Transcript Roger Davis

Growth in our
Corporate Portfolio
Presentation to
UBS Warburg Financial Services Conference
Sydney, 6 June 2001
Roger Davis
Group Managing Director
Australia and New Zealand Banking Group Limited
ANZ is executing a distinctive
strategy
Proposition
Strategy
Specialise
• Entrepreneurial
specialists create
more value
• 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
& Breakout
• 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
Page 2
Implications
ANZ’s Corporate business is
undertaking a similar transformation
Specialise
Reorganised into separate customer and product centric businesses
Created 9 distinctive industry segments in the Institutional sector
Secured a #1 rating for banker quality, creative ideas and knowledge
Maintain top 3 leadership position in FX (#1); Derivatives (#1/#2);
non-vanilla Securitisation (#1); CP (#1); Syndications (#1)
e-Transform
e-Enable commodity functions and processes
Trade - Magellan/Proponix
FX - Atriax; FX On-line
Capital Markets – Aus Markets
Cash – Web-Pay; Identrus; PKI
Procurement – ANZ e-Biz; MRO; Mosaic
Perform Grow
& Breakout
“Customer Obsession” – leverage centricity and market penetration
(#1)
Share of Wallet –v- Share of Market Emphasis
Product driven growth initiatives
Double earnings by 2004
Page 3
Transforming ANZ through Perform,
Grow and Breakout
• Focus:
long term ‘destiny’
• Benchmark: global industry/players
• Looking for: transforming moves
Break
out
• 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)
Grow
• Horizon:
3-4 years
• Success:
4-5 moves taking share and
worth ~A$1b+ market cap
each
• Focus:
performance
• Benchmark: market expectations
Perform
• Looking for: six monthly delivery
Page 4
• Horizon:
1-2 years
• Success:
meet/exceed expectations
consistently
The Corporate portfolio plays a major
role in ANZ’s future
Corporate
Businesses
(by 1H 2001 NPAT)
ANZ Group Segments
(by 1H 2001 NPAT)
Intnl & Subs
15%
Personal
46%
Corporate
39%
Page 5
Global Transaction
Services
$54m
Global Foreign
Exchange
$40m
Global Structured
Finance
$85m
Global Capital
Markets
$24m
Institutional
Banking
$88m
Corporate
Banking
$65m
Our strategy is delivering results...
NPAT Trends
100
89
88
90
85
80
70
$m
60
61 60
65
50
40
67
70
69
Mar-00
Sep-00
Mar-01
54
46
31%
40
7%
32
30
34
40
23%
24
20
16
18
17%
25%
50%
10
0
Corporate
Institutional
Capital
Markets
Page 6
Foreign
Exchange
Structured
Finance
Transaction
Services
...and a low risk profile
Risk actively managed
Corporate risk grade profile
• Quarterly strategy reports prepared
for all high risk accounts
AAA to
BBB+
38.4%
37.9%
38.4%
38.9%
BBB to
BBB-
26.4%
26.7%
26.9%
27.4%
• June to October 2000 - all BB rated
accounts within Corporate reviewed
in expectation of downturn
$m
100
Actual SP v ELP
charge
80
BB + to
BB
18.2%
19.1%
19.4%
60
20.3%
40
BB-
11.7%
12.3%
>B
5.3%
4.0%
Sep-99
Mar-00
11.7%
20
9.3%
3.6%
Sep-00
4.1%
0
-20
Mar-01
>B = B, B-, CCC
& non-accrual
Mar-00
Sep-00
-40
ELP charge
SP charge
Page 7
Mar-01
Credit quality is sound in some of our
larger industry exposures - Australia
Lending Assets (AUDm)
% of Portfolio (RHS scale)
% in CCR 7D-8G (RHS scale)
% in CCR 9-10 (RHS scale)
x
Manufacturing
Real Estate Operators & Dev.
10bn
12.0% 10bn
12.0%
8bn
10.0%
10.0%
8bn
8.0%
6bn
6.0%
4bn
4.0%
2bn
2.0%
0bn
0.0%
Sep-98
8.0%
6bn
6.0%
4bn
4.0%
12.0%
8bn
10.0%
8.0%
6bn
4.0%
4bn
2bn
2.0%
2bn
2.0%
0bn
0.0%
0bn
0.0%
4bn
Sep-98
12.0% 10bn
10.0%
10bn
6.0%
Agriculture
8bn
8.0%
6bn
Mar-01
10bn
Retail Trade
Mar-01
Accomm. Cafes &
Restaurants
8bn
Mar-01
Construction
12.0% 10bn
12.0%
10.0%
10.0%
6.0%
4bn
4.0%
Sep-98
8.0%
6bn
6.0%
4.0%
8bn
8.0%
6bn
6.0%
4bn
4.0%
2bn
2.0%
2bn
2.0%
2bn
2.0%
0bn
0.0%
0bn
0.0%
0bn
0.0%
Sep-98
Mar-01
Sep-98
Mar-01
Page 8
Sep-98
Mar-01
All Corporate units are targeting
revenue growth to exceed cost growth
Cards
Revenue Growth 01-03 CAGR
High
GFX
GSF
Wealth
Asia
GCM
Asset Fin
Nominal
GDP
Growth
GTS
Pacific
Small Bus
Inst Bank
Cost to
Income
falling
ANZ
Investments
Metro &
Regional
Mortgages
Corp Bank
Illustrative
Low
Low
Bubble size in
proportion to
2001 NPAT
High
Operating Expense Growth 01-03
Page 9
We are on track to meet our
commitment to double profit by 2004
Corporate Portfolio NPAT
Double 1999
NPAT - required
CAGR of 15%
$m
1000
Actual NPAT
900
800
700
600
500
400
300
200
100
0
1999
2000
2001*
* Annualised NPAT for 1H 2001
Page 10
2002
2003
2004
Our main focus is on growing total
wallet share
# Customers
Focus on deeper
penetration of existing
CFS customer base
Grow wallet share
• New high value
products
Potential
revenue ~$1.3b
• New delivery
mechanisms
~5,000
Total wallet
of ANZ customer
base ~$8.5b
FY 2000 revenue
$1.7b
• Improved crosssell
• Increased sale of
3rd party products
0
~20%*
~35%
Share of Customer Wallet
* source: internal estimate
Page 11
The elements of our growth
Growth is...
Dynamic
Non-balance sheet,
fee income based
Organisational
implications
• Less capital intensive
Technology Based
Growth opportunities can
also leverage technology:
• Atriax, AusMarkets
• Proponix
• PICI
• e-Payments
• Infrastructure plays
Opportunistic
• New customers
• New products/initiatives
• New geographies
New Product Focussed
•
•
•
•
•
•
Credit derivatives
Infrastructure equity (Morrison)
Private equity
Soft & base metal commodities
Securitisation (new)
Equity derivatives
Challenging
Client Constrained
• Wallet share offers better
growth opportunities
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•
•
•
•
•
•
Competition
Limited geographic footprint
Balance sheet & risk
Time & technology
Regulatory tax accounting
Customer rich franchise
Our customer focus is the critical
foundation…
New technology platforms such as
MARS (Management Analysis
Reporting System) provide critical
support for CRM & CVM activities
Putting our corporate customers first,
is a key retention & service value
strategy for us
Overall Satisfaction with Bank
8.0
7.6
7.4
7.5
7.0
7.6
7.5
7.1
7.0
6.9
6.5
6.4
6.0
1997
ANZ
1998
NAB
1999
CBA
2000
Westpac
Source: Roberts Research, Survey 2000
Page 13
Deepening penetration of our high value,
predominantly fee based products
EQUITY
EQUITY
Structured
Infrastructure
Investment
Structured
Infrastructure
Investment
Pre-Sold
Equity
Underwritings
Pre-Sold
Equity
Underwritings
CREDIT
DERIVATIVES
CREDIT
DERIVATIVES
Counter-Party
Exposure
Management
Counter-Party
Exposure
Management
Private
Equity
Structured
Product
Private
Equity
Structured
Product
FINANCING
FINANCING
Project
Financing
Corporate
Advisory
Project
Financing
Corporate
Advisory
Specified
Financing
Specified
Financing
EQUITY
DERIVATIVES
EQUITY
DERIVATIVES
TRANSACTION
SERVICES
TRANSACTION
SERVICES
Trade
Finance
Processing
Trade
Finance
Processing
Corporate
Internet Cash
Management
Corporate
Internet Cash
Management
Page 14
Structured
Wealth
Products
Structured
Wealth
Products
Portfolio
& Option
Programs
Portfolio
& Option
Programs
COMMODITIES
COMMODITIES
Gold
Softs
Gold
Softs
Base
Metals
Oil
Base
Metals
Oil
Controls are in place to protect
synergies and maximise opportunities
Priorities
Theme
Accountabilities
CFS 50%
Group 50%
Corporate Financial Services
Roger Davis
Corporate
Banking
Institutional
Banking
Transaction
Services
Foreign
Exchange
Capital
Markets
Structured
Finance
Grow EVA
through
efficiency and
penetration
Grow EVA
through
efficiency and
penetration
Invest for
growth in
trade and
transactions
Defend FX
business and
grow
selectively
Maximise
franchise and
grow
selectively
Execute
strategy
selectively
• Middle market
wallet share
• Customer and
product
interface
• Trade finance
system and
benefits
• Customer
management
systems
• Streamlined
organisation
• Back office
technology
and processes
• Staff
recruitment
and training
Systems
• Staff
recruitment
and training
CRM
MARS
• Growth
strategies for
high potential
products
• Revenue
momentum
• eFX-based
initiatives
• Global
commodities
business
B2B eCommerce
Page 15
• High IP
product
growth
• Securitisation
and asset
sales
• Cost reduction
initiatives
• Revenue
growth
initiatives
• Staff
recruitment
and retention
Brand
• Partnerships
and alliances
Risk Management
Summary
• We are performing well
• Our corporate portfolio is lower risk
• We are focussing on non-lending
fee income as we transition from
being a balance sheet based
business to being an intellectual
capital services firm
• Our new strategy is creating value
and better positioning us for growth
• We are differentiating ourselves
through our Breakout program
Page 16
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
Page 17
e-mail: [email protected]
Copy of presentation
available on
www.anz.com
Page 18