Transcript No Slide Title

Corporate Financial Services
Roger Davis
Group Managing Director
Australia and New Zealand Banking Group Limited
20 July 2001
The Corporate Portfolio – Today’s
Themes
• Portfolio of Specialist Product and Customer
Businesses with largely leading market positions
– Defining our businesses
– Corporate objectives
– Customer centricity
– The leading Corporate Bank
– Financial Performance
• Significant growth opportunities
– Deepening share of wallet
– Cautious approach on risk
– On track to meet our commitment to double earnings by
2004
Page 2
ANZ Corporate is different
• Size: Corporate generates 40% of ANZ’s earnings
• International: Corporate earns 30%+ from outside
Australia
• Growth: On track to double profits 1999 – 2004
• Customers: Rank #1 on most independent measures
• Strategy: Moving focus from balance sheet to value
added services
• Key success factors: Leveraging our intellectual capital
– Mid-market customers – Wall St to Main St
– Institutional customers – increasingly complex product
offering
Page 3
The Corporate Portfolio - distinct
businesses working together
Aggregate and Distribute
Corporate
Banking
Institutional
Banking
• Medium-sized
• Large-sized
business
business
• Portfolio
• Portfolio
responsibilities
responsibilities
Systems
CRM
Culture
Innovate and Manufacture Product
Transaction
Services
• Cash mgmt
• Trade finance
• Security
services
Foreign
Exchange
• FX (incl FX
Online)
• Spot
• Forward
• Derivatives
• Base metals
• Commodities
Technology
Page 4
Capital
Markets
•
•
•
•
•
•
Brand
Origination
Underwriting
Structuring
Risk mgmt
Credit products
Derivatives
Structured
Finance
•
•
•
•
Arranging
Underwriting
Advisory
Structured
debt
• Project finance
Risk Management
Our activities & earnings are generated
from 30 countries
Geographic Diversity
of Earnings
New Zealand
Middle East
Americas
Australia
UK/Europe
Asia/Pacific
Page 5
What we want to achieve: The
Corporate goals
 Increase NPAT by 15%+ CAGR
 Achieve an efficiency ratio comfortably in the 40% range
 Generate Returns on Equity above 20%
 Maintain our #1 position in client satisfaction
 Attain a top 3 market position in each of our core
businesses
 Maintain good governance & high standards in overall
risk management
Page 6
We are transforming the way we
operate
Specialise
 Reorganised into separate customer & product
businesses
 Focus on businesses where we have a competitive
advantage - exit those where we don’t (Futures)
 Industry specialisation
 e-Enable commodity functions and processes
e-Transform
 Trade - Magellan/Proponix
 FX - Atriax; FX On-line
 Capital Markets – Aus Markets
 Cash – Web-Pay, Identrus, PKI
Perform Grow
& Breakout
 ‘Customer Obsession’ – an experience which delights
 Share of Wallet vs Share of Market emphasis
 Product driven growth initiatives
 Culture - The ANZ way
Page 7
Each business enjoys strong positions
in their own segment
#1 Commercial Paper
(Asia Money)
Best FX Bank Australia
(Greenwich)
Global
Capital
Markets
Global
Foreign
Exchange
#1 Project Finance Bank
Asia Pacific
(PFI)
Global
Structured
Finance
Corporate
Portfolio
Institutiona
l
Banking
#1 Overall Satisfaction
(Greenwich)
Global
Transaction
Services
Corporate
Banking
#1 Overall Satisfaction
(Roberts)
Page 8
#1 Overall Satisfaction
International Trade Svcs
Major Aust Banks
(Roberts)
Specialisation is creating improved
financial outcomes...
Up 22%
$54m
Global Transaction Services
$46m
Global Foreign Exchange
$32m
Global Structured Finance
$69m
Global Capital Markets
$16m
Institutional Banking
$67m
Corporate Banking
$61m
1H 2000
NPAT
Page 9
$40m
$85m
$24m
$88m
$65m
1H 2001
NPAT
…allowing us to better address a large
but untapped prize in the corporate
base…
# Customers
Focus on deeper
penetration of existing
CFS customer base
Potential
revenue ~$1.3b
• New high value
products
~5,000
• New delivery
mechanisms
Total wallet of
ANZ customer
base ~$8.5b
FY 2000
Revenue
$1.7b
0
Grow wallet share
• Improved cross-sell
• Increased sale of
3rd party products
~20%*
~35%
Share of Customer Wallet
*Source: Internal estimate
Page 10
…while maintaining a low risk profile
Risk actively managed
Corporate risk grade profile
AAA to
BBB+
BBB to
BBB-
38.4%
26.4%
38.4%
37.9%
26.7%
•
Quarterly strategy reports prepared
for all high risk accounts
•
All BB rated & high risk accounts
reviewed regularly
•
SPs likely to rise towards ELP in line
with current expectations
38.9%
120
26.9%
27.4%
Actual SP v ELP charge
100
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%
3.6%
Sep-00
>B = B, B-, CCC
& non-accrual
20
9.3%
0
4.1%
Mar-01
-20
-40
Page 11
1H 98 2H 98 1H 99 2H 99 1H 00 2H 00 1H 01
ELP charge
SP charge
We are therefore well on track to meet
our promise to double profit by 2004
Corporate Portfolio NPAT
Double 1999
NPAT - required
CAGR of 15%
exceeded by
current
performance to
date
$m
Actual NPAT
1000
900
800
700
Up 18%
Up 25%
600
500
400
300
200
100
0
1999
2000
2001*
* Annualised NPAT for 1H 2001
Page 12
2002
2003
2004
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
Page 13
We are on
track to
double
profit by
2004
Copy of presentation
available on
www.anz.com
Page 14