Westpac Banking Corporation · ASX:WBC
Westpac Banking — Non-Deal Roadshow (September 1999)
24 slides from Westpac Banking's roadshow presentation, Sep 24, 1999
Slide 1: Managing Director & CEO, 24 September 1999
Managing Director & CEO 24 September 1999 1
Slide 2: Agenda
❑ Proven track record ❑ Untapped potential ❑ Foundations for solid growth ❑ Clear performance targets ❑ Key strategic priorities ❑ Conclusion 2
Slide 3: Net Profit, EPS, Dividends and Share Price
Net Profit After Tax year ended 30 September 1,291 1,342 Earnings Per Share half year ended 31 March EPS before abnormals 1,132 - YE 30 September 1,015 80 HY ended 31 March 70 70.1 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
Slide 4: Renewed focus on consistent core earnings growth
❑ Renewed focus on delivering consistent core earnings growth ❑ To close efficiency gap to peers ❑ Benefits of full capital restructuring yet to flow 4
Slide 5: Customer acquisition, retention and cross sell
Customer Customer Customer Cost to acquisition X X Serve retention cross sell 5
Slide 6: Quality balance sheet and untapped customer potential
❑ Quality balance sheet ❑ Untapped potential in the customer base ❑ Motivated workforce ❑ Customer satisfaction ❑ Strong sales volumes 6
Slide 7: Customer Risk Exposure by Category
30% Customer Risk exposure by Category 27% 24% 21% 18% Risk Category 15% le al . e w e e Av er g at ib im Lo ra ev lig er ve in e od -S eg M Av o Ab M N h ig H ANZ NAB CBA WBC Source: LM Equities Research- based upon June 1999 Dun & Bradstreet 7 Dynamic Risk Scores
Slide 8: Customer value segments
Less than 8% contribute 75% of total value 16.3% 15.5% 14.7% 12.8% 11.9% 10.9% 6.6% 3.1% 2.8% 2.4% 2.0% 0.9% Low Customer value segment High % Customers Value per customer 8
Slide 9: Main Financial Institution Total Customers
Main Financial Institution Total Customers 2.14 2.01 1.81 1.78 Westpac Aust. Majors + Westpac Aust. Majors + Source: Roy Morgan Survey Jan - Dec 1998. * Includes banking products but excludes insurance and retail investment products. + Average of ANZ, CBA, NAB, SGB 9
Slide 10: Staff Morale Index
5.9 6.4 6.9 7.4 7.9 8.4 8.9 Se p- 9 O 7 ct - Source: N 97 ov -9 ‘97 Ja 7 n- 9 Fe 8 b- 9 M 8 ar -9 Source: International A 8 pr - M 98 ay -9 Ju 8 International Survey n- 9 Ju 8 l-9 A 8 ug -9 ‘98 Se 8 Survey Research Research p- 9 O 8 ct - N 98 ov -9 D 8 Staff Morale Index ec -9 Ja 8 n- 9 Fe 9 b- 9 M
Slide 11: Very Satisfied with Main Provider
Very Satisfied with Main Provider NAB NAB WBC 28 % CBA CBA ANZ ANZ 18 Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- Jul- 98 98 98 98 98 98 99 99 99 99 99 99 99 ‘98 12 week moving average ‘99 11 Source: Colmar Brunton Research - MarketMind
Slide 12: Market share and funds management
Total New Lending Owner Occupied % Market Share: Credit Cards Housing Total amount Spent % 19 29 27 25 23 17 21 19 17 15 15 May-98 Sep-98 Jan-99 May-99 May-98 Sep-98 Jan-99 May-99 Penetration in the Middle Market Funds Under Management Net Funds Inflow (Excluding Cash 27% Management) for Year Ended
Slide 13: Performance targets: returns and EPS growth
❑ Sustained returns on economic capital well in excess of the cost of capital ❑ EPS growth consistently exceeding underlying growth in the economy 13
Slide 14: Cost structure, revenue growth and capital efficiency
❑ Fully competitive cost structure ❑ Initiatives to improve revenue growth ❑ Continuing to improve capital efficiency 14
Slide 15: Cost reduction initiatives
❑ Network development ❑ General & Admin. expense reductions ❑ Credit cycle costs ❑ Technology efficiencies ❑ Strategic sourcing 15
Slide 16: Expense reduction targets
❑ Reductions from initiatives equivalent ultimately to approximately 8% ($300m) of projected FY2001 baseline total expenses ❑ Flat net expense line, at a minimum, with targeted reductions offsetting: – cost of implementing savings initiatives - estimated at $100m – estimated 3% pa. underlying increa
Slide 17: Fully competitive cost structure and revenue growth
❑ Fully competitive cost structure ❑ Initiatives to improve revenue growth ❑ Continuing to improve capital efficiency 17
Slide 18: Initiatives to improve revenue growth
❑ Extending retail funds cross selling success ❑ Growing eBusiness and direct sales ❑ Repricing transaction accounts ❑ Further benefits realised from customer intimacy success in IB ❑ Growth initiatives post NZ & BML mergers 18
Slide 19: Traditional Financial Products
100% 50% 70% 100% Traditional Financial Products Services Market Products Share 20% 19
Slide 20: eBusiness and internet banking platform
❑ Web / browser enabled strategic platform ❑ Integrated into priority customer focus ❑ Lower cost online originations & transactions ❑ Faster growing and largest in internet banking, with over 110,000 customers ❑ Online bank of the year & Top corporate web site ❑ Market leading innovations: eMarket
Slide 21: Online banking to online financial services
❑ Share trading ❑ Enhanced internet based business online banking ❑ Electronic bill presentment ❑ Extend roll-out of branch internet terminals ❑ Complete “Launchpad” rollout to Westpac Finacial Advisers and Planners ❑ On-line banking to on-line financial services 21
Slide 22: Continuing to improve capital efficiency
❑ Fully competitive cost structure ❑ Initiatives to improve revenue growth ❑ Continuing to improve capital efficiency 22
Slide 23: Capital management initiatives
❑ US issue of low cost, tax deductible form of capital (US$322.5m) ❑ Issue of ‘NZ Class’ shares (NZ$800m) ❑ Possible ‘domestic’ tier 1 hybrid ❑ Share buy-backs 23
Slide 24: Westpac - Looking Ahead
❑ Westpac - Looking Ahead – our financial performance remains on plan for the second half, and – positive outlook for meeting financial performance targets next financial year 24