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Transcript of Corporate Financial Services Roger Davis Group Managing Director Australia and New Zealand Banking...
Corporate Financial Services
Roger DavisGroup Managing Director
Australia and New Zealand Banking Group Limited 20 July 2001
Page 2
The Corporate Portfolio – Today’s Themes
• Portfolio of Specialist Product and Customer Businesses with largely leading market positions
– Defining our businesses
– Corporate objectives
– Customer centricity
– The leading Corporate Bank
– Financial Performance
• Significant growth opportunities
– Deepening share of wallet
– Cautious approach on risk
– On track to meet our commitment to double earnings by 2004
Page 3
ANZ Corporate is different
• Size: Corporate generates 40% of ANZ’s earnings
• International: Corporate earns 30%+ from outside Australia
• Growth: On track to double profits 1999 – 2004
• Customers: Rank #1 on most independent measures
• Strategy: Moving focus from balance sheet to value added services
• Key success factors: Leveraging our intellectual capital
– Mid-market customers – Wall St to Main St
– Institutional customers – increasingly complex product offering
Page 4
The Corporate Portfolio - distinct businesses working together
Corporate Banking
Institutional Banking
Transaction Services
Foreign Exchange
Capital Markets
Systems CRM Culture Technology Brand Risk Management
Structured Finance
Aggregate and Distribute
Innovate and Manufacture Product
• Medium-sized business• Portfolio responsibilities
• Large-sized business• Portfolio responsibilities
• Cash mgmt• Trade finance• Security services
• FX (incl FX Online)• Spot• Forward• Derivatives• Base metals• Commodities
• Origination• Underwriting• Structuring• Risk mgmt• Credit products• Derivatives
• Arranging• Underwriting• Advisory• Structured debt• Project finance
Page 5
Our activities & earnings are generated from 30 countries
ANZ
ANZ
ANZ
ANZ
ANZ
ANZ
ANZANZ
ANZANZANZ ANZANZ
ANZ
ANZANZANZ ANZ
ANZ
ANZANZ
ANZ
ANZ
Geographic Diversityof Earnings
Australia
New Zealand
Middle East
Americas
UK/ Europe
Asia/ Pacific
Page 6
What we want to achieve: The Corporate goals
Increase NPAT by 15%+ CAGR
Achieve an efficiency ratio comfortably in the 40% range
Generate Returns on Equity above 20%
Maintain our #1 position in client satisfaction
Attain a top 3 market position in each of our core businesses
Maintain good governance & high standards in overall risk management
Page 7
We are transforming the way we operate
Specialise
Reorganised into separate customer & product businesses
Focus on businesses where we have a competitive advantage - exit those where we don’t (Futures)
Industry specialisation
e-Transform
e-Enable commodity functions and processes Trade - Magellan/Proponix FX - Atriax; FX On-line Capital Markets – Aus Markets Cash – Web-Pay, Identrus, PKI
Perform Grow& Breakout
‘Customer Obsession’ – an experience which delights Share of Wallet vs Share of Market emphasis Product driven growth initiatives Culture - The ANZ way
Page 8
Each business enjoys strong positions in their own segment
Institutional
Banking
CorporateBanking
Global Transaction
Services
Global Structured
Finance
GlobalCapitalMarkets
Global Foreign
Exchange
CorporatePortfolio
Best FX Bank Australia(Greenwich)
#1 Commercial Paper(Asia Money)
#1 Overall Satisfaction(Greenwich)
#1 Overall Satisfaction(Roberts)
#1 Overall SatisfactionInternational Trade Svcs
Major Aust Banks(Roberts)
#1 Project Finance BankAsia Pacific
(PFI)
Page 9
Specialisation is creating improved financial outcomes...
Corporate Banking
Institutional Banking
Global Capital Markets
Global Structured Finance
Global Foreign Exchange
Global Transaction Services
1H 2000NPAT
1H 2001NPAT
Up 22%
$61m
$67m
$16m
$69m
$32m
$46m
$65m
$88m
$24m
$85m
$40m
$54m
Page 10
…allowing us to better address a large but untapped prize in the corporate base…
Grow wallet share
• New high value products
• New delivery mechanisms
• Improved cross-sell
• Increased sale of 3rd party products
FY 2000Revenue$1.7b
~5,000
0
# Customers
~20%* ~35%
Share of Customer Wallet
Potentialrevenue ~$1.3b
Focus on deeperpenetration of existing
CFS customer base
Total wallet ofANZ customerbase ~$8.5b
*Source: Internal estimate
Page 11
…while maintaining a low risk profile
Risk actively managed
• Quarterly strategy reports prepared for all high risk accounts
• All BB rated & high risk accounts reviewed regularly
• SPs likely to rise towards ELP in line with current expectations
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
Actual SP v ELP charge
-40
-20
0
20
40
60
80
100
120
1H 98 2H 98 1H 99 2H 99 1H 00 2H 00 1H 01
ELP charge SP charge
Page 12
Corporate Portfolio NPAT
0
100
200
300
400
500
600
700
800
900
1000
1999 2000 2001* 2002 2003 2004
We are therefore well on track to meet our promise to double profit by 2004
* Annualised NPAT for 1H 2001
$m
Double 1999 NPAT - required
CAGR of 15%exceeded by
current performance to
date
Actual NPAT
Up 25%
Up 18%
Page 13
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 on track to double
profit by 2004
Page 14
Copy of presentation available on
www.anz.com