 Earnings Presentation on 6ix