Bendigo & Adelaide Bank Ltd. · ASX:BEN
Bendigo & Adelaide Bank — H1 2005 Earnings Presentation
36 slides from Bendigo & Adelaide Bank's earnings presentation, February 2005
Slide 1: Interim Profit 2005
Interim Profit 2005 Presenters The financial result Craig Langford Chief Financial Officer Strategy and outlook Rob Hunt Managing Director 1
Slide 2: The financial result
The financial result Craig Langford Chief Financial Officer 2
Slide 3: Performance summary
Performance summary A$ Millions Dec-03 Dec-04 Net Profit after Income Tax 34.6 42.8 Net profit before specific items 33.2 38.9 Lending approvals 3,098 2,987 Retail deposits 8,396 9,629 Return on Average Assets 0.71% 0.72% Return on Average Equity 11.90% 12.41% Earnings per Share - cents 26.9 30.5 Di
Slide 4: Specific items
Specific items A$ Millions Sale of IOOF Holdings Ltd shares 5.0 Sale of Cashcard shares 0.5 Income tax effect (1.6) TOTAL 3.9 4
Slide 5: Operating profit after tax
Growing together Supporting communities, sharing success Operating profit after tax A$ Millions 50 45 40 35 30 Jun 2002 Dec 2002 Jun 2003 Dec 2003 Jun 2004 Dec 2004 Net of specific items 5 © Bendigo Bank
Slide 6: Profit performance
Growing together Supporting communities, sharing success Profit performance A$ Millions Specific items Expenses 70 Non-interest 3.6 (17.2) income 10.4 NNN 60 . Net interest 7 Bad debts 50 income 14.9 (2.1) — — Dec 2003 | Dec 2004 6 © Bendigo Bank
Slide 7: Interest margin
Growing together Supporting communi ities, sharin ig success Interest margin % 25 3.0 2.5 2.0 1.5 1.0 0.5 0.0 8.02 2:99 2.91 2.81 Jun 2003 Dec 2003 Jun 2004 Dec 2004 Community Bank & Alliances 7 © Bendigo Bank
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
Growing together Supporting communities, sharing success Profit contributions A$ Millions Retail Bank Elders Rural Wealth Community Bank Solutions Bank Dec 2004 10 © Bendigo Bank
Slide 11: Efficiency ratio: Operating expenses/income
Efficiency ratio: Operating expenses/income 11
Slide 12: Total assets
Growing together Supporting communi ities, sharin ig success otal assets A$ Millions 14,000 12,000 10,000 8,000 6,000 4,000 2,000 e) 12 © Bendigo Bank
Slide 13: Funds under management
Growing together Supporting communi ities, sharin ig success Funds under management A$ Millions 3,000 2,500 2,000 1,500 1,000 500 O Dec 2002 Dec 2003 Dec 2004 Sandhurst Industrial Share Fund 13 © Bendigo Bank
Slide 14: Asset quality: Impaired loans / total assets
Asset quality: Impaired loans / total assets 14
Slide 15: Shareholder returns
Growing together Supporting communi ities, sharin ig success Shareholder returns Cents 40 35 30 25 20 15 10 9 20.3 22.0 26.9 27.4 30.5 29.3 Dec 2002 Dec 2003 Dec 2004 Cash basis Earnings per share earnings per share 15 © Bendigo Bank
Slide 16: Capital adequacy
Growing together Supporting communi ities, sharin ig success Capital adequacy % 12 10 10.65 10.26 10.48 ON FD WO Dec 2002 Dec 2003 Dec 2004 16 © Bendigo Bank
Slide 17: Capital structure
Capital structure • Reviewed current structure in light of current market conditions • New target capital mix- tier one 7.50% tier two 2.75% • Issue of Perpetual Step-up preference shares • On market share buy back More efficient capital structure 17
Slide 18: Strategy & outlook
Strategy & outlook Rob Hunt Managing Director 18
Slide 19: A unique and consistent strategy
A unique and consistent strategy Cultivate strong retail connection through: - Creating a distinctive brand - Expanding distribution network (proprietary, Community Bank, alliances) - Broadening product range - Increasing our relevance A strategy aligned to our historic strengths 19 and our capacity
Slide 20: Strategic progress
Strategic progress Brand welcomed Australia-wide Branch network tripled in five years Alliances – ERB, TBS, CSB Broad product range includes e-bank, Wealth Solutions, business, farm, sector-specific Customer numbers doubled in four years Our community engagement activities are building relevance 20
Slide 21: Business progress
Business progress Business now widely diversified -Retail bank, Community Bank, Wealth Solutions, JV’s & alliances All growing strongly with rising earnings Strategic investments play a key role in our strategy Diversity of revenue is a key emerging 21 strength
Slide 22: Performance progress
Performance progress 2000 2004 After-tax profit $21m $80m ROE 7.75% 12.99% EPS 27.5c 60.2c Dividends 24.0c 40.0c* * 2005 interim dividend up by 2 cents Growth is consistently strong despite a 22 heavy investment program
Slide 23: The interim result
The interim result Solid progress in line with forecast Strong growth in revenues across business Growth is enabling further investment in capacity and improving prospects But … some short-term issues relating to revenue and EPS outcomes Interim result continues our steady progress 23
Slide 24: Retail banking margins
Retail banking margins High retail funding proportion (90%) at start of period Increased price competition for deposits Margin pressure caused by changes in retail/wholesale mix Customer margins relatively stable Bendigo grew retail base by 15% in the calendar year (assets by 21%) 24 Bendigo remains
Slide 25: Margin remains healthy
Margin remains healthy Gross margin is strong (2.81%) Happy to share margin with Community Bank and other distribution partners Continue to build strong relationships - Customers - Communities - Alliance partners Not chasing growth based on price Our retail banking strategy has been 25 consistent fo
Slide 26: Capital fine-tuning
Capital fine-tuning Simple capital structure has served us well More efficient structure will improve shareholder returns Providing shareholders with investment choice Improving EPS is a focus Improved alignment between bottom line performance and shareholder returns Bendigo’s retail shareholder bas
Slide 27: Looking ahead
Looking ahead Strategy remains consistent - building community engagement capacity Strong demand for brand, so … We will continue to invest in capacity Growth will continue as businesses mature and expansion continues Excellent prospects for ERB and alliances Bendigo Bank’s performance improvement 2
Slide 28: Additional Information
Growing together Supporting communities, sharing success Additional Information 28 © Bendigo Bank
Slide 29: Non-interest income
Non-interest income $73.4m MM 34% Ma 17% MM 16% Me 11% me 7% MM 6% i 4% Ml 3% Ma 2% Dec 2003 Deposit A/C & transaction fees Loan fees Commissions (primarily Wealth Man.) JV contributions Securitisation Trustee & service fees Specific items Insurance Commissions Other 35% 17% 14% 9% 9% 5% 5% 3% 3% Gr
Slide 30: Operating expenses
Operating expenses $139.0m Dec 2003 MM 49% Staff & related costs MM 22% ME 9% ma 7% > 5% ME 5% Ha 2% ma 1% Administration & other expenses Information technology costs Occupancy costs Property, plant & equipment costs Fees & commissions Amortisation of goodwill Specific items Growing together Suppor
Slide 31: Commercial loans
Commercial loans $1,522m Dec 2003 34% 15% 12% 12% 7% Property & business services Other Retail trade Agriculture, forestry & fishing Construction Accom, cafes & restaurants Manufacturing Health & community service Cultural & recreational services Transport & storage Wholesale trade Growing together
Slide 32: Geographic spread
Growing together Supporting communities, sharing success Geographic spread Loans Deposits Mm 2% TAS Mm 4% Tas 2 Mm 5% wa Mm 5% wa Mm 1% SA Mm 3% SA Mm 14% QLD MMH 15% QLD MM 14% Nsw 6% OS/OTHER MM 59% vic MM 12% NSW MMM 60% VIC Dec 2004 Dec 2004 32 © Bendigo Bank
Slide 33: Loan portfolio
Growing together Supporting communities, sharing success Loan portfolio % By purpose % By security 100 100 80 80 60 60 40 40 20 20 Dec 2003 Dec 2004 9 Dec 2003 Dec 2004 Non-residential Commercial Unsecured 33 © Bendigo Bank
Slide 34: Non-accrual loans
Growing together Supporting communities, sharing success Non-accrual loans A$ Millions 20 18 16 14 12 10 ON FF OD DW Net Non accrual 34 © Bendigo Bank
Slide 35: Provision for doubtful debts
Provision for doubtful debts 35
Slide 36: Return on equity
Supporting communities, sharing Growing together Return on equity % 14 12 10 ON FD OW Dec 2004 36 © Bendigo Bank
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