Westpac Banking Corporation · ASX:WBC
Westpac Banking — Non-Deal Roadshow (October 1999)
26 slides from Westpac Banking's roadshow presentation, October 1999
Slide 1: Presentations in Asia & UK, October 1999
.westpac.com.au Group Executive, Australian Banking Group Presentations in Asia & UK October 1999
Slide 2: Agenda
❏ Westpac track record ❏ Australian Business & Consumer Financial Services ❏ Sound foundations - the journey ❏ Rebuilding revenue growth & productivity initiatives ❏ Conclusion 2
Slide 3: Net Profit, Earnings Per Share, Dividends and Share Price
Net Profit After Tax year ended 30 September 1,342 Earnings Per Share 1,291 half year ended 31 March 1,132 EPS before abnormals - YE 30 September 1,015 70 70.1 80HY ended 31 March 53.5 58.9 705 701 60 36 36.3 40 20 0 1994 95 96 97 98 99 1994 95 96 97 98 991H NPAT up from A$705m in 1994 to A$1,342m i
Slide 4: Focus of presentation
Focus of presentation |_| Australian Business & Consumer Financial Services |_| Which includes: — Westpac’s Regional Banks — AGC, and — Westpac Financial Services
Slide 5: Sound foundations: market share and customer satisfaction
Market share Customer satisfaction Staff morale Channel capability Building customer base Product capability Cost Controls 92’ 93’ 94’ 95’ 96’ 97’ 98’ 99’ 5
Slide 6: Opportunity
Market share Opportunity Customer satisfaction Staff morale Channel capability Building customer base Product capability Cost Controls 92’ 93’ 94’ 95’ 96’ 97’ 98’ 99’ 6
Slide 7: Quality Balance Sheet, Bad Debts and Loan Delinquencies
Quality Balance Sheet Bad Debts 30% Customer Risk Exposure Net Bad Debts & Impaired Assets 27% by Category 24% 1.00 21% % 0.50 18% 15% v. 0.00 FY 97 FY 98 1H99 ge e te w al le er A Lo im ib ra ra ev ve lig e in ve od -S eg bo M A M N A h ig ANZ NAB CBA WBC H Net Bad Debt/GrossLoans Impaired Assets/G
Slide 8: Centralised operational sites
❏ Centralised operational sites – Concord NSW ❏ The Mortgage Company – Adelaide SA ❏ Telephone Banking Centre – Launceston Tas 8
Slide 9: Building customer base
Building customer base Challenge Bank, Perth 1995 - 1997
Slide 10: Awards 1999
❏ Personal Investor Bank of Year Awards 1999 – Online Bank of the Year – Savings Bank of the Year – Classic Plus - Best Personal Transaction Account – Global Rewards Westpac VISA Card - Best Credit Card ❏ Australian Financial Review/Telstra - Australian Internet Awards 1999 – Best Corporate Site 10
Slide 11: Online Banking, Telephone Banking and ATMs
Branches Online Banking (000’s) Online Banking Customers Numbers 1800 Branch Numbers 140 1600 120 In Australia 1400 100 SGB CBA WBC 1200 ANZ NAB 80 1000 60 800 600 40 400 20 93 94 95 96 97 98 99 0 96 97 98 99 WBC CBA ANZ NAB SGB 5 6 7 8 -9 -9 -9 -9 n- n- n- n- ec ec ec ec Ju Ju Ju Ju D D D D Telepho
Slide 12: Customer satisfaction ranking
5.9 6.4 6.9 7.4 7.9 8.4 8.9 Se p- 9 O 7 ct -9 No 7 v- 9 ‘97 Ja 7 n- 9 Fe 8 b- 9 M 8 ar -9 Ap 8 r- M 98 ay -9 Ju 8 n- 9 Ju 8 l- Au 98 g- ranking ‘98 Se 98 Source: International Survey Research p- 9 25% quartile O 8 ct -9 No 8 v- 9 De 8 c- 9 Ja 8 n- 9 Fe 9 b- 9 M 9 ar -9 Ap 9 r- M 99 ay ‘99 -9 ranking
Slide 13: Very Satisfied with Main Provider
Very Satisfied with Main Provider 35 NAB WBC 25 CBA ANZ 15 ‘98 12 week moving average ‘99 13 Source: Colmar Brunton Research - MarketMind
Slide 14: Market share: lending, credit cards, funds under management
Total New Lending Owner Occupied Market Share: Credit Cards Housing Total amount Spent 20.00% 30% 18.00% 25% 16.00% 20% 14.00% 15% 12.00% 10% 10.00% Jan-97 Jun-97 Nov-97 Apr-98 Sep-98 Feb-99 Jan-97 Jun-97 Nov-97 Apr-98 Sep-98 Feb-99 Funds Under Management 2,500 Net Funds Inflow (Excluding Cash Manag
Slide 15: Having achieved all this, now what?
Having achieved all this, now what?
Slide 16: Strategic priorities
❏ Drive high single digit revenue growth ❏ Reduce dramatically unit cost to serve ❏ Maintain strong risk profile ❏ Secure Business Banking Franchise ❏ Rebuild Brand health 16
Slide 17: Increase depth of customer relationship through cross-sales
Substantially increase depth of customer relationship through greater product cross-sales - (particularly with Bank of Melbourne customers) Products per Priority Customer Products per Middle Market Business 2.52 Customer 1.96 2.39 1.69 NSW Bank of Melbourne NSW Bank of Melbourne Number of Priority C
Slide 18: Personal lending, funds management, cards and insurance
Personal Lending Financial Advisers Funds Management (Loans) (Advice) (Investments) 550 Total Consumer Lending Funds Under Management $b 500 43 13 42.5 450 12 42 41.5 400 11 41 350 10 $b 40.5 40 9 300 39.5 8 39 250 # 7 38.5 38 200 6 Oct-98 Jan-99 Apr-99 Jul-99 1995 1996 1997 1998 1999 Sep-97 Sep-98
Slide 19: Initiatives: AGC Credit Line, Leveraged Equities, alliances
❏ AGC Credit Line ❏ “Leveraged Equities” ❏ FAI mortgage processing ❏ ERG Smart Card alliance 19
Slide 20: Managing Complaints, Increase Convenience, Customer Satisfaction
Managing Complaints Increase Convenience Highest Number of ATMs Telephone Banking (000s) 800 2000 WBC 600 1500 Average 400 1000 200 500 Lowest 0 0 0 20 40 60 80 100 Oct-94 Oct-96 Oct-98 (%) Response Rated 'More Than Satisfactory' Attitude towards Complaints Telephone Banking Active Subscribers Proce
Slide 21: Online Banking Take-up and Revenue Streams
Online Banking Take-up Product Awards Online Customers • Personal Investor 1999 120 - On-line Bank of the Year 100 80 • Australian Financial Review/ 000s 60 Telstra 1999 Internet Awards 40 20 - Best Corporate Site 0 • KPMG 1999 Internet Services Mar- Jun- Sep- Dec- Mar- Jun- Sep- Survey 98 98 98 98
Slide 22: Online banking next steps
❏ Share trading ❏ Enhanced internet based business online banking ❏ Electronic bill presentment ❏ Extend roll-out of branch internet terminals ❏ Complete “Launchpad” rollout to Westpac Financial Advisers and Planners ❏ Transition from on-line banking to ‘on-line financial services’ 22
Slide 23: Cost initiatives: branch closures and processing productivity
Branch Closures Space Reduction Westpac Branch Numbers Branch Site Coverage Cost Initiatives 1500 400 1300 • Network redesign 350 1100 • Channel optimisation M Sq 300 (000s) 900 • Production 250 700 efficiencies 93 94 95 96 97 98 99 200 • Strategic sourcing 1998 1999 2000 • Credit cycle costs Reduct
Slide 24: Small Business Centres and Mobile Banking Force
Small Business Mobile Banking Force Centres • 1 SBC : ~ 300 customers • 1 BBM : ~ 60 customers • Centralised expertise • Work from home • Centralised processing • Close to customer • Efficient approvals & • Linked by technology time to market • Access to expertise • Strategically located sites Relat
Slide 25: Brand Media Exposure and Community Involvement
Brand Media Exposure Logo Recognition 100% (Dangar Research Group) 80% McDonald's Shell 60% Kellogg's 40% WESTPAC 20% CBA 0% Qantas Nov-98 Jan-99 Mar-99 May-99 Jul-99 Source: Publicity 94 96 98 100 Negative Neutral Positive Ratings % Community Involvement • We’re With You • Olympics • Operation Back
Slide 26: Conclusion
❏ Foundations in place ❏ Satisfied staff and customers ❏ Positive evidence of progress on customer and revenue initiatives ❏ Cost initiatives accelerating and ❏ Group financial performance remains on plan, with positive outlook for next financial year 26