ANZ Commercial Banking - UBS conference, June 2009 David Hisco
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AUSTRALIA AND NEW ZEALAND
BANKING GROUP LIMITED
ANZ Commercial Banking
UBS conference, June 2009
David Hisco
Group Managing Director Commercial BankingNot all commercial banking strategies are alike
ANZ’s approach:
• Commercial objectives driven by our super regional bank aspiration
• A proven operating strategy built on more convenient banking
• The underlying rationale is built on where to play and how to win
• A commitment to our brand
• Delivering a superior customer experience
Fundamental belief in the need for a strong balance sheet:
• We are focused on the best use of available capital – RoA, RoE
• Strong risk management
• Simplification to reduce risk
Customer is at centre of everything we do
• But so is the shareholder!
2ANZ’s journey to becoming a Super Regional bank
commenced in late 2007
TRANSFORM
OUT PERFORM
RESTORE
• Quality on par with global
leaders in our markets
Create
• Institutional back to
system a leading Super
• Best of breed customer
• Restore “jaws” –
increase revenue
experience Regional bank
faster than costs • In-fill mergers and
• Drive Asia profit acquisitions in Asia (core
geographies)
Global quality,
• Capture existing
opportunities regional focus
• Unlock the value of our
• Strategic cost franchise
management
1 to 2 years 2 to 5 years 5+ years
3Growth will be based on 4 core capabilities
FROM TO
Product based Customer centric Customer/segment
focused
Marketing is for Sales/marketing Sales/marketing core
Retail focused skills for everyone
Technology a Technology Technology a core
constraint based source of advantage
Meeting Performance
Out-performing
expectations driven
4Our Commercial Bank Aspirations:
To become the commercial bank of choice in the Asia Pacific, by:
Making convenience, simplicity and responsibility not just a value
proposition but a business system:
• Growing revenue while driving productivity
• Investing in the front end of the business, powered by back end efficiencies.
• Building platforms NOT separate models – “invent once deploy many times.”
• Simplifying product design, distribution, systems and processes to reduce risk
• Developing deeper customer relationships. Analytics has proven a powerful
tool in the retail business - “One view of the customer”.
• Australian risk based pricing models being rolled out more broadly.
5Commercial Banking’s position within the ANZ structure
ANZ divisions
New Zealand
Asia Pacific
Australia Europe & America
Retail Retail Retail
(including partnerships)
Commercial
Commercial Commercial
(Emerging)
Wealth Wealth Wealth
Global institutional
6Commercial - an important part of ANZ’s Super Regional
strategy
Super Regional Commercial business
Asia Pacific, Europe & America
Australia Commercial
ANZ
ANZ
Small Business Banking (Nick Reade) Partnerships
Business Banking (Mark Lang acting)
New Zealand Commercial
Corporate and
Business Commercial
Banking (GrahamBanking
Turley)
Business Rural (Mark Hand) (Turnover up to NZ$150m)
Asset Finance (Esanda)(Moray McDonald) Rural (Charlie Graham)
Asset Finance (UDC) (Anthony Healy)
NOTES: 1 Includes UDC Asset Finance. Business Bank Small and Medium-sized Enterprises (SME) sits in Retail Segment
7Pre-provision profit up 12% in 1H09, NPAT and balance sheet
stability maintained during the economic downturn
Solid pre-provision growth, offset by Customer deposits (AUD bn)
increased credit costs across the portfolio 38 39 38
(AUD m) 10
10 8
7 7 8
22% of
107 9 108 group 17 17 17
profit
5 5 5
1H08 2H08 1H09
422 412
Net Loans and Advances (AUD bn)
70 73 73
+12%
17 17 16
3 3 3
28 29 29
(2%)
22 24 25
1H08 2H08 1H09
2H08 Income Expenses Provisions 1H09 Asset Finance
NPAT & tax NPAT Small Business Banking
Business, Corporate & Commercial
Financial performance includes Australia and New Zealand Commercial businesses Regional Commercial & Agri/Rural
8We are investing in our people and culture to drive improved
customer satisfaction
Customer experience is the critical Aust Commercial Customer satisfaction*
(Customer Satisfaction with Main Bank)
driver:
•Employing staff who live in our 90
customer’s world
Experience in small business
80
Specialisation both by geography
and segment
•Separation of frontline versus back
70
office to enable greater focus
•Higher staff engagement a priority
•Culture and systems built on: 60
Convenience
Simplicity 50
Responsibility Mar-06 Mar-07 Mar-08 Mar-09
ANZ Peer 1 Peer 2 Peer 3 Peer 4
* TNS Business Finance Monitor. Base:All businesses with annual turnover under $40mil (excluding agribusiness) rolling 12 months
9Small Business Banking – multi channel offering a
differentiator
Small Business Banking
• Customer service/sales staff Channel offerings target all sectors of
typically have either worked for or the small business segment
been involved in a family run small
business
• Convenience & Simplicity - our
Customer Complexity
multi-channel offering (branch,
Face-to-face
phone, face to face, web). relationship
for SMEs
• Our small business hub allows our
Phone-based
clients to access data about relationship for
customers and other market trends growing micro-
businesses
• The phone based relationship
proposition in the micro end of the Branch and phone-based
market gives smaller businesses service for micro-
businesses
access to the benefits of a
Relationship Manager
10Business Banking – simplifying and focusing the business
Business Banking (Aus); Corporate & Commercial (NZ)
• Strategic priorities – District of the Future
• Closely aligned to retail strategy (natural
affinity) Benefits:
• improve sales execution (whole of wallet • Greater focus and clear
approach, self fund asset growth, split accountabilities
sales and admin), • Sales calls up by 30%+
• margin management (pricing for risk), • Increased annual review
• tighten risk processes (e.g. underwriting capacity and compliance
standards, credit risk), • Enhanced productivity and
• simplify (product development, processes) customer service
• Streamlined processes
• District of the Future business model will
create room to grow by separating sales • Faster customer response
times
from administration functions
• Proving popular with staff
• Over riding focus is on relationships
rather than transactions
11Business Rural – focused on all sides of the transaction
Regional Commercial & Agribusiness (Aus); Rural Banking (NZ)
• Competitive advantage through the super Aim - leverage best practice and
regional strategy capture both sides of every trade
• 60% of agricultural product is exported
with the bulk of that into Asia
• Leveraging the NZ expertise in both
Australia and in Asia Pac to bank all sides
of the transaction
• Replicating successful small and business
bank sales initiatives.
• Transferring our successful growth strategy
in metro to the rural business
12Leading Asset Finance businesses in Australia and New
Zealand, supporting international network
Asset Finance
Long history in Asset Finance Risk-based pricing attracts low risk
customers and covers higher risk
• ANZ has been in this business for over exposures
50 years
• Essentially 2 businesses – retail auto Traditional Pricing
and business equipment. Risk-Based Pricing
Customer Rate
Risk-based pricing is critical to success
in this business
• Sophisticated pricing model
Selectively growing the business
• Have been highly selective with new
opportunities
Low High
Loan Risk
13To become the commercial bank of choice in the Asia Pacific:
Super Regional a unifying objective across ANZ
All commercial banking strategies are not the same:
• ANZ’s Commercial banking objectives are driven by its super regional bank
aspiration
− Exposure to growing new world economies
• Making convenience, simplicity, responsibility not just a value proposition but
a business system
− A proven operating strategy built on more convenient banking
Fundamental belief in the need for a strong balance sheet:
• Strong risk management
• Experienced team
Customer is at centre of everything we do
• But so is the shareholder!
14APPENDICES
15Management Team - Background
Nick Reade, General Manager, Small Business Banking
Nick joined ANZ in 1999 & was appointed GM, Small Bus Banking in 2007. He has held a number
of senior roles within ANZ including GM Personal Lending & GM Consumer Cards where he was
responsible for managing the large Consumer Credit Card portfolio.
Mark Hand, General Manager, Regional Commercial & Agribusiness
During his 21 year career with ANZ Mark has worked in front-line, off-shore & head office roles.
Most recently he was GM Business Banking Managers and prior to that he held the roles of State
Manager VIC/TAS for Business Banking & Head of Credit & Operating Risk for SME Banking.
Mark Lang, Acting General Manager, Business Banking
Mark has been with ANZ for 29 years & acting in this role for 4 months. Prior to this role he was
GM Business Banking VIC/TAS, & has held a range of relationship positions in Corporate &
Institutional Banking.
Moray McDonald, Managing Director, Esanda
Moray joined ANZ in November 2008 from Citibank Australia where he had been MD of Diners
Club Australia since 2003. He was previously Director of Secured Lending, managing Citibank's
largest residential & commercial mortgage portfolio in the Asia Pacific Region. Moray joined
Citibank in Australia as Director of M & A in 1998.
16Management Team - Backgrounds
Graham Turley, Managing Director, Commercial NZ
Graham has had over 20 years experience in corporate finance and debt capital markets
before taking on his current role late 2008. He joined ANZ over 4 years ago & has held
leadership roles in the New Zealand Corporate Finance Team & ANZ’s global Capital
business.
Charlie Graham, Managing Director, Rural Banking, NZ
Charlie has led ANZ National’s Rural business since the acquisition of The National Bank
of New Zealand (NBNZ) in 2003. He was previously GM Rural Banking for The National
Bank of New Zealand, a role he held from 1996.
Anthony Healy, Chief Executive, UDC Finance
Anthony has more than 17 years experience in the banking & finance sector in senior
corporate & business banking and international roles with the ANZ Group, including
previous roles Deputy Group Managing Director for AMMB Group in Malaysia. Anthony
has been leading the UDC business since November 2008.
17Broadly based revenue generation *
Asset Finance
Business Banking,
18% Corporate & Commercial
39% Banking
25%
Regional Commercial 18%
& Agribusiness/
Rural
Small
Business Banking
*Revenue for Australia & NZ
18The 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
This presentation may contain forward-looking statements including statements regarding our intent, belief or current
expectations with respect to ANZ’s business and operations, market conditions, results of operations and financial
condition, capital adequacy, specific provisions and risk management practices. When used in this presentation, the
words “estimate”, “project”, “intend”, “anticipate”, “believe”, “expect”, “should” and similar expressions, as they
relate to ANZ and its management, are intended to identify forward-looking statements. Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only as of the date hereof. Such statements
constitute “forward-looking statements” for the purposes of the United States Private Securities Litigation Reform Act
of 1995. ANZ does not undertake any obligation to publicly release the result of any revisions to these forward-
looking statements to reflect events or circumstances after the date hereof to reflect the occurrence of unanticipated
events.
For further information visit
www.anz.com
or contact
Jill Craig
Group GM Investor Relations
ph: (613) 9273 4185 fax: (613) 9273 4899 e-mail: jill.craig@anz.com
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