Bendigo & Adelaide Bank Ltd. · ASX:BEN
Bendigo & Adelaide Bank — FY2005 Earnings Presentation
53 slides from Bendigo & Adelaide Bank's earnings presentation, August 2005
Slide 1: 2005 profit announcement
2005 profit announcement 5 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 2
Slide 3: The result
The result Craig Langford Chief Financial Officer 3
Slide 4: Performance summary
Performance summary Underlying Earnings $125.0m $146.4m 17.1% 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 $12,866m 14.3% Cash earnings per share 58.5 cents 65.6 cents 12.1% Dividends — total 40.0 cents 45.0 ce
Slide 5: Significant items
Significant items A$ Millions Sale of IOOF shares (16% of holding) aa 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 Total 3.0 05 prof
Slide 6: Profit performance
Profit performance A$ Millions 6
Slide 7: Interest margin
Interest margin % 3.02 ze? 2.91 0.29 5 2.841 a 0.41 2.73 2.40 Jun 03 ‘Jun 04 Dec 04 Jun 05 Net interest margin Community Bank & Alliances 5 profit announcement Bendigo Bank
Slide 8: Analysis of interest margin
Analysis of interest margin % 8
Slide 9: Bank deposit base
Bank deposit base 11 16 89 84 2003 2004 2005 | Retail | Wholesale 5 profit announcement Bendigo Bank
Slide 10: Profit contributions
Profit contributions A$ Millions 10
Slide 11: Efficiency ratio: Operating expense/income
Efficiency ratio: Operating expense/income % 11
Slide 12: Total Group-managed assets
Total Group-managed assets A$ Millions 12
Slide 13: Retail funds
Retail funds A$ Millions 13.8% 12,753 41,214 2,710 9,296 1,674 10,043 7,622 On balance sheet Funds under management 13 5 profit announcement Bendigo Bank
Slide 14: Shareholder returns
Shareholder returns Cents 14
Slide 15: Asset quality: impaired loans/total assets
Asset quality: impaired loans/total assets % General provisions maintained at 0.79% of risk-weighted assets 15
Slide 16: Capital adequacy
Capital adequacy 10.58 10.35 10.39 197 2.38 8.38 8.01 5 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
Slide 18: The strategy
The strategy Mike Hirst Chief General Manager Solutions & Strategy 18
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
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 The above has generated a significant opportunity given growth in customers, footprint and product offering. 20
Slide 21: Bendigo's strategy
Bendigo’s strategy Focus over the medium term on: • Continuing to diversify the Bank’s earnings base • Converting our brand strength into business with potential customers • Maximising balance sheet efficiency • Developing the prospects of our customers and their communities A branded retail strateg
Slide 22: The progress
The progress Greg Gillett Chief General Manager Retail 22
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. 23
Slide 24: We have a growing presence in all States
We have a growing presence in all States 24
Slide 25: Balanced growth in new markets
Balanced growth in new markets 25
Slide 26: Bendigo has grown its customer base
Bendigo has grown its customer base 26
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 27
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
Slide 29: These are our partners, helping to run our business
These are our partners, helping to run our business 29
Slide 30: Customer satisfaction continues to grow
Customer satisfaction continues to grow Bendigo Bank topped the Nielsen "customer recommendation" ratings for the March 2005 quarter, with 92% of our satisfied customers happy to recommend us to others. Quantum Research Customer Satisfaction Survey – July 2005. • 48% advocacy rating • average satisf
Slide 31: The prospects
The prospects Our ‘bank’ journey, performance and the future Rob Hunt Group Managing Director 31
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: Committed to customer and communities • 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/c
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® • Wealth Solutions (incorporating Sandhurst Trustees) • Elders Rural Bank JV • Tas
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
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 capability Grown assets and liabilities in all interstate markets Approaching one million customers 39
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 Bendigo Bank
Slide 42: Operating profit after tax
Operating profit after tax A$ Millions 42
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 $10.0m 43 Bendigo Bank
Slide 44: Non interest income
Non interest income A$ Millions 44
Slide 45: Operating expenses
Operating expenses mmm Salaries & staff related costs $154.7m m= Information technology costs $23.9m. = Occupancy $26.2M == Management fees & expenses $16.7m mmm Property, plant & equipment $15.0m == Goodwill & Intangible amortisation $4.7m mmm Other operating expenses $69.4m 45 05 profit announceme
Slide 46: Operating expenses
Operating expenses A$ Millions 46
Slide 47: Lending approvals
Lending approvals A$ Millions Group loans under management increased by $1,610 to $12,866. 47
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 212-5 404.1 495.1 Bendigo Superannuation Plan 146.8 185.2 220.4 General Retirement Plan 28) 60.2 68.2 Bendigo Managed Funds 48.4 94.6 123.7 Other 17.6 25.6 70.4 Total 1,733.4 2,158.9 2,709.
Slide 49: Commercial loans
Commercial loans Total A$2,218.7m 49
Slide 50: Loan portfolio
Loan portfolio By purpose By security meee Residential j=" Residential wm Non-residential === Commercial mmm Unsecured 50 ) profit announcement Bendigo Bank
Slide 51: Return on ordinary equity
Return on ordinary equity % 51
Slide 52: Non-accrual loans
Non-accrual loans A$ Millions 52
Slide 53: Provision for doubtful debts
Provision for doubtful debts A$ Millions 53
Bendigo and Adelaide Bank — FY2005 Earnings Presentation on 6ix