growing our personal portfolio salomon smith barney conference
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Growing our Personal PortfolioSalomon Smith Barney Conference
Australia and New Zealand Banking Group Limited 19 June 2001
Brian HartzerManaging Director - Cards
Page 2
Building for the future - a distinctive strategy
Proposition
• Entrepreneurial specialists create more value (eg Cards & Mortgages)
• Corporations must embrace new technologies
• Value depends on performance, growth and breaking out
Strategy
• Reconfigure ANZ as a portfolio of 16 specialist businesses
• An e-Bank with a human face
• Drive results, invest in growth businesses and create new paradigms
Perform Grow& Break out
e-Transform
Specialise
Implications
• Specialist approach to customer and product businesses
• Transform the way we do business with IP technology
• Meet expectations, fund growth by cost reduction, transform
Page 3
Transforming ANZ through Perform, Grow and Breakout
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: specialisation and out-growing the market
• Benchmark: competitors in each business• Looking for: breakout moves in key
businesses (eg QTV, Origin)• Horizon: 3-4 years• Success: 4-5 moves taking share and
worth ~AUD1bn+ market cap each
• Focus: performance• Benchmark: market expectations• Looking for: six monthly delivery• Horizon: 1-2 years• Success: meet/exceed
expectationsconsistently
Page 4
Personal Financial ServicesPeter Hawkins
Regional- banking
Wealth Management
Small Business Mortgages Cards
Drive sales and efficiency Invest to grow Aggressively
rebuildMaintain profitable
growthAccelerate
growth
• Advanced marketing/ segmentation
• Straight through processing
• Lower cost to serve
• Expert advice• Open
architecture• “Wrap” facility• Seamless
access
• Build profitable market share
• Relationship based proposition
• Redesign end to end process
• Maintain distribution strength
• Straight through processing
• “Best of breed” delivery platform
• Data mining• Exploit growth
opportunities
Them
ePr
iori
ties
Systems CRM SSP Brand Risk Management
AccountabilitiesPFS 50%Group 50%
Metro-banking
Shared systems and controls are in place to protect synergies
Page 5
Our strategy is delivering results...
Business Unit NPAT
181
45
15
34
58
197
44
14
45
80
191
48
11
58
112
0
50
100
150
200
250
General Banking
Small Business
Wealth
Managem
ent
Cards
Mortgages
Mar-00Sep-00Mar-01
233
322333
380
420
150
200
250
300
350
400
450
Mar-99 Sep-99 Mar-00 Sep-00 Mar-01
Personal Portfolio Profit Growth
CAGR - 34%
$m$m
Page 6
We are developing a track record of building growth businesses
-1000
100200300400500600700
Mar-00 Jun-00 Sep-00 Dec-00 Mar-01 8
10
12
14
16
10
11
12
13
14
15 Mortgage market share
FM inflows (LHS)
Deposit market share
(RHS)
15
20
25
30 Share of credit card spend
3.4
3.6
3.8
4.0
4.2
Mar-98 Sep-98 Mar-99 Sep-99 Mar-00 Sep-00
Personal customers - Australia
%%
%m
$m
95 0096 97 9998 01 95 0096 97 9998 01
Page 7
Personal business units will continue to be key profit drivers
Operating Expense Growth 01-03
Reve
nue
Gro
wth
01-
03 C
AGR
Bubble size in proportion to2001 NPAT
Mortgages
GCM
Metro & Regional
Inst Bank
Wealth
ANZ Investments
GSFGFX
GTSAsia
Pacific
Corp Bank
Asset Fin
NominalGDP
Growth
Low
High
Low High
Cost toIncome falling
Cards
Small Bus
Illustrative
Page 8
We are developing a strong CRM capability….
INFRASTRUCTURE CAPABILITIES
• Enterprise Customer Data Mart (ECDM)
• Tran$act database• Customer scoring and decision
engine• Behavioural credit scoring
systems• Campaign Management System• Front line screen delivery
• Full account and customer NIACC• Segmentation markers and
profiles• Propensity-to-buy scores• Application/behavioural scores• Multiple campaign management
• Call centre, ATM, and SSP integration
• ANZ.com integration• Multi-product decisioning
• Attrition scores by customer• Recovery scores• Automated, event-based
campaigns• Automated prospect list delivery
(“My Sales”)• “Optimal” strategy selection by
customer (longer term)
In Pilot/Develop-
ment
In Place
Page 9
5%
16%
47%
Segment ADeposit
Customers
Segment BEsanda
Segment CMortgages
Event-based Cross-sell(Recent Case Study)
Proprietary Card Cross-sell(Recent Case Study)
100
167
Control Group Propensity to BuyModel
...which is delivering promising results
Index%
Page 10
Growth opportunities in Personal are substantial
Existing revenue $2.6b
10
0
Customer #’s (m)
40% 50%*
Peer Average
Share of Customer Wallet
Potential revenue $650m
* Average share of wallet for CBA, NAB, SGB, WBC - source: Roy Morgan Research
System Growth• Underlying credit growth ~
8-10% pa
Market Share• Product businesses growing
customer numbers and market share
• Customer #’s increasing by 1.0m - translates to $650m in additional revenue pa
Increase Wallet• Customer businesses
deepening wallet share • $650m revenue gain by
matching our peers– Created customer
businesses- Sales programs- CRM
45
Potential revenue $650m
Total potential revenue growth - $1.5b
7.3
Increased wallet on higher share
$160m
Page 11
Personal strategy in action: Cards
Specialise
E-Transform• Straight-through-processing already delivering benefits• “Platform of the future” initiative underway• On-line experience enhancements currently rolling out• Best-in-class risk management initiative underway
• Structured as a ‘monoline’ cards business• Line-of–sight focus on Card Issuing, Merchant Acquiring and
Unsecured Personal Loans• #1 Visa issuer in Australia, 27% of spend• Growing share in Merchant acquiring in Australia and New
Zealand
Perform Grow & Breakout
• Consistent track record of high profit/EVA growth• Investing in culture and staff recognition• Leveraging CRM capabilities to maximise cross-sell• ENZ acquisition• Asian expansion (e.g. Hong Kong)• E-Card joint venture
Page 12
FINANCIAL PERFORMANCE
$NPAT (m)
70% annual growth rate
Total revenue 276 304 335 21%Cost/Income 51% 47% 49% 2%Ratio
Change
34
45
58
Mar-00 Sep-00 Mar-01
The Cards business is performing strongly
Page 13
Market share (Australia)
Card Issuing Australia Card Acquiring Australia
Market Share - % of total valueof credit transactions
21.4%
19.0%
20.0%
21.0%
22.0%
Mar-00 J un-00 Sep-00 Dec-00 Mar-01
Cards Issuing Marke t Share Index
90
95
100
105
110
115
Fe b -
9 9
M a r -
99
A p r -
9 9
M a y -
9 9
J u n -
9 9
J u l - 9 9 Au g -
9 9
Se p -
9 9
Oc t -
9 9
No v -
9 9
De c -
9 9
J a n -
0 0
Fe b -
0 0
M a r -
00
A p r -
00
M a y -
00
J u n -
0 0
J u l - 00 A ug -
0 0
Se p -
0 0
Oc t -
0 0
N o v -
0 0
D e c -
0 0
J a n -
0 1
Fe b -
0 1
90
95
100
105
110
115
Issued A ccounts Gross Outs tandingsA pproved Limits Cardholder Spend
Growing share in all segments of our Cards business...
Page 14
16.23%15.12% 14.52%
10%
12%
14%
16%
18%
Apr-00
May-00
Jun-00
Jul-00
Aug-00
Sep-00
Oct-00
Nov-00
Dec-00
Jan-01
Feb-01
Mar-01
Apr-01
Credit transactions
Eftpos NZ Acquisition - 3% + market share gain in 12 months
Market share of acquiring (NZ only)
...assisted by selective acquisitions
13.5%
Page 15
Meet Freddy …
…and product innovation which is recognised internationally
First Place: Qantas Telstra Visa Card (Australia)Second Place: Qantas Telstra ANZ Visa Card (NZ)Third Place: Amex
“Best Frequent Traveller Credit or Charge Card (International)”*
* source: InsideFlyer Magazine, 2001
Page 16
59%
67%
75%
40%
45%
50%
55%
60%
65%
70%
75%
80%
1999 2000 2001
Meet Freddy …
Cards staff satisfaction levels
Investment in cultural change is creating a dynamic environment
Page 17
Leveraging distinctive capabilities into international markets
• Launch April 2001• Target: Hong Kong
platinum market• Niche product with
unique features to attract profitable segment
• Proof of concept for marketing and operational capabilities in the region
Page 18
Summary
• We are performing well
• We have substantial growth opportunities
• 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 19
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: gentryp@anz.com
Page 20
Copy of presentation available on
www.anz.com
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