Bendigo & Adelaide Bank Ltd. · ASX:BEN
Bendigo & Adelaide Bank — Bendigo Bank — FY2002 Earnings Presentation
45 slides from Bendigo & Adelaide Bank's earnings presentation, August 2002
Slide 1: Bendigo Bank Limited 30 June 2002 Results
BENDIGO BANK LIMITED 30 June 2002 Results
Slide 2: Presenters
Presenters Craig Langford Greg Gillett Rob Hunt
Slide 3: Financial Result
Financial Result Craig Langford Chief Financial Officer
Slide 4: 2002 Moving forward
2002 Moving forward Profit increased by 47% to $48.8 million Earnings per share up by 30% to 41.1 cents Strongly capitalised Continuing business growth Solid asset quality Final dividend up 2.5 cents to 17 cents
Slide 5: Performance summary
Performance summary $Millions Jun-01 Jun-02 Net Profit after Income Tax 33.3 48.8 Return on Average Assets 0.56% 0.65% Return on Average Equity 9.4% 10.6% Earnings per Share - cents 31.5 41.1 Expense to Income Ratio 72.6% 70.5% Year end Assets 6,982 7,968 Year end Capital 423 494 General Provision f
Slide 6: Operating profit - after tax
Operating profit - after tax A$ Millions 60 48.8 47.8 50 40 36.5 Up 30% 33.3 28 Reported 30 21.3 Normalised 20 10 0 2000 2001 2002
Slide 7: Net interest margin
Net interest margin % 3.40 3.30 3.20 Interest Margins were 3.00 2.82 maintained during the 2.74 2.74 2.80 2.66 2.68 year despite yield curve 2.60 pressures. A positive 2.40 yield curve should assist 2.20 margins for fiscal 2003. 2.00 1997 1998 1999 2000 2001 2002
Slide 8: Elders Rural Bank
Elders Rural Bank $ Million 9 • Returned a solid 8 7.9 performance with 7 6 contribution increased by 5 5.1 5 55% to $7.9 million 4 3 • Loans increased 25% to 2 1 $1.2 billion 0 • Solid retail funding base 2000 2001 2002 • Loan quality remains excellent
Slide 9: Community Bank contribution
Community Bank contribution ($ millions) 6.0 5.4 5.0 Community Bank 4.0 contribution more than 3.0 doubled during 2002. 2.0 1.7 Further strong growth 1.0 0.6 from this division is 0.0 anticipated in 2003. Jun-00 Jun-01 Jun-02
Slide 10: Efficiency ratio: Operating expenses / income
Efficiency ratio: Operating expenses / income % 80 79.10 78 76 75.40 FABS Acquisition 74 73.70 72.60 72 70.50 70 68 68.30 66 1997 1998 1999 2000 2001 2002
Slide 11: Total assets
Total assets A$ Millions 10,000 2,400 8,000 1,962 6,000 Managed 1,327 747 On Balance Sheet 4,000 7,968 6,982 4,913 2,000 4,204 0 Jun-99 Jun-00 Jun-01 Jun-02
Slide 12: Lending approvals
Lending approvals ($millions) 4,000 $1,142 million 3,000 2,000 3,637 2,495 1,000 1,854 0 Jun-00 Jun-01 Jun-02
Slide 13: Retail deposits
Retail deposits ($ millions) $ 7,000 $868 million 6,000 5,000 4,000 3,000 6,373 5,504 2,000 3,691 1,000 0 Jun-00 Jun-01 Jun-02
Slide 14: Core retail deposit base: Funding mix
Core retail deposit base: Funding mix % 100 95 9 12 16 90 20 85 80 75 70 91 88 84 65 80 60 55 50 Jun-99 Jun-00 Jun-01 Jun-02 Retail Wholesale
Slide 15: Geographic spread of loans
Geographic spread of loans JUNE 1995 JUNE 2002 12% 4% 3% 3% 3% 14% 3% 97% 61% VIC NSW VIC NSW WA ACT SA QLD TAS
Slide 16: Geographic spread of deposits
Geographic spread of deposits JUNE 1995 JUNE 2002 3% 9% 3% 15% 7% 66% 97% VIC VIC NSW WA NSW QLD OTHER
Slide 17: Asset quality: Impaired loans / total assets
Asset quality Impaired loans / total assets % 0.70 0.62 0.60 Asset quality demonstrated 0.50 0.40 solid improvement 0.40 0.40 particularly in the second half 0.30 0.26 reducing to the lowest level since Bendigo converted to 0.20 Bank status. 0.10 0.00 Jun-99 Jun-00 Jun-01 Jun-02
Slide 18: Asset quality: General provisions / risk weighted assets
Asset quality: General provisions / risk weighted assets 0.90 % 0.80 0.79 Higher general provision 0.70 coverage reflected change in 0.60 accounting policy to “gross of 0.50 0.55 income tax method” in line 0.50 with the majority of 0.40 Australian Banks during 0.30 2003. 0.20 Jun-00 Jun-01 Jun-02
Slide 19: Capital adequacy
Capital adequacy %14 12 10 2.41 Tier one capital grew to a 1.26 2.1 robust 9.28% during the year. 8 This is slightly above the 6 9.28 targeted mix of 8.5% tier one 4 8.77 8.61 and 2.5% tier two 2 0 2000 2001 2002 Tier 1 less deductions Tier 2
Slide 20: Return on equity
Return on equity (Percentage) 12 We delivered on our promise 10 to increase ROE by 1% in 8 2002. 6 9.4 10.6 4 8.0 2 0 Jun-00 Jun-01 Jun-02
Slide 21: Earnings per share
Earnings per share (Cents) 50 40 Earnings per share increased by 30% enabling Directors to 30 increase dividend by three 20 41.1 cents per share to 29 cents. 27.5 31.5 Pay out ratio was just below 10 70% down from 84% 2001. 0 Jun-00 Jun-01 Jun-02
Slide 22: Retail Bank
Retail Bank Greg Gillett General Manager Retail Banking
Slide 23: Priorities for 2002: Increase access
Priorities for 2002: Increase access Achievements Opened 29 Community Banks Opened 5 bank-owned branches Opened 1 private franchise Opened 9 in-store agencies Installed 34 additional ATMs
Slide 24: Priorities for 2002: Growth
Priorities for 2002: Growth Achievements Customers 97,602 Loan balances $1,056 M Retail deposit balances (inc STL) $1,112 M
Slide 25: Priorities for 2002: Improve product range
Priorities for 2002: Improve product range Achievements Launched on-line share trading Launched margin lending Launched on-line merchant service Launched Green Personal Loan
Slide 26: Priorities for 2002: Improve organisational capacity
Priorities for 2002: Improve organisational capacity Achievements Separated accountabilities for Business & Consumer Banking Major fee restructuring to reward relationships and recognise user pay principle. Integrated all card functions and accountabilities into single area.
Slide 27: The nature of customer transactions
The nature of customer transactions 17% completed at branch Number of transactions per account is growing Use of “foreign” ATMs increasing 8% of customers are active users of Internet Internet transactions volume grew by 85% in 2002
Slide 28: Number of customer transactions processed
Number of customer transactions processed Millions 70 64.3 Approx. 40% of this 60 increase attributable to FABS 50 39.1 40 29.5 30 20 10 0 2000 2001 2002
Slide 29: Physical distribution June 2002
Physical distribution June 2002 Vic NSW Qld WA SA TAS ACT NT Totals Branches 72 4 50 1 1 5 1 - 133 Community 39 11 2 18 4 - - - 74 Banks In-store 83 3 19 3 1 1 - - 110 Agencies Totals 194 18 71 22 6 6 1 - 317 Population 4,828,968 6,532,459 3,627,816 1,909,751 1,502,397 470,272 314,171 197,590 19,383
Slide 30: Broad objectives for 2003
Broad objectives for 2003 Increase access Growth Improve product range Improve organisational capacity Provide an exceptional customer experience.
Slide 31: Some key opportunities
Some key opportunities Business banking Queensland New South Wales Elders Rural Bank
Slide 32: Strategy & Direction
Strategy & Direction Rob Hunt Group Managing Director
Slide 33: Successful customers and successful communities
Successful customers and successful communities help create a successful and relevant bank . . . in that order MISSION STATEMENT We focus on building and improving the prospects of our customers, communities and partnerships in order to develop sustainable earnings and growth for the business and th
Slide 34: Bendigo Style of Banking
Bendigo Style of Banking Building capacity to: Differentiate and build strong brand / market position Create strong buying base of customers / communities Blend face-to-face and technology delivery Open up new markets Introduce new products to strengthen relationship offer & value proposition
Slide 35: Key Strategies
Key Strategies Expand distribution capability & coverage Develop a Wealth Management Division Enhance our unique position, brand & point of difference Develop a strong franchise & growth in shareholder value Broaden product & services available Strengthen the capacity of our market of buyers
Slide 36: Successes in 2002
Successes in 2002 Improved profit performance by 47% Increased distribution network and interstate representation Increased EPS & DPS Strong retail deposit growth Strong lending and asset growth Improved contribution from new businesses (C’ty Bank, ERB, Qld) Successfully integrated Queensland networ
Slide 37: Investments in 2002
Investments in 2002 Established Wealth Management Division Continued enhancement of risk management framework Continued to grow our skill base Building community capacity to enhance our market place Launched “Shaping to Grow” project to improve company capacity and efficiencies Enhanced business ban
Slide 38: Wealth Management Division
Wealth Management Division Combined Funds Management Offers of STL Worley Securities Bendigo Investment Services & Bendigo Superannuation (With Alliance Partners - IOOF, Investors Mutual, SMF) Launched Bendigo Managed Funds Expanding Advisory Division across branch network To Date $1b Funds & Assets
Slide 39: The emotional key to our new markets: Positioning
The ‘emotional key’ to our new markets . . . Positioning and perception of brand Bendigo has a unique position / opportunity in the market
Slide 40: Why will people visit you on the Web?
Why will people visit you on the Web? Trust Perceptions / beliefs Loyalty People Products/facilities/price can be replicated All competitors will be convenient Community & customer beliefs . . . will be critical
Slide 41: Why Bendigo's progress will continue
Why Bendigo’s progress will continue Differentiated brand & offer New Businesses increasing contribution - 50% of Bendigo-branded branches under 2 years old ERB, Guild Banking, Tasmanian Banking Services, etc Wealth Management Division revenue contribution Strong community & business demand for Bend
Slide 42: Bendigo's proven ability to ...
Bendigo’s proven ability to . . . Integrate other businesses Form and run alliances and partnerships Grow our base faster than system growth Create innovative solutions Unite, engage, involve communities & discrete customer bases
Slide 43: Future ...
Future . . . Continued growth in distribution network (another 35+ branches) New communities & customer groups (growing national presence) (Sydney, Community Banks, Community Sector Bank, etc) Roll-out of Wealth Management facilities & advice Expanded capability in business banking Strong growth in
Slide 44: Questions
Questions © Bendigo Bank
Slide 45: Bendigo Bank Limited June 2002 Results
BENDIGO BANK LIMITED 30 June 2002 Results