Transcript Brian Hartzer

Growing our Personal Portfolio
Salomon Smith Barney Conference
Australia and New Zealand Banking Group Limited
19 June 2001
Brian Hartzer
Managing Director - Cards
Building for the future - a distinctive
strategy
Proposition
Strategy
• Entrepreneurial
specialists create
more value (eg
Cards &
Mortgages)
• Reconfigure ANZ as
a portfolio of 16
specialist
businesses
• Specialist
approach to
customer and
product
businesses
e-Transform
• Corporations
must embrace
new technologies
• An e-Bank with a
human face
• Transform the
way we do
business with IP
technology
Perform Grow
& Break out
• Value depends on
performance,
growth and
breaking out
• Drive results,
invest in growth
businesses and
create new
paradigms
• Meet
expectations,
fund growth by
cost reduction,
transform
Specialise
Page 2
Implications
Transforming ANZ through Perform,
Grow and Breakout
Break
out
Grow
Perform
Page 3
• Focus:
long term ‘destiny’
• Benchmark:
global industry/players
• Looking for:
transforming moves
• Horizon:
5-10 years
• Success:
dramatic market cap increase
• Focus:
specialisation and out-growing
the market
• Benchmark:
competitors in each business
• Looking for:
breakout moves in key
businesses (eg QTV, Origin)
• Horizon:
3-4 years
• Success:
4-5 moves taking share and
worth ~AUD1bn+ market cap
each
• Focus:
performance
• Benchmark:
market expectations
• Looking for:
six monthly delivery
• Horizon:
1-2 years
• Success:
meet/exceed expectations
consistently
Shared systems and controls are in
place to protect synergies
Personal Financial Services
Peter Hawkins
Accountabilities
PFS 50%
Group 50%
Priorities
Theme
Metrobanking
Regionalbanking
Drive sales
and efficiency
• Advanced
marketing/
segmentation
Small
Business
Mortgages
Cards
Invest to grow
Aggressively
rebuild
Maintain
profitable
growth
Accelerate
growth
• Expert advice
• Open
architecture
• Straight
through
processing
• “Wrap” facility
• Seamless
access
• Lower cost to
serve
Systems
Wealth
Management
CRM
• Build profitable
market share
• Relationship
based
proposition
• Redesign end to
end process
SSP
• Maintain
distribution
strength
• Straight
through
processing
Brand
Page 4
• “Best of
breed”
delivery
platform
• Data mining
• Exploit growth
opportunities
Risk Management
Our strategy is delivering results...
$m
450
$m
250
Personal Portfolio
Profit Growth
400
420
380
350
322
200
197
191
181
Business Unit
NPAT
333
150
Mar-00
Sep-00
300
Mar-01
112
100
250
200
80
233
CAGR - 34%
58
45 44
50
48
58
45
34
15 14
11
0
150
Mortgages
Cards
Wealth
Management
Page 5
Small Business
General Banking
Mar-99 Sep-99 Mar-00 Sep-00 Mar-01
We are developing a track record of
building growth businesses
%
15
%
30
Mortgage market
share
14
Share of credit
card spend
25
13
12
20
11
10
95
96
97
98
99
00
$m
700
%
16
600
FM inflows
(LHS)
500
400
300
01
(RHS)
m
4.2
96
97
98
99
00
01
Personal customers
- Australia
14
3.8
12
3.6
200
100
10
3.4
Mar-98 Sep-98 Mar-99 Sep-99 Mar-00 Sep-00
0
-100
95
4.0
Deposit
market share
15
Mar-00 Jun-00 Sep-00 Dec-00 Mar-01
8
Page 6
Personal business units will continue
to be key profit drivers
Cards
Revenue Growth 01-03 CAGR
High
GFX
GSF
Wealth
Asia
Asset Fin
Nominal
GDP
Growth
GCM
Small Bus
GTS
ANZ
Investments
Pacific
Inst Bank
Cost to
Income
falling
Metro &
Regional
Mortgages
Corp Bank
Illustrative
Low
Low
Bubble size in
proportion to
2001 NPAT
High
Operating Expense Growth 01-03
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We are developing a strong CRM
capability….
In Place
INFRASTRUCTURE
CAPABILITIES
• Enterprise Customer Data Mart
(ECDM)
• Full account and customer NIACC
• Tran$act database
• Customer scoring and decision
engine
• Behavioural credit scoring
systems
• Segmentation markers and
profiles
• Propensity-to-buy scores
• Application/behavioural scores
• Multiple campaign management
• Campaign Management System
• Front line screen delivery
In Pilot/
Development
• Call centre, ATM, and SSP
integration
• Attrition scores by customer
• ANZ.com integration
• Automated, event-based
campaigns
• Recovery scores
• Multi-product decisioning
• Automated prospect list delivery
(“My Sales”)
• “Optimal” strategy selection by
customer (longer term)
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...which is delivering promising results
%
Event-based Cross-sell
(Recent Case Study)
Proprietary Card Cross-sell
47%
Index
(Recent Case Study)
167
100
16%
5%
Segment A
Deposit
Customers
Segment B
Esanda
Segment C
Mortgages
Control Group
Page 9
Propensity to Buy
Model
Growth opportunities in Personal are
substantial
System Growth
Customer #’s
(m)
Total potential revenue
growth - $1.5b
• Underlying credit growth ~
8-10% pa
Market Share
• Product businesses growing
customer numbers and
market share
Peer Average
10
7.3
Increased
wallet on higher
share $160m
Potential revenue
$650m
Increase Wallet
• Customer businesses
deepening wallet share
5
4
0
• Customer #’s increasing by
1.0m - translates to $650m
in additional revenue pa
Potential
revenue
$650m
Existing revenue
$2.6b
40%
50%*
Share of Customer Wallet
* Average share of wallet for CBA, NAB, SGB, WBC
- source: Roy Morgan Research
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• $650m revenue gain by
matching our peers
– Created customer
businesses
- Sales programs
- CRM
Personal strategy in action: Cards
Specialise
E-Transform
Perform Grow
& Breakout
• Structured as a ‘monoline’ cards business
• Line-of–sight focus on Card Issuing, Merchant Acquiring and
Unsecured Personal Loans
• #1 Visa issuer in Australia, 27% of spend
• Growing share in Merchant acquiring in Australia and New
Zealand
•
•
•
•
•
•
•
•
•
•
Straight-through-processing already delivering benefits
“Platform of the future” initiative underway
On-line experience enhancements currently rolling out
Best-in-class risk management initiative underway
Consistent track record of high profit/EVA growth
Investing in culture and staff recognition
Leveraging CRM capabilities to maximise cross-sell
ENZ acquisition
Asian expansion (e.g. Hong Kong)
E-Card joint venture
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The Cards business is performing
strongly
FINANCIAL
PERFORMANCE
58
45
$NPAT (m)
34
70% annual
growth rate
Mar-00
Sep-00
Mar-01
Change
Total revenue
276
304
335
21%
Cost/Income
Ratio
51%
47%
49%
 2%
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Growing share in all segments of our
Cards business...
Market share (Australia)
Market Share - % of total value
of credit transactions
Cards Issuing Market Share Index
115
115
110
110
105
105
100
100
95
95
90
22.0%
21.4%
21.0%
20.0%
90
Fe b - M a r - A p r - M a y - J u n - J u l -9 9 A u g - Se p 99
99
99
99
99
99
99
Oc t- Nov- De c - J a n99
Issued Accounts
Approved Limits
99
99
00
Fe b - M a r - A p r - M a y - J u n - J u l -0 0 A u g - Se p - O c t - N o v - D e c - J a n - Fe b 00
00
00
00
00
00
00
00
00
00
01
01
Gross Outstandings
Cardholder Spend
Card Issuing Australia
19.0%
Mar-00
Jun-00
Sep-00
Dec-00
Card Acquiring Australia
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Mar-01
...assisted by selective acquisitions
Eftpos NZ Acquisition - 3% + market share
gain in 12 months
18%
16% 15.12%
Market
share of
acquiring
(NZ only)
14%
16.23%
13.5%
14.52%
12%
10%
Apr- May- Jun00
00
00
Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr00
00
00
00
00
00
01
01
01
01
Credit transactions
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…and product innovation which is
recognised internationally
Meet Freddy …
“Best Frequent Traveller Credit or Charge Card (International)”*
First Place:
Qantas Telstra Visa Card (Australia)
Second Place:
Qantas Telstra ANZ Visa Card (NZ)
Third Place:
Amex
* source: InsideFlyer Magazine, 2001
Page 15
Investment in cultural change is
creating a dynamic environment
Cards staff satisfaction levels
80%
Meet Freddy …
75%
75%
70%
67%
65%
60%
59%
55%
50%
45%
40%
1999
Page 16
2000
2001
Leveraging distinctive capabilities
into international markets
• Launch April 2001
• Target: Hong Kong
platinum market
• Niche product with
unique features to
attract profitable
segment
• Proof of concept for
marketing and
operational
capabilities in the
region
Page 17
Summary
• We are performing well
• We have substantial growth
opportunities
• Our new strategy is creating
value and better positioning us
for growth
• We are differentiating
ourselves through our Breakout
program
Page 18
We are
on track
to
continue
growing
strongly
The material in this presentation is general background information about the Bank’s
activities current at the date of the presentation. It is information given in summary
form and does not purport to be complete. It is not intended to be relied upon as
advice to investors or potential investors and does not take into account the
investment objectives, financial situation or needs of any particular investor. These
should be considered, with or without professional advice when deciding if an
investment is appropriate.
For further information visit
www.anz.com
or contact
Philip Gentry
Head of Investor Relations
ph: (613) 9273 4185
fax: (613) 9273 4091
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e-mail: [email protected]
Copy of presentation
available on
www.anz.com
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