Westpac Banking Corporation · ASX:WBC
Westpac Banking — Olympic Lecture Series (September 2000)
40 slides from Westpac Banking's conference presentation, September 2000
Slide 1: Innovative Investment and Financial Services in Australia
Olympic Lecture Series Innovative Investment and Financial Services in Australia Michael Hawker, Group Executive, Australian Business and Personal Banking, Westpac September 2000
Slide 2: Agenda
Agenda Olympic Lecture Series • Westpac Banking Corporation • Overview of Australian market • Trends in an innovative and sophisticated market • Sydney - a Regional Financial Centre 2
Slide 3: Disclaimer
Disclaimer Olympic Lecture Series The material contained in the following presentation is intended to be general background information on Westpac Banking Corporation and the Australia market at 18 September 2000. The information is supplied in summary form and is therefore not necessarily complete.
Slide 4: Westpac - Australia's First Bank
Westpac - Australia’s First Bank • Founded in 1817 - first bank in Australia Olympic Lecture Series • Listed on the Australian Stock Exchange since 1871 • First foreign bank listed on London Stock Exchange in 1853 • Listed on New York Stock Exchange (ADRs since 1989); Tokyo Stock Exchange since 1986
Slide 5: Westpac - Australia's First Bank
Westpac - Australia’s First Bank Olympic Lecture Series • Westpac Group is one of the 6 largest companies ranked by market capitalisation on Australian Stock Exchange • Leading provider of banking and financial services in Australia and New Zealand – 1 of 4 major banking organisations in Australia –
Slide 6: Westpac - Australia's First Bank
Westpac - Australia’s First Bank • Provide a broad range of banking and financial services Olympic Lecture Series – retail, commercial and institutional banking – investment management and insurance – finance company activities • 32,846 employees (at 31/3/00) • 7.5 million customers • access 24hrs 7
Slide 7: Westpac - an Olympic Sponsor
Westpac - an Olympic Sponsor Olympic Lecture Series • Importance of Olympics for Australia as a whole • 12,000 staff to the Olympics – Olympic Circle - staff reward and recognition – Volunteers – Banking sites • 15,000 customers to the Olympics • 50 Olympic athletes employed 7
Slide 8: WBC comparable in size with international banks competing in Asia
WBC comparable in size with international banks competing in Asia Market Capitalization (US$ billion) 150 Olympic Lecture Series 113.2 100 US$ billion 50 22 21 20.9 17 16.2 13 9.2 3.5 0 HSBC NAB HangSeng CBA DBS StanChart Westpac OCBC BEA Loans (US$ billion) 300 261.6 US$ billion 200 108.8 100 69.6
Slide 9: Comparable in size with international banks competing in Asia
Comparable in size with international banks competing in Asia Total Assets (US$ billion) 800 580.3 US$ bilion 600 Olympic Lecture Series 400 191.1 95.5 93.3 87.2 62 56.9 30.9 18.7 200 0 C BC A S A B ng rt CB BE DB c CB NA ha tpa HS Se C O es ng an W Ha St Shareholders' Equity (US$ billion) 35.3 40 U
Slide 10: Return on Equity of the Australian big banks
Return on Equity of the Australian big 4 banks is comparable to that of the overseas major banks % Olympic Lecture Series 30 20 Canada 10 Hong Kong 0 Japanese UK Banks -10 US Banks -20 Australia -30 1998 1999 Source: KPMG Financial Institutions Performance Survey 2000 10
Slide 11: Overview of Australian Financial Services Sector
Olympic Lecture Series Overview of Australian Financial Services Sector
Slide 12: Australian Economy
Australian Economy • Advanced industrial economy with a sophisticated manufacturing and services base. Manufacturing accounts for around 17% of Olympic Lecture Series Australia's GDP and services for nearly 65% • One of the fastest growing of OECD economies • Australia’s GDP in 1999 was US$388 billi
Slide 13: Australian Economy
Australian Economy • Australia's current competitive advantage in the region is set to Olympic Lecture Series continue, with analysts forecasting inflation rates for many other Asian economies to remain high in the medium to long term • 9 out of Australia's top 10 export markets are in the Asia-Paci
Slide 14: Demographics
Demographics • 19 million Australians - multicultural Olympic Lecture Series • 9.5 million Australians in workforce • Well educated, highly skilled - 45% of Australia's workforce has university, trade or diploma qualifications • Australia's management pool is around 8 times larger than that of Singa
Slide 15: Demographics
Demographics • Australia offers the familiarity of a Western business culture Olympic Lecture Series with a workforce skilled at operating in both Asian and Western business environments. • Cathay Pacific does much of its booking from Sydney using a multilingual workforce • Citibank processes many o
Slide 16: Computer Access per Capita in Australia is the highest in the world
Computer Access per Capita in Australia is 6 th highest in the world. Olympic Lecture Series Switzerland 408 New 417 Zealand Canad 476 a Denmark 477 Australia 492 Norway 507 Iceland 507 Finland 508 Swede 510 n USA 539 0 100 200 300 400 500 Computers per 1,000 Population Sources: IMD World Competitiv
Slide 17: Australian Stock Exchange is a major player in the region
Australian Stock Exchange is a major player in the region The ASX was ranked 13th in the world (in terms of market capitalisation) in April 2000 (highest in the Pacific, excluding Japan). Market Olympic Lecture Series Capitalisation(a) USA 49.7 Japan 13.0 United Kingdom 9.7 France 5.2 Germany 4.4 Sw
Slide 18: Australia leads the world in the levels of share ownership
Australia leads the world in the levels of share ownership Share Olympic Lecture Series Ownership(%)(a) Australia 54 Canada 52 US 48 UK 40 New Zealand 38 Germany 25 (a) Includes direct and indirect share ownership. Source: Australian Stock Exchange, 2000 Australian Share Ownership Study. 18
Slide 19: Australian foreign exchange market is amongst the top in the world
Australian’s foreign exchange market is amongst the top 10 in the world The Australian foreign exchange market is ranked 9th in the world by turnover; and the Australian dollar is the 7th most traded currency in the world. Olympic Lecture Series By market(a) By currency 1 United Kingdom US dollar 2
Slide 20: Size of the Australian bond market is significant in own right
Size of the Australian bond market is significant in own right Olympic Lecture Series Debt Securities on Issue in Australia $(A) billion $(A) billion 200 200 190 190 180 180 170 170 160 160 150 150 140 140 130 130 120 Non-Government 120 110 Commonwealth & State Government 110 100 100 Apr-96 Apr-97 A
Slide 21: Managed Funds is a large and growing industry in Australia
Managed Funds is a large and growing industry in Australia Australian Funds under Management Olympic Lecture Series $A billion 800 700 600 500 400 300 200 100 0 Mar-90 Mar-91 Mar-92 Mar-93 Mar-94 Mar-95 Mar-96 Mar-97 Mar-98 Mar-99 Mar-00 Source: ABS Cat. 5655.0, Managed Funds Australia, Table 1 and
Slide 22: Australian Funds under Management industry compares favourably with others in the region
Australian Funds under Management industry compares favourably with others in the region Olympic Lecture Series • Australia is the largest regional centre for institutional equities investment outside of Japan. · In 1999, Australian institutional equity assets totalled US$116.4 billion. · By compari
Slide 23: Sydney Futures Exchange - significant international player
Sydney Futures Exchange - significant international player In1999 the SFE was the largest financial futures and options exchange in the Asia- Pacific region. In global terms, the Futures Industry ranked the SFE 12th in 1999 (by futures and options volumes). Olympic Lecture Series Rank 1 European Exc
Slide 24: Total OTC Financial Markets
Total OTC Financial Markets Annual Turnover (AUD) billion Olympic Lecture Series 30,000 25,000 20,000 15,000 $ bn 10,000 5,000 0 94-95 95-96 96-97 97-98 98-99 Source: 199 AFMA Report 24
Slide 25: Trends in an innovative and sophisticated market
Olympic Lecture Series Trends in an innovative and sophisticated market
Slide 26: Financial Services Innovation in an e-World
Financial Services Innovation in an e-World • Growth in technology and early adopter community has Olympic Lecture Series prompted significant industry initiative: – ERG and smart card technology – Key Corp using Australia as test market for ideas – WAP technology with mobile phones • Innovation in
Slide 27: Financial Services Innovation in an e-World
Financial Services Innovation in an e-World § Electronic processing: Olympic Lecture Series – Secure payments on the net • sophisticated online banking and broking capabilities • third party payments – Straight through processing of credit cards over the net – Ability to track home loan progress ove
Slide 28: Financial Services Innovation in an e-World
Financial Services Innovation in an e-World § Australian Stock Exchange (ASX) - developing international alliances Olympic Lecture Series – Singapore Stock Exchange - agreement to develop co- trading between markets – Global Equit Market - includes ASX, Bolsa de Valores de Sau Paulo (Brazil), Eurone
Slide 29: Ethical Investing and Screened Funds
Ethical Investing and Screened Funds § Ethical and screened investment funds – Westpac Olympic Lecture Series was first big bank in Australia to offer a screened investment when it launched the Australia Eco-Share Fund (screened for environment and social policies) § Westpac also introduced Australi
Slide 30: Innovations in Asset and Risk Management
Innovations in Asset and Risk Management Olympic Lecture Series • Asset Management – Home loan securitisation in Australia – Credit derivatives market developed • Risk Management – Dynamic provisioning for credit risk in Australia 30
Slide 31: Impact of Technology
Impact of Technology Olympic Lecture Series Advances in technology and communication are: • Driving costs down • Forcing single site processing • Single trading centres per time zone • Electronic delivery of product • Along with airline travel, changing the nature of geographical boundaries - reduci
Slide 32: Sydney - a Global Financial Centre
Olympic Lecture Series Sydney - a Global Financial Centre
Slide 33: Sydney - a Global Financial Centre
Sydney - a Global Financial Centre § Most sophisticated and deregulated domestic banking Olympic Lecture Series system in the region § Progressive reform and deregulation of markets over past 30 years § 1996 Uniform Consumer Credit Code § 1997 Wallis Report - key recommendations included: – rational
Slide 34: Sydney - a Global Financial Centre
Sydney - a Global Financial Centre § 1998 rationalisation of financial sector regulation: Olympic Lecture Series – Australian Securities and Investments Commission (ASIC) - monitoring and promoting market integrity and consumer protection in relation to the Australian financial system, provision of
Slide 35: Sydney - a Global Financial Centre
Sydney - a Global Financial Centre § 1998 introduction of real time gross settlement (RTGS) Olympic Lecture Series for high value payments, offering a world standard clearance and settlement infrastructure § 2000 - major tax reform to encourage investment in services rather than physical resources §
Slide 36: Sydney - a Global Financial Centre
Sydney - a Global Financial Centre • Cost competitive location – Salaries for professionals and executives are 25% lower Olympic Lecture Series than Singapore and 45% lower than Hong Kong or Tokyo – CBD offices space costs are 33% to 50% lower than similar property in Tokyo, Hong Kong, Singapore or
Slide 37: Sydney - a Global Financial Centre
Sydney - a Global Financial Centre § Political and economic stability Olympic Lecture Series § Strong, stable, fair and equitable legal and regulatory framework • Ideal time zone fit between New York and London § Proactive supportive governments – both federal and state § Leading international stock
Slide 38: Recent Finance Sector Wins for Sydney
Recent Finance Sector Wins for Sydney Name of Company Date Operations in Sydney Olympic Lecture Series Citibank October 1998 Asia-Pacific foreign exchange regional processing Deutsche Bank January 1999 Asia Pacific regional responsibility for the Group’s metals trading, and European and Australian f
Slide 39: Recent Finance Sector Wins for Sydney
Recent Finance Sector Wins for Sydney Name of Company Date Operations in Sydney HSBC Bank October 1999 Opened its first branch in the Asia Pacific under its new global branding Olympic Lecture Series in Sydney. Royal Bank of Scotland October 1999 Re-opened their Australian operation in Sydney, after
Slide 40: Largest overseas owned banks operating in Australia
10 largest overseas owned banks operating in Australia in April 2000 were: Olympic Lecture Series Total Assets Country $(A) million BankWest** UK 17,523 Citibank Group US 15,949 Deutsche Bank Germany 15,383 HSBC Bank Group UK 7,874 Banque Nationale de Paris France 7,769 Chase Manhattan Bank US 6,770
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