Transcript No Slide Title

Corporate Financial Services
- Leveraging our leadership position
for specialisation and growth
Roger Davis
Head of Corporate Financial Services
18 July 2000
ANZ Corporate: leveraging our
leadership position
• Portfolio of Specialist Product and Customer
Businesses with strong to dominant market positions
– Strong performance
– Customer centricity
– Product excellence
• Significant Growth Opportunities:
– Capital markets
– Business eCommerce
– Leveraging the middle-market franchise
CFS: a major contributor to the bank’s
earnings
$311m
$738m
100 %
Institutional
Corporate
Corporate
Transaction Services
Asset Finance
Capital Markets
Financial Markets
Structured Finance
0
Corporate
Customer
Businesses
CFS: financial performance
400
2.00
1.80
1.60
1.40
1.20
1.00
300
200
100
0
Mar-99
Sep-99
%
55
50
2.0
1.5
45
Cost to Assets (RHS)
Mar-99
Sep-99
Net Interest Margin (LHS)
150
50
Non Interest Income (RHS)
45
Sep-99
Mar-00
Provisioning
100
Cost to Income (LHS)
40
$m
%
55
Mar-99
Mar-00
Costs
%
Income
%
Profit
$m
Mar-00
1.0
50
0
Mar-99
Sep-99
Actual Credit Costs
Mar-00
Economic Credit Costs
CFS: a leader in Corporate Banking
%
#1 Best Bank in Australia
US Global Finance Magazine 1999
#1 Arranger - Asia Pacific
Project Finance International 1999
#1 Domestic Commercial Paper
Asia Money 1999
50
Share of Significant Relationships
with Large Corporates
40
30
20
10
0
#1 Arranger/Co-Arranger - Greater Asia
Capital Data Loan 1999
#1 Interest Risk Management
BRW/KPMG Poll 1998
#1 FX House All Round Excellence
Asia Money 1999
#1 AUD/USD Currency Options Bank
Risk Magazine 1999
30%
ANZ
WBC
NAB
CBA
Source: 1999 Greenwich Associates
Share of Primary Relationships
with Middle-Market Companies
20%
10%
0%
ANZ
NAB
WBC
Source: 1999 Roberts Research
CBA
CFS: a balanced portfolio of service and
asset businesses
RAROC
Higher
Global
FX
Global
Trans
GCM
Fin.
Products
Corporate
GSF
Asset
Finance
Institutional
Lower
Economic Capital
A customer focus and product centric business
6 Product Businesses
3 Customer Segments
Financial
Markets
Institutional
Capital
Markets
8.5
Structured
Finance
7.5
Global
Transaction
Services
Corporate
Esanda*
Overall Satisfaction
with Bank
8
ANZ
NAB
CBA
WBC
7
6.5
6
Business
eCommerce
Asset
Finance
1995
1996
1997
1998
1999
Source: Corporate Banking Roberts Research Group
Customer centricity: Institutional Banking
Share of Corporate Profit
Customer EVA Deciles
Mar-00
21%
-60
Market Penetration - Large Corporates
%
50
40
30
20
10
0
-10
40
90
140
Strategies
• Leverage industry specialisation
• Leverage strong market position to become
an adviser
• Maintain focus on customer profitability and
effective use of balance sheet
ANZ
NAB
Source: Greenwich Associates
CBA
WBC
• Build e-Commerce capability
Customer centricity: Corporate Banking
Customer EVA Deciles*
Share of Corporate Profit
18%
-60
Market Penetration - Middle Market
-10
40
90
140
190
Strategies
• Deepen share of wallet
30%
• Build broader fee-based business - ie
“Wall Street to Main Street” selling
20%
10%
• Build e-Commerce solutions
0%
ANZ
NAB
CBA
WBC
• Cross sell retail products
2
Customer centricity: Asset Finance
Motor Vehicle Deal Volumes
Australia
Share of Corporate Profit
14%
St George
GMAC
CBFC
Ford Credit
Esanda
Source: KPMG, Financial Reports, Roy Morgan, Esanda
50%
40%
30%
% share (est.)
$b (est.)
40
Strategy
market share
writings
• Improve sustainability of core franchise
20
20%
• Accelerate growth program
10%
0%
• Radically transform the business
0
Motor Comm
Total Other Total
Cars Vehicles Motor
Market
Vehicles
Source: ABS, AFJ, Esanda
CFS: market leader in customer satisfaction
Tailoring solutions to our clients'
business needs
Satisfaction with Relationship Manager
8.5
ANZ
8
NAB
CBA
WBC
7.5
7
ANZ
CBA
NAB
6.5
WBC
6
1995
1996
1997
1998
6
1999
Coordinating specialist resources to
service our clients’ business
ANZ
CBA
NAB
NAB
WBC
WBC
6.5
7
7.5
8
7
7.5
8
8.5
Satisfying our international trade
specialist clients
ANZ
CBA
6
6.5
8.5
Source: Roberts Research Group - 1999 Customer Satisfaction Research
6
6.5
7
7.5
8
8.5
A focused customer and product centric business
6 Product Businesses
3 Customer Segments
Financial
Markets
Institutional
Capital
Markets
8.5
Structured
Finance
7.5
Global
Transaction
Services
Corporate
Esanda*
Overall Satisfaction
with Bank
8
ANZ
NAB
CBA
WBC
7
6.5
6
Business
eCommerce
Asset
Finance
1995
1996
1997
1998
1999
Source: Corporate Banking Roberts Research Group
Product centricity: Global Transaction Services
Share of Corporate Profit
Customer Perception - Global Trade Services
Australasia Region, January 2000
10%
%
70
60
50
40
30
20
10
0
ANZ
NAB
WBC
CBA
Citibank
HSBC
Source : Brendan Wood International
League Tables
No. 1 Trade Services provider in Australasia
2000 (BWI)
No. 1 in sub-Custody in Australasia 2000 (GI)
Leader in major transaction banking services
Leader in AUD/NZD Correspondent Banking
Strategy
•
•
•
•
Continue to re-engineer the cost base
Increase % of STP
Replace inefficient processing systems
Insource where we have scale and
sustainable competitive advantages
• Build value added solutions
& products
• Embrace e-Commerce in payments
Product centricity: Asset Finance
Motor Vehicle Deal Volumes
Australia
Share of Corporate Profit
14%
St George
GMAC
CBFC
Ford Credit
Esanda
Source: KPMG, Financial Reports, Roy Morgan, Esanda
50%
40%
30%
% share (est.)
$b (est.)
40
Strategy
market share
writings
• Improve sustainability of core franchise
20
20%
• Accelerate growth program
10%
0%
• Radically transform the business
0
Motor Comm
Total Other Total
Cars Vehicles Motor
Market
Vehicles
Source: ABS, AFJ, Esanda
Product centricity: Global Structured Finance
Share of Corporate Profit
16%
Key Activities
•
•
•
•
•
Industrial Transportation
Project Finance
Corporate Finance
Export Credit
Leasing and Tax
Initiatives
League Tables
No 1 Arranger 1999, Asia Pacific
No 1 Arranger 1999, Asia and Australia
No 1 Arranger, South Asia 1997 to Date
Indian Loan House of the year, 1999
No 1 Arranger, Export Credit Business,
Australia, 1999 (EFIC)
No 1 Advisor Petrochemicals (PFBL 1999)
No 1 Advisor Leisure (PFBL 1999)
• Further strengthen client relationships
• Continue to maintain a diversified portfolio
across sectors and geography with strong
ECA support
• Increase focus on structured, high margin
solutions
• Expand corporate finance and ECA activity
in Asia
• Exploit the cooperative agreement with
SCB in MESA
Source: Project Finance Intl, Global Finance, Capital Data Loanware, IFR Asia, EFIC
Product centricity: Financial Markets
Share of Corporate Profit
$m
14%
FX Cumulative Trading Revenues
250
200
150
100
50
0
Oct-98
Oct-99
Apr-00
Initiatives
League Tables
Best FX Bank, Australia 1999
Top 10 World FX Bank 1999
Best FX Bank of the Year
World No 1 FX Options AUD, 1999
Best of Breed Treasury Banker
Swaps and Options (Asiamoney 2000)
Apr-99
•
•
Continue to focus on sales
Continued expansion of product range
•
•
•
Continue to develop Global capability
Centralisation of global infrastructure
Increased penetration of FX Online in Australia
and overseas
Product centricity: Capital Markets
Share of Corporate Profit
5%
IR Derivative Cumulative Trading Revenues
120
100
80
60
40
20
0
Cumulative Daily
Revenue $m
Oct-98
League Tables
No 1 Domestic Commercial Paper
Derivatives/Risk Management House of
the Year
No 2 Lead Manager, Corporate Bonds
No 3 Best Lead Manager, Securitisation,
No 3 Australia/New Zealand MTNS
Apr-99
Oct-99
Apr-00
Initiatives
• Credit Derivatives and Equity Derivatives
• Securitisation
• Development of new channels into Middle
Market and Retail
• Secondary market offshore
• Partnership with Lehman Brothers
• ANZ bonds issue web site
ANZ Corporate: leveraging our
leadership position
•
•
Portfolio of strong Product and Customer Businesses with strong
to dominant market positions
–
Strong performance
–
Customer centricity
–
Product excellence
Growth Opportunities:
–
Capital markets
–
Business e-Commerce
–
Leveraging the middle-market franchise
Growth initiatives
Goal: to double profit from 1999 to 2004
•
On track after 12 months
•
No silver bullets but rather a continued reliance on consistent doubledigit growth initiatives across CFS
•
Three key areas of activity are worth highlighting:
–
–
–
Capital markets
B2B
Middle market:
Growth: credit derivatives
Key Points
•
The Securities Trading Business will
use credit derivatives to achieve the
following CFS objectives:
– to enhance diversification of
credit portfolios
– to trade forward expectations or
inconsistencies of credit-risk
pricing, and
– to allow new sources of
investment capital to be
committed to credit risk
Australian Credit
Derivatives Market
$b
15
10
5
0
1999
2000
2001
2002
Growth: equity derivatives
$b
Australian Exchange
Traded Options Market
8
6
Key Points
4
• Increasing penetration
• Growth is expected in innovative equity
product
• ANZ Capital Markets has a strong and
highly profitable track record
• ANZ captured 6% market share with its
first series of issues
2
0
1995
$b
1996
1997
1998
1999
Australian Warrant Market
8
6
4
2
0
1995
1996
1997
1998
1999
Growth: private equity funding
Australian Private Equity
Funds Under Management
Key points
•
•
•
•
•
Equity investment capability of A$75m.
Strict investment criteria
Not well serviced by existing players
Leverage ANZ market position
Potential revenue of around $25-30m
over 3 years
$m
2500
2000
1500
1000
500
0
1995 1996 1997 1998 1999 2000
Growth: increase product penetration
in middle-market
Estimated $80+ million revenue target over three years
Initiative
Average Customer
& Associated
Wallet ($k Revenue)
Current
Capture
(%)
Targeted
Capture
(%)
Lending
$81
80
81
Traditional Corp
Banking
$61
56
70
Investment
Banking/Corp Fin
$15
21
60
FM/Personal
$19
20
60
Total
$176
60
72
Total Avail Wallet
$990mm
49
60
Mid Market Wallet
$2.25bn
22
26
Source: FPRG, CPA, Roberts Research
Capital Markets deals for the middlemarket
Middle market product penetration
Status
• Steady increase in revenues from
selling FX products and Capital
Markets products to middle-market
customers:
– Revenue from Capital Markets
products in 1H00 grew 14.5%
versus 1H99
– Revenue from FX products in 1H00
grew 28.6% versus 1H99
Product Penetration
in Middle Market
$m
25
20
15
10
5
0
7.9
6.9
7.7
10.5
11.4
13.5
1H99
2H99
1H00
FX Products
Cap Mkts Products
e-Commerce momentum
B2B
Growth: business e-Commerce
300
250
200
Australian Online
Total Revenue Estimates (A$b)
Total
Online
Revenues
(A$b)
150
Business-tobusiness
(B2B)
100
Business-toconsumer
(B2C)
50
0
98 99 00 01 02 03 04 05 06 07 08 09 10
B2B Portal
(eProcurement)
eProducts
(eGate, Identrus)
Corporate Banking
Portal
(FXOnline)
Growth: FX online
Registered Users
5000
Key Points
• Automated real time dealing
• JV with Reuters
• Leverage ANZ dominant FX position
• First mover advantage
• 35% share of the FX online market
2500
440
Jun-00
750
Sep 00
(Proj)
Sep 01
(Proj)
Transaction Volume
Sep 02
(Proj)
140000
70000
29000
Jun-00
35000
Sep 00
(Proj)
Sep 01
(Proj)
Sep 02
(Proj)
Growth: eGate
Key Points
• ANZ eGate is a secure internet
payment gateway
• $500m market opportunity.
• Operational March 2000
• eGate Version 2 soft release
September 2000 (multi currency)
• Future versions will include escrow
and eCheques
• Major customers wins
eGate Customers
Actual
30
25
20
15
10
5
0
Feb-00
Target
Apr-00
Jun-00
Growth: eProcurement
Key Points
• Internet marketplace
• Added value through integration of
financial services
• Leveraging corProcure initiative
• Currently in beta test with 10-20
clients
• JV with MR & O
• Leverage customer base
• Collaborative approach
Supplier Marketplace
Business System Integration
• Inventory
• Purchasing
• Accounting
•
Human Resources
Desktop Requisition
Workflow
Approval Routing
Maintenance, Repair,
and Operating
Supplies and Services
Browse Suppliers’
catalogues and perform
transactions in real time
Distributed Buyers
Growth: eauto.com.au
Summary: leveraging our corporate
leadership position
CFS - A Growth Business
•
Goal: To double Corporate Financial
Services’ profit by 2004
•
Our growth plans will be predicated on a
range of key initiatives from across the
business
•
Crucial to these efforts will be our
success in
•
–
building share in the Middle Market
–
expanding our Capital Markets initiatives
–
building a B2B platform
These initiatives are expected to generate
$300m in revenue over the next 3 years
Leverage our strong market position
•
We have strong to leadership positions in:
–
–
–
–
–
–
–
Middle-market
Large corporates
Financial markets
Capital markets
Structured finance
Trade banking
Asset financing
Nurture e-commerce franchise
•
Fully exploit:
–
–
•
Powerful ANZ brand integrity
Large and attractive customer base
Transition e-commerce initiatives into vibrant and
viable businesses:
–
–
–
ANZ eGate
ANZ eProcurement (eg MRO.com, corProcure)
ANZ B2B Portal