ING ANZ Joint Venture · 359 241 600 Income 375 235 610 Expenses 243 184 427 PBT 132 51 183 Tax 31...
15
ING ANZ Joint Venture Market Briefing 4 December 2002
Transcript of ING ANZ Joint Venture · 359 241 600 Income 375 235 610 Expenses 243 184 427 PBT 132 51 183 Tax 31...
ING ANZ Joint Venture
Market Briefing4 December 2002
Page 2
Agenda
Elmer Funke Kupper– Introduction
– Environment
John Wylie– Integration
– Flows
Peter Marriott– Financials
Elmer Funke Kupper– Leveraging ANZ’s planner force
– Summary
Page 3
75
80
85
90
95
100
105
No
v-0
1D
ec-
01
Jan
-02
Feb
-02
Mar-
02
Ap
r-0
2M
ay-0
2Ju
n-0
2Ju
l-0
2A
ug
-02
Sep
-02
Oct
-02
No
v-0
2D
ec-
02
MSCI World All Ords
Environment deteriorated markedly following JV commencement
Equity markets
INGA commenced
Index*
* Indexed to 100 as at 1 May 2002 Source: CSFB
3,000
3,500
4,000
4,500
5,000
5,500
6,000
MarchQuarter
JuneQuarter
Industry Net Retail Funds Flow#
Down 11%
Down 23%
Down 15%
$m
# Plan for Life ex cash
Page 4
JV has delivered reasonable performance since 1 May 2002
Operations
• Integration substantially complete from operational perspective
• Efficiency Program (Project 70) launched
Revenue/Flows
• Gross inflows holding up well in core retail products
• Market share maintained during integration
• FuM flat reflecting investor sentiment and market performance
• OneAnswer Mastertrust launched; Full ANZ OneAnswer suite by May 2003
Financials
• Operational profit in line with expectations, however lower FUM starting to impact on run rate
• Strong performance in risk business
• Capital Investment earnings well down reflecting investment markets -ANZ risk hedged
Page 5
• 86% of milestones now complete.
• FTE reduction of 250 achieved
2003 integration tasks
• Product set integration and rationalisation
• IT integration
• Entity rationalisation
• Culture roll-out
Integration progressing well, key challenges remain
0
100
200
300
400
500
600
700
800
900
Totalmilestones
beingtracked
Not due yet Completed Amber Red
Amber: milestone overdue < 1 week
Red: milestone overdue > 1 week
Progress against milestones
Page 6
Inflows holding up well, despite market conditions
0
200
400
600
800
1000
1200
1400
1600
1800
2000
Dec Qtr Mar Qtr Jun Qtr Sep Qtr
INGA (other channels)ANZINGA (other channels)ANZ
$m
JV gross flows excluding cash – year to September 2002*
* Australia only, includes wholesale & mezzanine, excludes cash
Inflows
Outflows
15
17
19
21
23
25
27
29
31
33
35
Sta
rtin
g F
UM
Infl
ow
s
Red
em
pti
on
s
Ma
rket
Movem
en
ts
Clo
sin
g F
um
$b
26.6
6.4
(5.8) (0.6)
26.6
Page 7
Net flows remain healthy
-600
-400
-200
0
200
400
600
800
Retail V2+ EmployerSuper
MasterTrust/Wrap
Mezzanine WholesaleLife
Investments
Closed
$mJV product flows – year to September 2002*
* Australia only
Page 8
JV performance – impacted by adverse equity markets
• Life Insurance business performing well due to improved service, efficiency, and claims management
• Contribution from the Funds Management has held up well despite lower flows
• Lower net flows likely to adversely impact future revenue performance - programs in place to enhance net flows
• Investment earnings well below expectations, although capital invested in equities is conservative– ANZ share hedged September 02
100
120
140
160
180
200
220
2402001 p
rofo
rma
Life
Insu
rance
Funds
Man
agem
ent
Cap
ital
Inve
stm
ent
Oth
er*
Tax
2002 p
rofo
rma
187
31 (5)(62)
(7) 147
* Other includes impact of higher commission rates, lower expenses
ING Australia NPAT$m
3
Page 9
Performance lower in last five months due to integration costs and lower market returns
12 months to September
2002
Capital Investment Earnings -616 10
Funds Management & Life Insurance#
241359 600
Income 235375 610
Expenses 184243 427
PBT 51132 183
Tax 531 36
PAT 46101 147
*PAT for 5 months to Sep 02 is pre non-ANZI goodwill in INGA of $4m and correspondingly reduces contribution to ANZ
# net of commissions
7 months to April 2002
5 months to September
2002*
Page 10
JV capital is conservatively invested, but still had negative impact last half
Equities23%
Cash34%
Fixed Interest
35%
Other8%
Investable Capital - $1.27b
Page 11
-10
0
10
20
30
40
50N
PAT -
5m
onth
s
AN
Z 4
9%
shar
e
Notional
G'w
illAm
ort
AN
ZEquity
a/c
pro
fit
Hed
gin
g
Net
Ret
urn
to A
NZ
Net
fundin
gco
st
Ret
urn
net
of
fundin
gco
sts
Deriving ANZ’s share of JV profit
ANZ Profit from JV$m
(7)
(14)5
(18)20
42
2
7
Page 12
Investing in new financial planners and building productivity
Private Client AdvisorFinancial Planner >12 monthsFinancial Planner <12 monthsAssociate Planner > 12 monthsAssociate Planner < 12 months
Planner mix (total = 337) Planner Productivity
02468
10121416
Pri
vate
Clien
tA
dvis
or
Pla
nn
er
>1
2m
on
ths
Pla
nn
er
<1
2m
on
ths
Ass
oci
ate
Pla
nn
er
ANZ average
$m
Page 13
2003 investment priorities
Productivity and Growth
• Improve productivity and redemptions
– Active management of new advisors – supported by ING
– Incentives skewed more towards FUM than flows
• Build planner force through– Internal development– Experienced recruitment– Network based roles
• Build systematic advice model and workbench
OneAnswer Platform
Tilt Product Offering
Core Product Offering
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Page 14
Summary
• JV performing below expectations, due to earnings on capital
• Funds management business flat, with positive gross flows offset by redemptions and market movements
• Life insurance business performing above expectations
• Majority of synergy benefits on track for delivery in FY03 and beyond
• ANZ has a growing planner force, which will become more productive over time
• ANZ & ING committed to JV for at least 10 years
TargetDouble digit
earnings growth from operations*
*excluding earnings on capital
Page 15
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.comor contact
Philip GentryHead of Investor Relations
ph: (613) 9273 4185 fax: (613) 9273 4091
mob: (61) 411 125 474 e-mail: [email protected]
