National Australia Bank Limited · ASX:NAB
National Australia Bank — UBS Conference 2012
24 slides from National Australia Bank's conference presentation, Jun 20, 2012
Slide 1: The Top Line Challenge – How to Grow Revenue from Here
For personal use only The Top Line Challenge – How to Grow Revenue from Here 20 June 2012 Lisa Gray, Group Executive Personal Banking National Australia Bank Limited ABN 12 004 044 937
Slide 2: Note and Disclaimer
Note: Information in this document is presented on a cash earnings basis, unless otherwise stated. Cash earnings is a key financial performance measure used by NAB, the investment community and NAB’s Australian peers with a similar business portfolio. NAB also uses cash earnings for its internal man
Slide 3: Personal Banking at a glance 2008/2009
Personal Banking at a glance 2008/2009 Australian housing lending and household deposit market share1 For personal use only Challenging economic environment 13 .8 % 13 .4 % Mortgage growth half system – 13 .1% constraining growth in Business 12 .8 % Banking Deposit market share falling Sep Sep Sep S
Slide 4: Personal Banking - a key part of Group strategic agenda
Personal Banking - a key part of Group strategic agenda To deliver sustainable, satisfactory returns to shareholders For personal use only Balance sheet Efficiency, People, culture Portfolio strength quality & service & reputation Keep the bank safe Transform the Differentiate for Focus in Australia
Slide 5: Personal Banking strategy
Personal Banking strategy Our Fair exchange of value For personal use only belief Our Restore the Invest in gaps Longer term priorities core business growth New customer People capability Broker channel driven models Customer experience Credit cards Leverage wealth & business Sales strength Small bu
Slide 6: Progress since 2009 – back on track in mortgages & deposits
Progress since 2009 – back on track in mortgages & deposits Australian housing lending and household Third party originated mortgage flows2 deposit market share1 For personal use only 60% 14.7% 14.5% 50% Peer Range 13.1% 40% 12.8% 30% 20% Sep M ar Sep M ar Sep M ar Sep M ar Sep M ar Sep M ar 10% 09
Slide 7: Progress since 2009 – improved customer & people metrics
Progress since 2009 – improved customer & people metrics MFI customer satisfaction1 Total customer complaints2 For personal use only (%) 79.8 1.6% 74.1 78.2 -5.1% 69.0 Mar 09 Sep 09 Mar 10 Sep 10 Mar 11 Sep 11 Mar 12 Apr 12 Jan 09 Jul 09 Jan 10 Jul 10 Jan 11 Jul 11 Jan 12 Weighted average of three m
Slide 8: Shareholder returns reflect business repositioning
Shareholder returns reflect business repositioning Personal Banking key shareholder metrics1 Earnings growth since 1H09 impacted by fee For personal use only reductions Δ 1H09 Δ1H10 1H09 1H10 1H12 Key driver of NIM has been mix change (mortgages vs -1H12 -1H12 Cash earnings unsecured) 408 317 464 4%
Slide 9: Personal Banking – building on strong foundations
Personal Banking – building on strong foundations Our belief Fair exchange of value For personal use only Our Realise value Be different Build for the future priorities …from investments made … by focusing on high … building comparative in restoring the core and value segments, clear advantage throu
Slide 10: Personal Banking – building on strong foundations
Personal Banking – building on strong foundations New to bank cross-sell MFI customer socio economic distribution1 For personal use only 1.8 20% Higher Average products held 25% 46% 40% 41% 1.7 20% 21% 1.6 20% Customer 20% 24% “Value” 20% 17% 1.5 18% 11% 17% 19% 8% 1.4 Lower NAB Avg 3 majors (ex % o
Slide 11: Summary
Summary Personal Banking back in the game For personal use only Peer-leading customer and people metrics Earnings rebased in 1H10 Upside from improved mortgage conversion ratios, cross-sell and efficiency Continue to provide a fair exchange of value for all stakeholders Positioned to meet ‘top line
Slide 12: Questions
For personal use only Questions
Slide 13: Appendix
For personal use only Appendix
Slide 14: Personal Banking snapshot March 2012
Personal Banking snapshot 31 March 2012 1H12 cash earnings $464m, 16% of group earnings For personal use only 19% of group assets and 12% of group RWA Total lending $145bn, 94% is mortgages Retail deposits $81bn 8,493 FTEs, 785 retail outlets 4.9m individual and small business customers Distribution
Slide 15: Experienced leadership team
Experienced leadership team Group Executive, For personal use only Personal Banking Lisa Gray EGM, NabRetail EGM, Small EGM, Growth EGM, Direct EGM, Consumer EGM, Business Chief Financial Chief Risk Vicki Carter Business Partnerships Banking Product Operations Officer Officer Cindy Batchelor Antony
Slide 16: Personal Banking
Personal Banking Cash earnings Revenue For personal use only ($m) 15.7% ($m) 4.7% (0.9%) (7.2%) 1.4% 5.0% 500 464 1,747 1,731 426 432 1,589 1,669 Sep 10 Mar 11 Sep 11 Mar 12 Sep 10 Mar 11 Sep 11 Mar 12 Costs Net interest margin ($m) (%) 891 900 902 866 2.28 2.22 2.17 54.5% 53.4% 51.5% 52.1% 2.02 Sep
Slide 17: Personal Banking
Personal Banking Housing loans Customer deposits For personal use only ($bn) 6.4% ($bn) 8.3% 10.5% 8.7% 5.9% 11.5% 125 133 115 72 78 104 61 68 Sep 10 Mar 11 Sep 11 Mar 12 Sep 10 Mar 11 Sep 11 Mar 12 Increased cost of funding an Australian Australian credit growth % change year-on- variable rate mort
Slide 18: Personal Banking: Asset quality
Personal Banking: Asset quality B&DD charge Cards & personal loans 90+ DPD For personal use only ($m) 15.3% (22.5%) 1.16% 1.15% (40.5%) 1.09% 0.98% 163 138 169 116 S e p 10 M a r 11 S e p 11 M a r 12 Sep 10 Mar 11 Sep 11 Mar 12 Mortgage 90+ DPD and impaired Total 90+ DPD and impaired ($m) 0.67% 0.61
Slide 19: Personal Banking: Net interest margin
Personal Banking: Net interest margin March 12 v September 11 For personal use only 0.07% (0.06%) (0.11%) (0.02%) (0.04%) 0.01% 2.17% Customer margin down 12bps 2.02% Sep 11 Lending Margin Deposits Funding & Liability Mix Lending Mix Other Mar 12 Liquidity Costs March 12 v March 11 0.08% (0.08% ) (0
Slide 20: Change in profile of mortgage approvals
Change in profile of mortgage approvals LVR breakdown of final approvals Risk grade distribution of 90%+ LVR (Australian Region) For personal use only 100% 100% 90% 80% 80% 70% 60% 60% 50% 40% 40% 30% 20% 20% 10% 0% 0% Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Dec Mar Jun Sep Dec Mar J
Slide 21: Business Banking, Personal Banking and NAB Wealth
Business Banking, Personal Banking and NAB Wealth Portfolio breakdown – total $362.8bn as at March 2012 For personal use only Australian Mortgages Mar 12 Sep 11 Mar 11 Owner Occupied 70.8% 70.2% 68.6% Investment 29.2% 29.8% 31.4% Overdraft 2% Other 1% Low Document 2.4% 2.4% 2.0% Credit Cards 2% Prop
Slide 22: Australian Mortgages – $213bn as at March 2012
Australian Mortgages1 – $213bn as at March 2012 Geography For personal use only Low doc loans Vic 30% $5.1bn outstanding (2.4% of housing book) Qld 20% LVR capped at 60% (without LMI) SA 5% NSW 34% WA 11% Customer segment Origination source Mar 12 Sep 11 Mar 11 Sep 10 – flows (Australia) Investor 29
Slide 23: Australian housing prices and debt
Australian housing prices and debt Real dwelling prices 1993 = 100 Housing affordability For personal use only Index Index Index Index 50 50 200 200 40 40 Capital cities 150 150 30 30 Australia 20 20 100 100 10 10 50 50 0 0 1986 1990 1994 1998 2002 2006 2010 1986 1990 1994 1998 2002 2006 2010 Source
Slide 24: Characteristics of the Australian Mortgage Market
Characteristics of the Australian Mortgage Market Ratio of Dwellings to Resident Population Solid population growth combined with an State average = 100 insufficient expansion in Australia’s dwelling For personal use only Index Index stock has led to a broad-based undersupply Queensland New South Wa