1 ubs financial services conference “the strategic imperative” michael cameron chief financial...
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UBS Financial Services Conference“The Strategic Imperative”
Michael CameronChief Financial Officer
22 June 2005
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The material that follows is a presentation of general background information about the Bank’s activities current at the date of the presentation, 22 June 2005. 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
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Agenda
Which new Bank - the CBA strategic centrepiece
Other strategic opportunities
• Ongoing productivity improvements
• Segmented product offerings – Banking division
• Compartmentalisation of manufacturing and distribution in Wealth Management
• International growth
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Which new BankThe CBA Strategic Centre Piece
2004/05 milestones
Customer service
Our people
Simple processes
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In 2003 the Bank anticipated
Slowing credit growth
Increased competition
Margin compression
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Engaged People
• Service and Sales
• CommSee
• Branch Refurbishment
Supported byThrough
“To Excel in Customer Service”
• Leadership
• Performance Management
• People Development
• CommWay
• Process Redesign / simplification
• Support FunctionRedesign
Via
Customer Service
Simple Processes
People
Systems
Our transformation vision
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1. Service & Sales Management - remaining staff trained
2. Branch Refurbishment - refurbish 125
3. NetBank - new service implemented
4. CommSee - platform built and deployment commenced
5. CommSee - 40% customer-facing staff trained
6. Segment Model - pilot completed
7. Performance Culture - performance management system implemented
8. Performance Culture - new learning curriculum available
Pro
cess
Peo
ple
Cu
sto
mer
9. CommWay - 40 process simplification initiatives completed
10. Support Function Redesign - implementation of 14 functions completed
11. Wealth management systems - reduced from 11 to 7
12. Procurement - 10 key categories renegotiated
13. IT Efficiency - run-rate savings of $80m realised
75%
80%
90%
70%
Percentage complete* Target date
Jun 05
Jun 05
Mar 05
Apr 05
Jun 05
Jun 05
Dec 04
Jun 05
Jun 05
Jun 05
Jun 05
Jun 05
Jun 05
June 05 milestones
*As at end April 2005
85%
65%
30%
60%
80%
80%
As at February 2005 WnB Update
Milestone
100%
100%
100%
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Customer service
Customer-focussed Service and Sales across Bank
New Netbank launched
CommSee progressing to plan
One Team Referrals working
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Our people
CommLeader
Performance Management
People Development
Internal Service Quality measured quarterly
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Simple processes
Becoming ‘everyday’ behaviours
Over 300 skilled at ‘lean/Six Sigma’ methodologies
33 CommWay projects completed
Increased security and integrity of customer data
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Dec 03 Jun 04 Dec 04
Revenue Benefits Cost Saving
WnB Benefits
Actual benefits ($m)
63
174
301
27
36
65
109
117
184
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WnB opportunities
CommSee Extensions
NetBank Product
One Team Referrals
Best Sourcing
CommWay
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Other strategic initiatives
Ongoing productivity improvements
Segmented product offerings
Wealth management structure
International growth
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Productivity improvements
(1) On a cash basis
Expense ratios (1)
50.1%
44.9%
0.74%
Banking(2)
Funds
Mgt(4)
Insurance(3)
Dec 04
54.7%
50.4%
0.87%
Jun 03
CAGR = 6%
CAGR = 8%
CAGR = 11%
(2) Expense to income
(3) Expense to average inforce premiums (4) Expense to average funds under administration
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Segmented product offerings - Deposits
Ongoing review of customer base and product options
Emphasis on effective segmentation
Drawing on benefits to customers of access and convenience
Product examples:
NetBank Saver (5.4% online product)
5.6% Term deposit account
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Segmented product offerings – Premium Business Services
Launch of Capped BetterBusiness Loan
Launch of Business Line of Credit – over 1,600 accounts already
Launch of the Premium Plantations Project 2005
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Wealth Management – structure
Symetry Limited acquisition
WM Restructure and Alignment - separation of asset mgt and platforms
Joint venture with Acadian Asset Management
30% minority interest in 452 Capital
Hiring of Warwick Negus to head up Global Asset Management
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Why
• Rapid growth in financial services demand in Asia
• Creates option plays for long term growth
Where
• Regional strategy focused on Asia-Pacific
• Greater China, Indonesia, and India are new key markets
• Target mass affluent customers in large urban areas
How
• Selectively establish bank deposit / investor / customer base
• Build on Group capabilities in integrated financial services
International Growth
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Summary
Which new Bank delivering
Expect to exceed original Which new Bank targets
Product segmentation initiatives
Well positioned for growth
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UBS Financial Services Conference“The Strategic Imperative”
Michael CameronChief Financial Officer
22 June 2005