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
Jan 13, 2016
Growth in our Corporate Portfolio
Presentation toUBS Warburg Financial Services Conference
Sydney, 6 June 2001
Roger DavisGroup Managing Director
Australia and New Zealand Banking Group Limited
Page 2
ANZ is executing a distinctive strategy
Proposition
• Entrepreneurialspecialists createmore value
• Corporationsmust embracenew technologies
• Value depends onperformance,growth andbreaking out
Strategy
• Reconfigure ANZas a portfolio of 16specialistbusinesses
• An e-Bank with ahuman face
• Drive results,invest in growthbusinesses andcreate newparadigms
Perform Grow& Breakout
e-Transform
Specialise
Implications
• Specialistapproach tocustomer andproductbusinesses
• Transform theway we dobusiness with IPtechnology
• Meetexpectations,fund growth bycost reduction,transform
Page 3
ANZ’s Corporate business is undertaking a similar transformation
Perform Grow& Breakout
e-Transform
SpecialiseReorganised 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-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
“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 4
specialisation and out-growing
Breakout
Grow
Perform
• Focus: long term ‘destiny’
• Benchmark: global industry/players
• Looking for: transforming moves
• Horizon: 5-10 years
• Success: dramatic market cap increase
• Focus: the market
• Benchmark: competitors in each business
• Looking for: breakout moves in keybusinesses (eg QTV, Origin)
• Horizon: 3-4 years
• Success: 4-5 moves taking share andworth ~A$1b+ market capeach
• Focus: performance
• Benchmark: market expectations
• Looking for: six monthly delivery
• Horizon: 1-2 years
• Success: meet/exceed expectationsconsistently
Transforming ANZ through Perform, Grow and Breakout
Page 5
The Corporate portfolio plays a major role in ANZ’s future
ANZ Group Segments(by 1H 2001 NPAT)
Personal46%
Intnl & Subs15%
Corporate39%
CorporateBanking
InstitutionalBanking
Global CapitalMarkets
Global ForeignExchange
Global StructuredFinance
Global TransactionServices
$65m
$88m
$24m
$85m
$40m
$54m
CorporateBusinesses
(by 1H 2001 NPAT)
Page 6
Our strategy is delivering results...
NPAT Trends
61
67
16
32
69
46
60
70
18
34
89
40
65
88
24
40
85
54
0
10
20
30
40
50
60
70
80
90
100
Corporate Institutional CapitalMarkets
ForeignExchange
StructuredFinance
TransactionServices
$m
Mar-00Sep-00Mar-01
7%
31%
25%
23%
50%
17%
Page 7
...and a low risk profile
Risk actively managed
• Quarterly strategy reports prepared for all high risk accounts
• June to October 2000 - all BB rated accounts within Corporate reviewed in expectation of downturn
11.7% 12.3% 11.7%
18.2% 19.1% 19.4% 20.3%
26.7% 26.9% 27.4%
37.9%
5.3% 4.1%4.0% 3.6%
9.3%
26.4%
38.4% 38.9%38.4%
Sep-99 Mar-00 Sep-00 Mar-01
AAA to BBB+
BBB to BBB-
BB + to BB
BB-
> B
Corporate risk grade profile
>B = B, B-, CCC& non-accrual
-40
-20
0
20
40
60
80
100
Mar-00 Sep-00 Mar-01
ELP charge
SP charge
Actual SP v ELP charge
$m
Page 8
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)
0bn
2bn
4bn
6bn
8bn
10bn
Sep- 98 Mar- 01
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
0bn
2bn
4bn
6bn
8bn
10bn
Sep- 98 Mar- 01
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
0bn
2bn
4bn
6bn
8bn
10bn
Sep- 98 Mar- 01
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
0bn
2bn
4bn
6bn
8bn
10bn
Sep- 98 Mar- 010.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
0bn
2bn
4bn
6bn
8bn
10bn
Sep- 98 Mar- 01
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
0bn
2bn
4bn
6bn
8bn
10bn
Sep- 98 Mar- 01
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
Real Estate Operators & Dev.
Manufacturing Retail Trade
Agriculture Accomm. Cafes & Restaurants
Construction
% in CCR 9-10 (RHS scale)x
Page 9
All Corporate units are targeting revenue growth to exceed cost growth
Operating Expense Growth 01-03
Reven
ue G
row
th 0
1-0
3 C
AG
R
Bubble size in proportion to2001 NPAT
Mortgages
GCM
Metro & Regional
Inst Bank
Wealth
ANZ Investments
GSFGFX
GTS
Asia
Pacific
Corp Bank
Asset Fin
NominalGDP
Growth
Low
High
Low High
Cost toIncome falling
Cards
Small Bus
Illustrative
Page 10
We are on track to meet our commitment to double profit by 2004
Corporate Portfolio NPAT
0
100
200
300
400
500
600
700
800
900
1000
1999 2000 2001* 2002 2003 2004
* Annualised NPAT for 1H 2001
$mDouble 1999
NPAT - required CAGR of 15%
Actual NPAT
Page 11
Our main focus is on growing total wallet share
Grow wallet share
• New high value products
• New delivery mechanisms
• Improved cross- sell
• Increased sale of 3rd party products
FY 2000 revenue $1.7b
~5,000
0
# Customers
~20%* ~35%
Share of Customer Wallet
Potentialrevenue ~$1.3b
Focus on deeperpenetration of existing
CFS customer base
Total walletof ANZ customer
base ~$8.5b
* source: internal estimate
Page 12
The elements of our growth
Opportunistic• New customers• New products/initiatives• New geographies
Client Constrained• Wallet share offers better
growth opportunities
Challenging• Competition• Limited geographic footprint• Balance sheet & risk• Time & technology• Regulatory tax accounting• Customer rich franchise
DynamicOrganisationalimplications
Technology BasedGrowth opportunities can also leverage technology:• Atriax, AusMarkets• Proponix• PICI• e-Payments• Infrastructure plays
New Product Focussed• Credit derivatives• Infrastructure equity (Morrison)• Private equity• Soft & base metal commodities• Securitisation (new)• Equity derivatives
Non-balance sheet,fee income based• Less capital intensive
Growth is...
Page 13
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
Source: Roberts Research, Survey 2000
Overall Satisfaction with Bank
7.67.5
7.67.4
6.97.0
7.1
6.4
6.0
6.5
7.0
7.5
8.0
1997 1998 1999 2000
ANZ NAB CBA Westpac
Page 14
Deepening penetration of our high value, predominantly fee based products
ProjectFinancing
CorporateAdvisory
SpecifiedFinancing
Gold
BaseMetals Oil
Softs
Counter-PartyExposure
Management
StructuredProduct
StructuredWealth
Products
Portfolio& OptionPrograms
TradeFinance
Processing
CorporateI nternet CashManagement
StructuredI nfrastructureI nvestment
Pre-SoldEquity
Underwritings
PrivateEquity
EQUITYCREDIT
DERIVATIVESEQUITY
DERIVATIVES
COMMODITIESFINANCINGTRANSACTION
SERVICES
ProjectFinancing
CorporateAdvisory
SpecifiedFinancing
Gold
BaseMetals Oil
Softs
Counter-PartyExposure
Management
StructuredProduct
StructuredWealth
Products
Portfolio& OptionPrograms
TradeFinance
Processing
CorporateI nternet CashManagement
StructuredI nfrastructureI nvestment
Pre-SoldEquity
Underwritings
PrivateEquity
EQUITYCREDIT
DERIVATIVESEQUITY
DERIVATIVES
COMMODITIESFINANCINGTRANSACTION
SERVICES
Page 15
Corporate Financial ServicesRoger Davis
Corporate Banking
Institutional Banking
Transaction Services
Foreign Exchange
Capital Markets
Grow EVA through
efficiency and penetration
Grow EVA through
efficiency and penetration
• Middle market wallet share
• Back office technology and processes
• Staff recruitment and training
• Customer and product interface
• Customer management systems
• Staff recruitment and training
• Trade finance system and benefits
• Streamlined organisation
• Growth strategies for high potential products
• Revenue momentum
• eFX-based initiatives
• Global commodities business
• High IP product growth
• Cost reduction initiatives
• Staff recruitment and retention
Th
em
eP
riori
ties
Systems CRM MARS B2B eCommerce Brand Risk Management
AccountabilitiesCFS 50%Group 50%
Controls are in place to protect synergies and maximise opportunities
Structured Finance
• Securitisation and asset sales
• Revenue growth initiatives
• Partnerships and alliances
Invest for growth in trade and
transactions
Defend FX business and
grow selectively
Maximise franchise and
grow selectively
Execute strategy
selectively
Page 16
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
We are on track
to continue growing strongly
Page 17
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 GentryHead of Investor Relations
ph: (613) 9273 4185 fax: (613) 9273 4091 e-mail: [email protected]
Page 18
Copy of presentation available on
www.anz.com