Performance and Growth
John McFarlane
Chief Executive Officer
6 October 2000
Page 1 of 12
Overview of strategy
Proposition
Strategy
Implications
Specialisation
• Specialists will win
over
conglomerates
• Reconfigure ANZ
as a portfolio of
specialist
businesses
• Distinct strategies
for each customer
and product
business
e-Transformation
• The internet will
add value and
erode margins
• An e-Bank with a
human face
• Use IP technology
to transform costs
and service
Growth
• Value creation
needs both
performance and
growth
• Build portfolio of
growth businesses
which leverage real
capabilities
• Invest cost savings
in high growth
segments
Page 2 of 12
Top quartile financial companies by value focus
on a narrow set of growth themes
Growth expectations*
Top quartile
company
% of share price
Rationale for expectations of growth
Northern Trust
75%
• Leading custody and trust service provider to US high-end
Fifth Third
71%
•
Firstar
64%
•
Standard Chartered
60%
•
Mellon Financial Corp
57%
Bank of New York
57%
Citigroup
55%
•
• Global scale in asset servicing and processing
• Global scale and scope of tangible and intangible assets
Wells Fargo
51%
• Building leading positions in US in e-commerce, mortgage
Page 3 of 12
* Calculated on 4 August 2000
Source: Brokers reports; Hoovers; media
affluent market
Superior driver of revenue growth and cost savings in
branch banking. Potential to replicate business model to
acquisitions
Strong financial performer whilst building scale through
M&A
Strong position in consumer banking in high-growth Asian
markets
Scale in US asset management, servicing and custody
servicing and business lending
The strategy requires maintaining a good balance
between EPS growth and increasing expectations
PE Ratio
Aspiration
Improved EPS
growth and
higher PE ratio
30
Sacrifice earnings
to build growth
25
20
Deliver earnings but
sacrifice growth
PE growth
15
10
ANZ
historically
(1995-1999)
5
EPS growth
0
0
Page 4 of 12
2
4
6
8
10
12
14
16
18
20
EPS growth %
now
Portfolio strategy should reflect degree of
globalisation and leverage real capabilities
FX
Soon
Later
Not yet
Impact of globalisation
Institutional
Banking
Funds Management
B2B
Capital Markets
Esanda
Custody
Cards
B2C
Wealth
Management
Trade
Mortgages
General Banking
Mid Corporate
Small Business
Less developed
Page 5 of 12
GSF
At par
Local leader
ANZ’s capability
Regionally
distinctive
Globally
distinctive
Different businesses need different strategies
Business size by NPAT
Create new
businesses
Invest for
rapid growth
e-Payments
FM GSF
High
e-Asia
GTS
Market
Growth
Institutional
Corporate
Low
• Optimise performance
• Identify new growth
products
Esanda
FX
Small BusCap Mkts
Gen Banking
Mortgages
Low
High
ROE
Page 6 of 12
Wealth
Cards
• Defend position
and return
• Grow selectively
Performance and growth requires outperformance
on costs
%
Cost Income Ratio
70
• Have committed to
substantial cost
reduction and
restructuring programs
to:
65
60
55
NAB
50
40
Page 7 of 12
 Meet EPS targets
WBC
1997
1998
1999
 Increase growth
funding
CBA
ANZ
Mar-00
2000
2001
Cultural change is imperative….and happening
Balancing the autonomy of our 21 businesses
with strong leadership from the centre
Business Unit
Corporate Centre
•
Prime accountability for profit
and value
•
Drive group strategic
direction and set policy
•
Freedom to pursue
opportunities within agreed
boundaries
•
Portfolio management and
resource allocation
•
Cross-Business Unit
synergies
•
Control and oversight of risk,
brands and technology
•
•
Operate using agreed set of
platforms, systems and
shared services
Transfer pricing based on
market
Page 8 of 12
We are giving ourselves the best possible
chance of success
Strategy
•
Distinctive
•
Focused
•
Forward looking
•
Right for ANZ
Page 9 of 12
+
People
+
Execution
•
Organised for
success
•
Delivered over the
last three years
•
MDs appointed
•
Growth momentum:
•
Targets and plans
established
–
–
–
Cards
Mortgages
eCommerce
ANZ in the medium term
ANZ in 1 - 3 years
ANZ in 4 - 7 years
•
•
Substantial portfolio shifts
•
Narrower, more focused
portfolio with leading
positions
•
Increased investment in
high growth business
•
Modern performance
culture
•
Higher stock rating
•
•
Change of emphasis in
portfolio
Substantial e-transformation
reducing costs and focused
service
Performance optimised
–
–
•
Page 10 of 12
Eps, ROE, investment
capital management
Transformational cultural
change
Copy of presentation available on
www.anz.com
Page 11 of 12
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.com
or contact
Philip Gentry
Head of Investor Relations
ph: (613) 9273 4185 fax: (613) 9273 4091 email: gentryp@anz.com
Page 12 of 12