Transcript No Slide Title

Meeting the New Economy Head on
Elmer Funke Kupper
Australia and New Zealand Banking Group Ltd
Wednesday, 30 August 2000
ANZ
One of the ‘Big Four’ Australian banks:
• Provider of full range of financial services
• Leadership in Corporate Banking, Credit Cards and Trade
Finance
• Emerging strong eCommerce position
• Offshore network in Asia and Pacific (following sale of ANZ
Grindlays to Standard Chartered)
•
Assets
A$167b
•
Market Cap
A$20b
•
Credit Rating
AA-/Aa3
•
Profit (first half 00)
A$817m
ANZ Headquarters
100 Queen Street, Melbourne
Significant momentum in financial performance
EPS
¢
%
120
20
100
15
80
10
60
5
1997
40
1998
1999
1997
Mar-00
Lending Mix
%
ROE
%
Mortgages
30
1999
Mar-00
Cost Income Ratio
70
35
1998
65
25
60
20
15
Emerging Markets
10
55
NAB
5
50
0
1998
1999
Mar-00
ProForma
1997
1998
1999
WBC
CBA
ANZ
Mar-00
Group strategic direction built on specialisation,
eTransformation and growth
Proposition
Strategy
1
Integrated financial services firms
will lose to specialists over time
1
Reconceive and develop ANZ as a
portfolio of specialist businesses
2
The rise of specialists and new
technologies will deliver superior
customer value and erode margins
2
Become an “eBank with a human
face”
3
For ANZ more value will be created
through focus and leverage of
intangible assets than traditional
concentration plays
3
Create a portfolio of high growth
businesses which leverage
capabilities and brands
Technology transforms what customers
expect
Time required to find a high
rate certificate of deposit
Cost of a 3-minute telephone call from
New York to London
1996, $
Telephone
25 min
300
250
www
www with
agent
10 min
1 min
200
150
100
50
0
1930
1940
1950
1960
1970
1980
1990
2000
A disaggregated approach is required
EDS
IBM
Product
Manufacturing
Yodlee
Quicken
Distribution Channels Sales &
& Processing
Marketing
Customer
Need
Countrywide
AHL
House
Purchase
MBNA
NextCard
Credit
Card
Egg
ING
Cash
Deposit
Fidelity
Schwab
Wealth
Mgmt
Increase focus on specialist positions
Leader (#1)
Competitive
Weaker
Personal
Cards
B2C eCommerce
Wealth Management
Mortgages
General Banking
Small Business
Funds Management
Corporate
Corporate
Structured Finance
Foreign Exchange
Asset Finance
B2B eCommerce
Capital Markets
Institutional
Transaction Services
International/
eCommerce
Pacific
Asia
Group strategic direction built on specialisation,
eTransformation and growth
Proposition
Strategy
1
Integrated financial services firms
will lose to specialists over time
1
Reconceive and develop ANZ as a
portfolio of specialist businesses
2
The rise of specialists and new
technologies will offer superior
customer value and will erode
margins
2
Become an “eBank with a human
face”
3
For ANZ more value will be created
through focus and leverage of
intangible assets than traditional
concentration plays
3
Create a portfolio of high growth
business which leverage
capabilities and brands
We have no choice but to transform our economics
Operating Costs
Ratio Schwab to ANZ Retail
%FUM
2
1.8
6
1.2
4
1
0.6
2
0
0
Traditional
Retail Bank
Internet
Bank
Internet
Bank
(at scale)
Customers
Sales
Branches
Staff
Technology vision
Single IP
Network
Customers
Web enabled Channels
Customer
Management
Automated, seamless Straight-through Processing
Standard Platforms
Better Service
Lower Costs
Straight through processing
Customers
Mortgage
Managers
ANZ Branch
Network
Internet
Internet
Service
Provider
Personal Banking Loan Origination System
Web Servers
Application
Servers
Middleware
ANZ’s
Core A/C
Processing
System
ANZ
Network
Intranet
packaged solution
Backend
packaged solution
Credit
Bureau
MIS
IBM M/frame
Back-office
Operations
First implementation for Mortgage products scheduled 2000
Group strategic direction built on specialisation,
eTransformation and growth
Proposition
Strategy
1
Integrated financial services firms
will lose to specialists over time
1
Reconceive and develop ANZ as a
portfolio of specialist businesses
2
The rise of specialists and new
technologies will offer superior
customer value and will erode
margins
2
Become an “eBank with a human
face”
3
For ANZ more value will be created
through focus and leverage of
intangible assets than traditional
concentration plays
3
Create a portfolio of high growth
business which leverage
capabilities and brands
The Web is at the heart of our growth and future
B2C
AST
Real Time
Loan Approvals
B2B
Internal
ERP
Directors on line
Sales & Service
Platform
VIPS
anz.com is now leading the way in B2C
Internet Banking Signups
Internet Banking Users
% of Total Relationships
300,000
250,000
Australia
200,000
10.2
8.9
150,000
8.9
7.9
5.1
100,000
New Zealand
50,000
0
Oct-99
Feb-00
Jun-00
Internet Banking Customers
ANZ
WBC
St G
CBA
Online Applications - Credit Cards
2000
300 Index: 100 = average retail customer
NAB
1500
200
1000
100
0
500
Lending
Balance
Deposit
Balance
Number Profit
of Products
Attrition
0
Oct-99
Feb-00
Jun-00
myanz.com is the latest new offer
Two views of financial services in B2B
Business in Own Right - Model 1
Direct Product Delivery
Financial
Institution
Direct
Delivery
Business
Customer
Facilitation of Other Businesses - Model 2
Trading Enablement
Supplier
Business
Customer
E-Products
Financial
Institution
Buyer
Existing online services
ANZ OnLine
• Domestic, global payments
• 20,000 base stations, 80,000+ users
• Global reporting
• 5M payments per month
• Trade
• 75%+ business customer penetration
FX Online 1999
• Real-time pricing, deal execution
reporting
• $2.5bn turnover
• 250 users
• Spot, forward
Esanda Auto Finance
• Assessment & approval of car finance
• Largest auto finance provider
• Over 300 dealers connected
Established support infrastructure provides:
• High volume capacity
• High reliability time critical processing
B2B example: eGate
Key Features
• Multi-payment, multi-channel,
multi-currency
• Secure gateway
• Covers B2B, B2C, C2C,
e-procurement, e-tailing
 Supports traditional payment
channels
B2B example: eProcurement
Key Features
• Transparent internet marketplace
for both buyer and supplier
• Full range items including
maintenance and repair supplies,
stationery, computing equipment
• Click and go approach, pay for as
you go
 Integration with financial services
 Currently in beta test
 Leveraging corProcure alliance of
14 leading Australian companies
ANZ
eGate
Card
On Account
Other
Clearing
• Merchant
• Issuing
• Other
Internet
MRO
Buyer
Internet
Buyer
MRO Marketplace
Workflow
Catalogues
Authorisation
Punchout
Messaging
Supplier
Interfaces
Internet
Supplier
Japan
Mass affluent market is emerging
24.24
14
Korea
China 3
0.39
3.23
1.5
Hong Kong
0.12
2000
2005
2000
3.5
2005
1.3
Taiwan
2.98
1.24
Thailand
1.11
0.45
2000
Philippines
2005
Malaysia
Singapore
0.89
2.61
Indonesia
1.34
0.5
0.26
0.1
2000
2005
2000
2005
2000
2005
0.1
0.23
2000
2005
The challenges have little to do with banking
UK Interest Margins
The Challenges
%NIM
5
Headline Net Interest Margin
4
Halifax
3
Dramatically reduce the cost of
customer acquisition away from
- Advertising only
- High deposit rates
•
Improve monetisation
- Deposit and asset products
- Non banking products
•
Create loyalty
•
Regulatory hurdles
Egg
Launched
Lloyds/TSB
2
•
1
Supermarkets
0
-1
Egg
-2
95
96
97
98
99
OCBC – ANZ Joint Venture
Leading Financial
Portal
Online
Stockbroking
Internet Service
Provider
Regional e-based financial
institution
+
B2B and B2C
Enabling
Retail Alliances
Banking front
end
ANZ in 3-5 years
•
Leading positions in a number of specialist businesses in Australia,
New Zealand and Asia
•
Portfolio of businesses likely to be narrower and more focused
•
A performance orientated driver of individual businesses
•
Portfolio actively re-shaped by the corporate centre
•
Multiple strategic alliances
•
A range of growth businesses and options
•
A leader in eCommerce
•
Higher market to book ratio
Copies of ANZ strategy
presentations available on
www.anz.com
Contribution balanced between personal
and corporate, and product and customer
%
738m*
368m
100
311m
Other
Small Business
%
100
Institutional
General Banking
Personal
Wealth Mgmt
Corporate
Transaction Services
Asset Finance
Mortgages
International
Funds Mgmt
37m*
Personal
0
* Excluding Grindlays
Capital Markets
Foreign Exchange
Structured Finance
Cards
0
Corporate
Corporate
100
International
0
Customer
Businesses
Shaded
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 email: [email protected]