Bendigo & Adelaide Bank Ltd. · ASX:BEN
Bendigo & Adelaide Bank — Bendigo 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 © Bendigo Bank
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 nN Bendigo Bank
Slide 3: The result
The result Craig Langford Chief Financial Officer Bendigo Bank
Slide 4: Performance summary
Performance summary Underlying Earnings Profit after tax Profit before significant items available for distribution to ordinary shareholders Loans under management Retail deposits and funds under management Cash earnings per share Dividends ~ interim Bendigo Bank $41.0m $12,128m $12,197m 29.3 cents
Slide 5: Significant items
Significant items AS Millions | December 2005 Gain on reduction in ownership of Community 1.8 Telco Australia to 50% (previously 90%) Relocation to Docklands Administration Centre in Melbourne | (Q.5) December 2004 Sale of OOF Holdings Ltd shares 3.5 Sale of Cashcard shares 0.4 nm Sr i ( _tmtm™m™m™C
Slide 6: Profit before significant items available for distribution to ordinary shareholders
Profit before significant items available for distribution to ordinary shareholders A$ Millions Non-interest Bad debts Expenses income $6.2m {($4.3.0m) — Net interest Tax Pref Share income = 6m) dividend *EREL Minority SiL.aim ($4. (oham) {$3.0m) interest ao —=— $47.5m $41.0m *GRCL — General Reserve
Slide 7: Interest margin
Interest margin % 2.68 2.67 2.66 Community Bank & Alliances | Net interest margin | / Bendigo Bank announcement
Slide 8: Analysis of net interest margin
Analysis of net interest margin Competition & change in Funding mix product mix Cash to bills 0.04% (0.08%) spread Soa nae eae EE) ary 261% 2.66% Bendigo Bank nouncement
Slide 9: Core retail deposit base: Funding mix
Core retail deposit base: Funding mix announcement
Slide 10: Profit contributions
Profit contributions A$ Millions a cd ) Dec 2004 § Dec 2005 40 ) Bendigo Bank announcement
Slide 11: Efficiency ratio: Expense/income
Efficiency ratio: Expense/income %o 70.2 announcement
Slide 12: Group managed loans
Group managed loans A$ Millions 6% 13,442 | On Balance S| |
Slide 13: Retail funds
Retail funds A$ Millions 14.3% 13,947 On balance sheet _ Funds under management / Bendigo Bank
Slide 14: Shareholder returns
Shareholder returns Cents
Slide 15: Non-accrual loans Provision for doubtful debts
Non-accrual loans Provision for doubtful debts AS Millions AS Millions 88.7 17.7 Gen prov/*GREL ie *GROL ~ General Reserve Credit Loss. 15 tannountement
Slide 16: Gross impaired loans/ total assets
Gross impaired loans/ total assets % Bendigo Bank announcement
Slide 17: Capital adequacy
Capital adequacy 40.26 10.48 40.76 Tis} 1 less deductions ACE Ratio as at 34 December 2005 5.80% 47
Slide 18: The progress
The progress Greg Gillett chief General Manager Strategy & Staff / Bendigo Bank announcement
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 Bendigo Bank nouncement
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 Bendigo Bank nouncement
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. Bendigo Bank
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. ) Bendigo Bank
Slide 23: We have made continued progress
We have made continued progress with distribution capacity 16 new Community Bank® branches opened. 4 new Company Branches opened. 48 new ATMs installed. srofitannountement
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. ) Bendigo Bank nouncement
Slide 25: Balanced growth in new markets
Balanced growth in new markets Loans Deposits esnwmims NIC sommes WA mm NSW ue TAS sume OLD imme OS /OTHER announcement
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. / Bendigo Bank
Slide 28: Customer satisfaction
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. ¢ ) Bendigo Bank
Slide 29: Opportunities continue
Opportunities continue « 30 new Community Bank® branches in FO6. * 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. ) Bendigo Bank nouncement
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 nouncement
Slide 31: Strategy and prospects
Strategy and prospects Rob Hunt Group Managing Director (© Bendigo Bank profitannouncement
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
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, thr
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 ) Bendigo Bank nouncement
Slide 35: The Result
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 rati
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
Slide 41: Interim profit announcement
13 February 2006 interim profit announcement © Bendigo Bank
Slide 42: Additional Information
Additional Information (© Bendigo Bank
Slide 43: Profit after tax
Profit after tax A$ Millions 41.0 Profit available for distribution to ordinary a Reported i Before significant items shareholders before significant items announcement
Slide 44: Non interest income
Non interest income % ‘e $81.7m ein iim Dec 2005 Deposit A/C & transaction fees Trustee & service fees Wealth Solutions commissions Other Significant items Loan fees JV contributions Insurance commissions 44 Bendigo Bank announcement
Slide 45: Non interest income
Non interest income A$ Millions ) Bendigo Bank
Slide 46: Operating expenses
Operatin ie ” a Bendigo Bank Dec 2004 g expenses $154.7m Dec 2005 Staff related costs Occupancy costs information technology costs Property, plant & equipment costs Fees & commissions Communications, postage & stationery Advertising & promotions Other product & services delivery costs Other expenses
Slide 47: Operating expenses
Operating expenses A$ Millions Bendigo Bank
Slide 48: Lending approvals
Lending approvals A$ Millions 3,115 3,098 2,987 / Bendigo Bank announcement
Slide 49: Funds under management
Funds under management A$ Millions Sandhurst mortgage & cash funds 1,313.7 1,637.3 Sandhurst Industrial Share Fund 351.7 480.1 Bendigo Superannuation Pian 165.1 203.0 General Retirement Plan 54.6 63.4 Bendigo managed funds 73.5 115.3 Other 69.0. H Bendigo Bank nnouncement
Slide 50: Funds under management
Funds under management AS Millions 2,951.9 | Sandhurst mortgage | Becash funds tannouncement
Slide 51: Commercial loans
Commercial loans % $2,052.8m $2,374.3m Dec 2005 seme Property & business services teemmemt Health & community service Communication services mmm Transport & storage Persona! & other services toa’ Manufacturing mete Finance & Insurance ismamt Accom, cafes & restaurants sematet Other uma Construction
Slide 52: Loan portfolio
Loan portfolio By purpose By Security | Residential P Residentil Bendigo Bank nnouncement
Slide 53: Return on ordinary equity
Return on ordinary equity %o 43.53 44.44 12,18 ) Bendigo Bank announcement
Slide 54: Total dividends paid
Total dividends paid Cents per share (fully franked) Bendigo Bank nnouncement