Business Financial Services Market Update Peter Hanlon, Group Executive 25 September 2007
Business Financial Services at a glance
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People
• 3,300 people covering sales, service, product development & management, marketing, credit & risk management, human resources
Customer segments
• • • •
Book size
• Business loans • Business deposits
Product businesses
• Business lending, transaction, savings & investment accounts, corporate cash accounts, payments products, international & trade
Business banking Commercial banking Premium business Regional & agribusiness
Business Financial Services Market Update – 25 September 2007
up to $5m p.a. turnover $5m to $20m p.a. turnover $20m to $100m p.a. turnover All regional & rural business customers $48 bn (1H07) $48 bn (1H07)
Topics for today • Business Financial Services is a key growth investment for Westpac • Our strong first half revenue performance is set to continue • We have a clear set of strategies and our people are committed to deliver
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Business Financial Services Market Update – 25 September 2007
Business financial services – a strong 1st half contribution Composition of Westpac’s cash earnings 1H07
Other 4%
BFS revenue and cost to income ratio
BFS Growth 1H06-H07 • Income up 11% • Lending up 14% • Deposits up 17%
Aust Consumer 27%
1,200
BFS Revenue LHS ($m) Cost to income ratio RHS (%) 36.1
1,100
35.1
34.7
35
1,000
BTFG 12%
30
Aust Business 28%
New Zealand 12% Institutional Bank 17%
• Consistent revenue growth • Well managed cost to income ratio
1,116
900 1,051 1,005
25 800
700
20 1H06
Source: Westpac
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40
Business Financial Services Market Update – 25 September 2007
2H06
1H07
The BFS Team Peter Hanlon Group Executive
Distribution
Product and Projects
Finance, Risk & People
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Tim Harrington
Alastair Welsh
GM Commercial and Regional Business
GM Business Banking
Calvin O’Brien
Alexandra Holcomb
GM Business Product and Process
GM Working Capital and Trade Solutions
Ross Miller
Rod Jackson
GM People and Performance
Chief Operating Officer
Business Financial Services Market Update – 25 September 2007
2005-2007: focus and alignment have built a foundation for growth
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Better systems
• Pinnacle – from 1,620 users in 2005, to over 3,000 users by December 2007
More people
• Added over 500 front line personnel in FY 06 and 07 • Specialist teams such as: Business Acquisition Group, Cash Flow Solutions Group, Women’s Markets, Asian Business
Training and capability
• New business-specific training programs • Over 1,300 attendees in 2007
Distribution footprint
• Dedicated business banking centres • 5 new sites, 2 refurbished, 11 sites in planning
Business Financial Services Market Update – 25 September 2007
We have a clear set of strategies
Vision: to be Australia’s Business Bank of Choice
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Localisation
Developing a stronger local market presence for customers, with a focus on high growth areas
Cash flow and wealth expertise
Differentiating ourselves through cash flow and wealth expertise
Making business easier
Making the bank easier to deal with, for our people and for customers
People development for the long-term
Investing in our people’s skills and capability
Business Financial Services Market Update – 25 September 2007
A substantial lift in BFS employee commitment • Consistent increases in employee commitment place us well above the average scores for both: - Large Australian companies; and - Global financial services companies
Employee commitment
80 76 75 72 70 70 65
69
64
60 55 2005 BFS
Source: Towers Perrin-ISR 2007
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Business Financial Services Market Update – 25 September 2007
2006
Aust Companies
2007 Global Fin Services
Customer satisfaction – gaining momentum, but more to do Business customer satisfaction - very or fairly satisfied - 12 month moving average – July 2007 (%)
85 80 75
Westpac
70 65 60 55 50 Aug-06 Sep-06
Oct-06
Peer 1
Nov-06 Dec-06
Jan-07
Peer 2
Feb-07
Mar-07
Apr-07
Westpac
May-07
Jun-07
Peer 3
Jul-07 Peer 4
Source: TNS Business Finance Monitor July 2007; Base: all businesses with annual turnover up to $100m
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Business Financial Services Market Update – 25 September 2007
2005-2007: Improved market share, with strength at the top end Westpac retail business lending as a multiple of estimated retail business financial system growth (times)
Westpac’s market share of footings by customer turnover (%)
1.4
30
1.3 1.2
1.2
1.1
1.0
0.9
0.8 0.6
1.1
24
25
20
19
19
$2-$5 m
$5-$10 m
20
0.7 0.6
0.6
15
0.5
13
10
0.4 0.2
5
0.0 Jun05
Sep05
Dec05
Mar06
Jun06
Sep06
Dec06
Mar07
Jun07
Source: RBA data, Westpac internal analysis
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Business Financial Services Market Update – 25 September 2007
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