Differentiation Institutional and Business Services
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Differentiation
Institutional and Business Services
Salomon Smith Barney Financial Services Conference
Michael Ullmer
4 March 2003
Institutional & Business Services- 2 -
The material that follows is a presentation of general background information about the Bank’s activities current at the date of the presentation, 4 March 2003. 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.
Disclaimer
Institutional & Business Services- 3 -
Speaker’s Notes
Speaker’s notes for this presentation are attached below each slide.
To access them, you may need to save the slides in PowerPoint and view/print in “notes view.”
Institutional & Business Services- 4 -
We have reorganised our business into client and product groups
Institutional Banking
CorporateBanking
BusinessBanking
Global Markets
Working CapitalServices
InstitutionalBanking
Manage Client relationships Design and manufacture product
People Risk Management Technology Brand
Capital and risk management solutions for Institutions and governments in the domestic and international market
Local relationship management for corporate clients in Australia and the top institutional / corporate clients in New Zealand
Integrated financial services for small, medium and rural businesses throughout Australia
Financial markets facing activities including debt capital markets, foreign exchange, derivatives money market, and commodities.
Product range embracing the full capital structure from senior debt to mezzanine to equity using project finance, structured finance, and corporate lending
Products to support financial and operational working capital needs, such as transaction banking, merchant acquiring and asset financing
Institutional & Business Services- 5 -
The elements of our Competitive Advantage are:
Superior understanding of our client’s needs
Excellent understanding of risk & return trade-off
Tailored client relationship management, locally based providing excellent service/effective sales
Integrated product offering with innovative niches
Talented People focused on achieving
flawless execution
Institutional & Business Services- 6 -
Our new client segments better reflect our client base and will facilitate improvement of segment economics
Source: CBA CRIS Quarter March 2002 annualised; Taylor Nelson Sofres July 2002; ABS 2000-2001; Greenwich & Associates 2000; BRW Top 1000 Companies
Client Turnover
($m)
Client Total
Footings($m) Business Model Segment FocusSegment
Small
Institutional
Top TierCorporate
Corporate
Regional
SME
Segmentation criteria
Number Of
Clients
Bu
sin
ess
Co
rpo
rate
>150
10-150 >5
0.85-5
0.85-5
0.15-0.85
<0.15
800
2,200
9,200
4,300
59,000
118,000
RelationshipManaged
RelationshipManaged
ManagedCentrally
•Share of wallet
•New Clients•Share of Wallet
•New Clients•Share of Wallet•Corporate Focus•New Clients•Share of Wallet•Regional Focus
•Share of wallet•Cost
•Cost
Institutional & Business Services- 7 -
Our business models for Corporate and Business Banking involve changes to a number of areas
Sales Service Credit Product
Corporate
SME
Small
Segment
TopTier
Bu
sin
ess
Ba
nki
ng
Co
rpo
rate
Ban
kin
g
Increased client satisfaction through local dedicated Relationship Executives with product support
Relationship served through sales centre and ‘mobile’ salesforce
Streamlined service team aligned with RE and service centre for day-to-day maintenance to speed up simple enquiries
Mostly through service centre with extended hours of support
Streamlined processes for top-ups, property secured and existing relationships to improve client service (instead of mostly full analysis)
Majority of applications ‘fast tracked’ to improve client service (instead of mostly full analysis)
Tailored from standard product to meet more complex client needs
Rationalised from over 100 products to standard packages making choice for the client simple and reducing costs
Lo
cal R
ela
tion
ship
M
an
ag
em
en
tC
en
tra
lise
d R
ela
tion
ship
Ma
na
ge
me
nt
Regional
Institutional & Business Services- 8 -
On the product front, we have an integrated offering with innovative niches...
Institutional
• Environmental initiatives
• Infrastructure financing
• Specialised Lease advisory
Clients
Working Capital Services
• Transaction Banking
Global Markets
• Local presence
• Corporate Bonds
• Precious metals
Other Divisions
• Retail Financial Services
• Premium Financial Services
•Investment and Insurance Services
Institutional & Business Services- 9 -
…while maintaining a sound credit profile
Top 20 exposures as a % of Total Committed Exposure
Dec 2000
Dec 2001
Dec 2002
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
Commercial Portfolio
29 27 29
15 15 14
36 39 40
171920
0%
20%
40%
60%
80%
100%
AAA/AA* A BBB Other
Dec 01 Jun 02 Dec 02
Institutional & Business Services- 10 -
Strong execution skills are crucial to client service
BIZ PLANPrioritiesActionsOutcomes
•Developed new strategy•Set key strategic priorities
Strategy
•Key factor for success•Underpinned by people
Execution
Flawless execution of strategy and client service is crucial
Deliver top quartile
performance
Institutional & Business Services- 11 -
In summary, highlights of differentiation are
Delivertop quartile
performance over
rolling five year periods
Superior understanding of our client’s needs
Excellent understanding of risk & return trade-off
Locally based client relationship management
Integrated product offering Fla
wle
ss
Ex
ecu
tio
n
s o l u
t i o
n s
c l i e
n t
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