westpactrust · mobile lenders retail footprint south island north island new zealand total 3.8m...
TRANSCRIPT
1 August 2002
Mike Pratt
Group Executive
WestpacTrust
62
Westpac Investor U
pdate 20020
50,000
100,000
150,000
200,000
250,000
300,000
New Ze
aland NSW VIC
QLD WA SA TAS
Introduction to New Zealand
NZ GDP Growth
NZ
$ M
illio
n
GDP Per Capita, 2000, USD
US
D p
er C
apita
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
New Ze
aland
Austr
alia UK USA
GDP Comparison, 2001
NZ
$ M
illio
n
40,000
50,000
60,000
70,000
80,000
90,000
100,000
110,000
120,000
1994
1995
1996
1997
1998
1999
2000
2001
CAGR = 3.1%
Auckland34%
Source: Statistics NZ
63
Westpac Investor U
pdate 2002Our biggest opportunities…
1 Improve sales effectiveness and
productivity
2 Increase Auckland market share
3 Build Australasian operating model
with local feel
64
Westpac Investor U
pdate 2002Agenda
� Situation analysis
� What are we doing?
� What does success look like?
65
Westpac Investor U
pdate 2002
Situation analysis
66
Westpac Investor U
pdate 2002We have a strong position, with significant opportunities remaining
TodaySuccess
• Largest bank
• Dominant in the South Island
• Highest brand recognition
• Banker to the Government
• Leading retail funds inflow
Key Improvement Areas
• Low share of wallet
• Weak share of Consumer and SME in Auckland
• Low sales force specialisation
• Little leverage of the Australian business
67
Westpac Investor U
pdate 2002Leading retail, second highest business share
21%
14%
17%
24%
15%
0%
5%
10%
15%
20%
25%
30%
ANZ ASB BNZ NBNZ WPT
Retail Market Share(2001)
Mai
n B
ank
Sh
are
Source: KPMG FIPS NZ 2002, WPT, AC Neilsen, Greenwich
Business Lending Market Share (2001)
16%
14%
23%
21%22%
0%
5%
10%
15%
20%
25%
ANZ ASB BNZ NBNZ WPT
Mar
ket S
har
e
68
Westpac Investor U
pdate 2002Dominant in the South Island retail market
1999 2000 2001` 2002
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
ANZ ASB BNZ NBNZ WPT
Mai
n B
ank
Sha
re, P
erce
ntag
e
Main Bank Customer Share of South Island
Per
cent
of T
otal
24492200
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
NZPopulation
WPTBranches
WPTATM's
WPTMobile
Lenders
Retail Footprint
South Island
North Island
3.8MNew Zealand Total
South Island WPT in South Island
Source: NZ Business Demographics Stats 2001, WPT
69
Westpac Investor U
pdate 2002In business, strong in the South Island, weak in AucklandDistribution of Businesses and WPT Customer Share By Geography
35
19
11 12
4
12
7
14
18
3028
32
27
36
0
5
10
15
20
25
30
35
40
Auckland Wellington Christchurch Upper N Island
Lower N Island
Upper S Island
Lower S Island
Distribution of Businesses across areasWPT's % of Business Customers in each area
Geographic Area
Per
cen
tag
e
Dominant share in the South
Island, but small market size
Dominant share in the South
Island, but small market size
Source: NZ Business Demographics Stats 2001, WPT
70
Westpac Investor U
pdate 2002
78%
38%
64%
54%47% 50% 49%
94%99%
83%
68% 65%69%
64%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Youth Coper Starting Out Nester High Net Worth
Transition Retired
WPT Best Competitor
Share of customers’ wallet lags
Share of Customers’ Wallet By Segment
Sh
are
of C
ust
om
ers’
Wal
let
3rd 5th 5th 4th 3rd 3rd 4th
AS
B
BN
Z
AS
B
NB
NZ
NB
NZ
AS
B
AS
B
Source: A C Neilsen
71
Westpac Investor U
pdate 2002Consumer share in Auckland is low
Sh
are
of I
nve
stm
ent W
alle
t
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Q1 1999 Q1 2000 Q1 2001 Q1 2002
Auckland Main Bank Consumer Customer
Share
Home Loan Market Share
ANZ ASB BNZ NBNZ WPT16
%
14%
21%
31%
15%
10%
23%
19%21%
17%
0%
5%
10%
15%
20%
25%
30%
35%
Total CombinedAucklandRegions
Sh
are
of H
om
e L
oan
Wal
let Gap to natural
market share
Sources: A C Neilsen, Statistics NZ
72
Westpac Investor U
pdate 2002A significant gap in SME in Auckland
Distribution of Businesses and WPT Market Share
36%
18%
11% 12%
4%
12%6%
12% 12%
29%
44%
91%
14%
40%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Auckla
nd
Upper
North Isl
and
Lower N
orth Isla
nd
Wellingto
n
Upper
South
Island
Christch
urch
Lower S
outh Is
land
% business (0-5 FTE)
% WPT share ofcustomers
39%
10% 11%16%
12%5% 7%
27%
12%
20%
30%
63%
9%
21%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Auckl
and
Upper
North Is
land
Lower
North Is
land
Wellingto
n
Upper
South
Islan
d
Christch
urch
Lower
South
Islan
d
% business (>5 FTE)
% WPT share ofcustomers
Business Retail Segment – SME Other Segments
Gap Natural Market Share
(22%)
Natural Market Share (22%)
73
Westpac Investor U
pdate 2002We have low sales force specialisation
Number of Mobile Mortgage Managers
0
5
10
15
20
25
30
35
40
45
ANZ ASB BNZ NBNZ WPT
Expected increase over
next 12 months
389
5,08
1
4,69
2
128
261
12192426180
0
1,000
2,000
3,000
4,000
5,000
6,000
Priva
te and
Prior
ity
Inves
tmen
t Adv
isors MMM HFC
BDM
Total
Retail
Busine
ss RM's
Total
Spec
ialise
d Other
Total
WestpacTrust FTE’s (May 2002)
Retail specialists constitute 5% and
total specialists constitute 8% of
total FTE’s
Retail specialists constitute 5% and
total specialists constitute 8% of
total FTE’s
74
Westpac Investor U
pdate 2002We are not achieving benefits of either autonomy or “Trans-Tasman” sharing
Level of IntegrationAutonomousIntegrated
Trans-Tasman
ASB
NBNZ
BNZ
WPT
ANZ
0%
10%
20%
4 Parent company heavily influences4 Standardised business model, products, systems4 Shared services provided Trans-Tasman
4 Local independently managed 44 Empowerment of local managers
UP
Gro
wth
Level of IntegrationAutonomousIntegrated
Trans-Tasman
ASB
NBNZ
BNZ
WPT
ANZ
0%
10%
20%
Val
ue C
aptu
re
4 Parent company heavily influences4 Standardised business model, products, systems4
4 Local independently managed 4 Nimble decision-making4
75
Westpac Investor U
pdate 2002
What are we doing?
76
Westpac Investor U
pdate 2002We have an integrated program
…and we are in implementation mode
Quick win implementation
Strategy Blueprint
Priority performance
gaps
ImmediateJune 30
Short Term1 – 6 months
Close the Gaps
2002 forecast 2003 target
Competitive market
alignmentDifferentiation
plays
Upgrade business model
Medium Term3 – 18 months
Long Term2 – 3 years
Reposition the Business
Recoup leadership
Leadership sustained
Quick win implementation
Strategy Blueprint
Priority performance
gaps
ImmediateJune 30th
Short Term1 – 6 months
Close the Gaps
2002 forecast 2003 target
Competitive market
alignmentDifferentiation
plays
Upgrade business model
Medium Term3 – 18 months
Long Term2 – 3 years
Reposition the Business
Recoup leadership
Leadership sustained
77
Westpac Investor U
pdate 2002…using a disciplined framework which incorporates current & future profit pools
Recommended Path Forward
Business StrategyBusiness StrategyBusiness Strategy
4 Executive Summary4 Industry Trends4 Competitive Positioning4 Channel/Product/Customer Economics4 End Game Outlook4 Implications4 3 Key Strategic Thrusts
– Improve Sales effectiveness and productivity
– Increase Auckland market share– Develop efficient operating model
4 Executive Summary
4 Industry Trends
4 Competitive Positioning
4 Channel/Product/Customer Economics
4 End Game Outlook
4 Implications
4 3 Key Strategic Thrusts– Improve Sales effectiveness and
productivity– Increase Auckland market share– Develop efficient operating model
Business CasesBusiness Plans
Program PlanProgram PlanProgram Plan
4Key Thrusts
4Timing
4Work Program
4Structure
4Key Thrusts
4Timing
4Work Program
4Structure
4Impact
4Key Issues
4Risks
4Dependencies
Aggregated Business CaseAggregated Business CaseAggregated Business Case
4Integrated Business Case
4Relevant Scenario Explanations
4Implications
4 Integrated Business Case
4Relevant Scenario Explanations
4 Implications
Scenario 4Scenario 4Scenario 4
Recommended Path Forward
Business StrategyBusiness StrategyBusiness Strategy
4 Executive Summary4 Industry Trends4 Competitive Positioning4 Channel/Product/Customer Economics4 End Game Outlook4 Implications4 3 Key Strategic Thrusts
– Improve Sales effectiveness and productivity
– Increase Auckland market share– Develop efficient operating model
4 Executive Summary
4 Industry Trends
4 Competitive Positioning
4 Channel/Product/Customer Economics
4 End Game Outlook
4 Implications
4 3 Key Strategic Thrusts– Improve Sales effectiveness and
productivity– Increase Auckland market share– Develop efficient operating model
Business CasesBusiness Plans
Program PlanProgram PlanProgram Plan
4Key Thrusts
4Timing
4Work Program
4Structure
4Key Thrusts
4Timing
4Work Program
4Structure
Improve Sales EffectivenessImprove Sales EffectivenessImprove Sales EffectivenessImprove Sales EffectivenessImprove Sales Effectiveness
Increase Auckland Market ShareIncrease Auckland Market ShareIncrease Auckland Market ShareIncrease Auckland Market ShareIncrease Auckland Market Share
4Impact
4Key Issues
4Risks
4Dependencies
Aggregated Business CaseAggregated Business CaseAggregated Business Case
4Integrated Business Case
4Relevant Scenario Explanations
4Implications
4 Integrated Business Case
4Relevant Scenario Explanations
4 Implications
Scenario 4Scenario 4
Scenario 3Scenario 3Scenario 3Scenario 3Scenario 3
Scenario 2Scenario 2Scenario 2Scenario 2Scenario 2
1. Market Growth and Competitor Growth
1. Market Growth and 1. Market Growth and Competitor GrowthCompetitor Growth
4 Financial Analysis
4 Key Sensitivities
4 Implications
4 Financial Analysis
4 Key Sensitivities
4 Implications
1. Market Growth and Competitor Growth
1. Market Growth and Competitor Growth
4 Financial Analysis
4 Key Sensitivities
4 Implications
4 Financial Analysis
4 Key Sensitivities
4 Implications
Develop Efficient Operating ModelDevelop Efficient Operating ModelDevelop Efficient Operating Model
4 Key Initiatives
4 Phasing of deliverables– Priority performance gaps– Competitive market alignment /
differentiation plans
4 Business cases
4 Key Initiatives
4 Phasing of deliverables– Priority performance gaps– Competitive market alignment /
differentiation plans
4 Business cases
Develop Efficient Operating ModelDevelop Efficient Operating Model
4 Key Initiatives
4 Phasing of deliverables– Priority performance gaps– Competitive market alignment /
differentiation plans
4 Business cases
4 Key Initiatives
4 Phasing of deliverables– Priority performance gaps– Competitive market alignment /
differentiation plans
4 Business cases
78
Westpac Investor U
pdate 2002Our biggest opportunities…
1 Improve sales effectiveness and productivity
2 Increase Auckland market share
3 Build Australasian operating model with local feel
79
Westpac Investor U
pdate 2002ü• Ramp up mobile mortgage manager presence
ü• Map out activities, capabilities and costs cross-Tasman to identify opportunities and benefits
ü• Develop a comprehensive model to serve the growing affluent migrant population in Auckland
üü• Leveraging the more sophisticated product capabilities resident in our institutional bank for our private and business customers.
üü• Creating specialist sales roles
üüü• Splitting and rebalancing sales and service roles, particularly in braches and call centres.
üü• Implementation of retail to business / business to retail segment formal referral mechanisms.
Build Aust Operating Model With Local Feel
Increase Auckland
Market Share
Improve Sales
Effectiveness &
Productivity
Initiatives …..
80
Westpac Investor U
pdate 2002
What does success look like?
81
Westpac Investor U
pdate 2002We will measure success across a number of dimensions
Maintain number one status
Outright leader in mortgage flowNumber one flow in retail FUM
Number 1 or 2 for customer satisfaction
Recognised leader in corporate social responsibility
Highest employee commitment in the Westpac Group
2005
Maintain number one status
Stem loss of mortgage share
Lift our customer satisfaction by 5%
Implemented WBC best practices in corporate social responsibility
5% improvement in employee commitment
Financial
2003
Market
Customer
Community
Employee
82
Westpac Investor U
pdate 2002