2000 Interim Results Australia and New Zealand Banking Group Limited - - PowerPoint PPT Presentation
2000 Interim Results Australia and New Zealand Banking Group Limited 1 May 2000 ANZ Delivers on Financial Commitments Double-digit earnings growth 14%. EPS 10% Increase ROE towards 20% 17.8% (17.3%) 53% cost income ratio 51.4%
Double-digit earnings growth
14%. EPS 10%
Increase ROE towards 20%
17.8% (17.3%)
53% cost income ratio
51.4% Costs flat
Reduce risk
Matches peers ex Grindlays
Achieve an optimal capital structure
$500m buyback completed $1bn buyback announced
60 80 100 120 1997 1998 1999 Mar-00 2 4 6 8 10 1997 1998 1999 Mar-00
EPS Tier 1 Ratio
5 10 15 20 1997 1998 1999 Mar-00
ROE
5 10 15 20 25 30 35 40 1998 1999 Mar-00 ProForma
Lending Mix
50 55 60 65 70 1997 1998 1999 Mar-00
Cost Income Ratio
%
WBC CBA ANZ NAB
%
Emerging Markets Mortgages
¢ % %
17.2 17.8 1999 1h00
0.98 1.02 99 1h00
2.41 2.34
99 1h00 1.57 1.69 99 1h00
2.17 2.07
99 1h00
0.34 0.32
99 1h00
3.05 2.93
99 1h00 99 1h00
0.43 0.40
99 1h00
NII/Interest Earning Assets Net Interest Assets Other Income Assets Cost Assets Provisions Assets Business Mix Cost/Income Provisions/NLA ROA ROE “Leverage” Risk
17.6 17.5 99 1h00
X
/ 1.61* */ 52.4 excludes abnormal income
54.5
50 100 150 200 250 300 350 400 Personal Corporate International Other 1H99 2H99 1H00 A$
Personal 45% Corporate 38% International 9% Group 8%
600 700 750 800 850
$m
650
Second Half 1999 First Half 2000
Net Interest Income 34 Lending Fee 20 Other Fee Growth 30 Other Income 17 Doubtful Debts (4) Costs (9) Tax (34) Property Revaluation 30 Sale of Strategic Investments 33 Restatement of Deferred Tax Balance (64)
764 817 Significant one off items (1)
Provisioning: ELP v SP
20 40 60 80 100 120 140
Personal Financial Services Corporate Financial Services International
$m
Non Accrual Loans
ELP SP Mar-99 Mar-00 Mar-99 Mar-00 Mar-99 Mar-00 Specific Provisions Net Non Accrual Loans 1997 1998 1999 1H00
428 444 900 762 657 886 554 871
$m
Percentage of Grindlays Exposure to Countries Rated below ‘Single A’
Proforma ROE March 00 Post Grindlays
Buyback Sale
15.9% 17.8% 17.3%
1.1 0.4
Grindlays Group
%
ELP
48 82
%
Excludes warranties and indemnities
Comparable ROE and leverage yet much
lower risk
Scope for further capital management Proforma includes re-investment of sales
price excluding “free funds” effect of sales provisions
Of Group Exposure <A Of Total Grindlays Exposure Net Lending Assets
EPS - Proforma March 2000 (Annualised)
Buyback Sale 5-6¢
Other Influences
Significantly lower risk Higher quality income streams More consistent business
Buyback Sale 0.8 0.3 2-3¢
Tier 1 Ratios
0.5 RWA Profit
Other Influences
Lower risk implies move to
lower end of 6.0 - 6.5% range
NZ Tracking Stock 0.4% Tier 1 60/40 2000 & 2001
Buyback
2 4 6 8 10 12 1997 1998 1999 1H00 Target
Capital Management Philosophy:
Capital scarce resource to be
managed effectively and efficiently
Maintain capital consistent with
ANZ’s AA status and peer group ratings
Tier 1 (6.5 - 7.0%) Inner Tier 1 (6.0% - 6.5%)
aligned to Economic Capital
$500 million buyback completed
$1B buyback announced
Capital Adequacy
Hybrid Tier 1 Inner Tier 1 Net Tier 2
%
Outcomes
Mortgage & cards share up Personal 45% of group profit FM challenging, new team Leadership position enhanced ROA 0.9% (0.7%) Non accruals 0.4% (0.9%) Grindlays sale Latin America Offices closed Asia-Pacific e-Commerce focus Approaching leadership B2C Strong portfolio B2B Web enabled internal processes Numerous venture investments
Business Strategy
Accelerate growth in Personal Build on strength in Corporate Simplify and focus International Build leadership in e-Commerce
B2B B2C
Employee PCs
Sales & Service Platform
Directors on line
Transformation
FX On-line (ANZ On-Line)
E-Procurement eisa
Enterprise Resource Planning
Improve sustainability of core franchise Radically transform the business Accelerate growth program Develop strategic international positions
Imperatives
Imperative
Improve sustainability of core franchise Radically transform the business Accelerate growth program Develop strategic international positions
Response
Accelerate growth of up-scale segments in Personal Address retail funds management strategic position Seek value enhancing infill acquisitions in Personal Continue to build leadership in Corporate Revolutionise cost base with web-based technology Rapidly enable ANZ customers on anz.com Become a more customer-centric company Build culture and talent to compete in the new economy Accelerate pace of investment in growth segments Build substantial portfolio of e-products and businesses Accelerate medium-term search for transforming acquisitions Improve our capacity longer term to participate in industry consolidation on our terms Build semi-global niche positions in trade, FX, structured finance, cards and e-Commerce Rapidly roll-out e-Commerce investments in Asia
EPS growth that outperforms the average of our peer
banks
Increasing Return on Equity: Target 20% A cost income ratio comfortably below 50% An Inner Tier 1 ratio approaching 6% Maintenance of credit rating in AA category
14.3 11 10.3 10.2 4.9 ANZ WBC St George NAB CBA
Share of Credit Card Spend
10 11 12 13 14 Jun-94 May-96 Apr-98
Share of Housing Lending
% %
15 20 25 30 Jun-94 May-96 Apr-98 Feb-00 Feb-00
Internet Banking Users as % of Main Relationships
Source Ord Minnett and Roy Morgan Research