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ANZ ASIA INVESTOR TOUR 2014 AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED 23 JULY 2014 ANDREW GÉCZY CHIEF EXECUTIVE OFFICER International & Institutional Banking

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ANZ ASIA INVESTOR TOUR 2014

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

23 JULY 2014

ANDREW GÉCZY CHIEF EXECUTIVE OFFICER

International & Institutional Banking

2

SUPER REGIONAL STRATEGY

STRONG CORE

MARKETS

PROFITABLE ASIAN

GROWTH

ENTERPRISE APPROACH

STRONG LIQUIDITY AND CAPITAL MANAGEMENT

DISCIPLINED AND EXPERIENCED MANAGEMENT

ANZ remains focused on building the best connected, most respected bank across Asia Pacific

Improving Customer Experience

Diversifying Revenue

Improving Productivity

Improving Returns

0

10

20

30

40

50

60

2000 1900s 2050

Share of world GDP1

%

Asia

Europe

US

20

6

2

1

1

2

3

12

4

1

1

0

1

5

Intra-Asia

Europe-Asia

A/NZ-Asia

LatAm-Asia

Africa-Asia

MidEast-Asia

N.America-Asia

2001

2020

Share of total world trade2

%

3

Macro fundamentals remain compelling across Asia

The economic centre of the world is shifting back to Asia

By 2020 Asia will account for 35% of world trade with the majority being Intra-Asia

1. Source: Economist Intelligence Unit, 2013 2. Source: ITC, EIU, BCG Analysis, 2013

4

ANZ’s markets are expected to deliver ~50% of growth in banking revenue pools

Forecast absolute growth in Global Banking revenues US$b, 2012-171

Key Asia Pac markets will represent ~US$800b in revenues by 2017

3,087

4,151

Rest of World

53%

Asia World 2017

2%

World 2012

Australia & NZ

46%

10% 4% 6% CAGR:

Forecast revenue pools for key Asia Pacific markets by product US$b, 20171

11%

80

86%

IN

71%

AU & NZ

4%

232

9%

18%

ID

363

11%

JP

80%

11%

CN

27%

53

69%

12% 19% 35

86% 12% 2%

19

44% 13% 43%

17

60% 13%

HK SG

Transaction Banking

Lending and structured finance

Markets

These macro fundamentals propel Asian banking revenue pool growth

1. Source: BCG Banking Pools 2013

• Operating income has almost doubled to $2,277m (FY13)

• >$500m generated in cross border activity

• Current ROE exceeds the cost of capital

• Top 4 Corporate Bank in Asia1

• Institutional Brand awareness in HK – 79%2

• Operates in 15 countries

• ~16,800 employees

• ~4,000 corporate active Asia customers, >2 million including Retail

• #20 in FX market share4

• Best Trade bank in Australasia, Vietnam5

• #1 Mandated Lead Arranger, Asia ex-Japan6

• $1,184m operating income

• <$300m revenue generated from cross-border business (FY10)

• Top 12 Corporate Bank in Asia1

• Institutional Brand awareness in HK – 20%2

5

In 2009 In 2014

• Operated in 13 countries3

• ~6,500 employees

• ~1,800 Corporate customers, ~900,000 including Retail

FINANCIAL CONTRIBUTION

FOOTPRINT

REPUTATION WITH CLIENTS

PRODUCT BREADTH

• #52 in FX market share4

• No Asian based Trade awards

• #3 Mandated Lead Arranger, Asia ex-Japan6

5

1. Greenwich Associates 2009 and 2013 Asian Large Corporate Banking Study; 2. Total ANZ Asia Institutional Brand Awareness survey; 3.Pre-RBS acquisition in 2008‟; 4.Euromoney FX Market Share League Table, 2009 & 2014; 5.Trade Finance, Award for Excellence 2012; 6.Asia, ex-Japan, Thompson Reuters 2009 & 31st March 2014

ANZ has quickly established itself in Asia

IIB NPAT by Region $m

1H14

3,592

55%

45%

FY13

6,602

56%

44%

FY12

6,427

57%

43%

FY09

5,528

60%

40%

Other operating income Net interest income IIB Revenue mix

$m

Asia now represents 36% of IIB’s NPAT, up from 28% in 2013

Non-lending income is growing steadily relative to NII

6

We have steadily diversified earnings as the Business has grown

1H14

1,372

52%

48%

FY13

2,452

59%

41%

FY12

2,111

62%

38%

FY09

1,664

57%

43%

APEA

AUS/NZ

IIB has achieved these outcomes while maintaining a well funded and low risk balance sheet

We continue to be well funded with deposits, enabling strong lending growth…

…while maintaining superior credit quality in Asia

Regional Risk Grade Profile by Total Exposure (%)1

Regional Risk Grade Profile by Tenor (%)1

IIB Balance sheet – Deposits & Loans $b

73% 72%

85%

27% 27%

15%

1%

Asia NZ Aus

Default

Sub-Investment Grade

Investment Grade

NZ

68%

32%

Aus

67%

33%

Asia

30%

70%

Tenor >1 year

Tenor <1 year

1H14

172

92%

8%

1H13

152

93%

7%

1H12

133

93%

7%

1H11

109

93%

7%

1H14

94%

6%

1H13

95%

5%

1H12

96%

4%

1H11

97%

3%

136

114

103

87

Retail Corporate & FIG

Customer Deposits Net Loans & Advances

2

7

+16% CAGR

+16% CAGR

1.As at Mar-14 2.Sub-Investment Grade defined as exposures with a rating below BBB-

8

And we have strengthened our leadership position in home markets

Australia - Domestic Banking Relationships Market Penetration and Competitive Position1

New Zealand - Domestic Banking Relationships Market Penetration and Competitive Position1

3 3 3 4 4 3 3 4 3

39 41 39 38 38

37 42

45 44 37

40 37

30 28 34 31 31 31 22

21 21

21 20

20

60

64 61

68 70

66

2

70

2

73 72 75

2

72

‟14 ‟13 ‟12

72

3rd Tier 2nd Tier Lead

6 6 5 13 16 14 16 14 11

29 22 19

31 32 30

37 33 35

40 43

40

23

28

25

49 48 53 29

27 27

28 24

21

7 5

7

72

81 84

76 76 79

51 55

59

88 86 86

2nd Tier 3rd Tier Lead

Bank 1 Bank 2 Bank 3 Bank 1 Bank 2 Bank 3

1. Peter Lee Associates Large Corporate and Institutional Relationship Banking surveys, Australia and New Zealand 2014; 2nd tier includes „top 3‟ relationships but not lead; 3rd tier includes all relationships outside „top 3‟ relationships, up to a maximum of 8 relationships

ANZ is a market leader in Australia for both overall and lead penetration

We continue to be #1 in New Zealand with a substantial and widening gap

‟14 ‟13 ‟12 ‟14 ‟13 ‟12 ‟14 ‟13 ‟12 ‟14 ‟13 ‟12 ‟14 ‟13 ‟12 ‟14 ‟13 ‟12 ‟14 ‟13 ‟12

Number of countries with presence vs number of distinct products1

9

2009 2014

Singapore 16 32

Hong Kong 13 31

Indonesia 12 22

China 11 22

India 1 20

Greater

Mekong 10 22

Australia 36 36

Our ability to serve our clients and expand our wallet potential has grown

Product and geographic penetration of our international customers

(2009-14)

1.8

2.9 2.6

4.9

Average number of countries per customer

Average number of products per customer

2014

2009

We are now able to provide more products to more customers in more geographies

1. Based on number of 36 distinct product classifications offered

ANZ today

Solid foundations in place

• Reputation with clients established

• Footprint in key geographies and products established

• Relevant to Group performance

Macroeconomics

Remaining attractive

• Trade flows

• Capital flows

• Banking pools

• Growth rates

Customers

Simplicity & transparency

• Rise of Regional Treasury Centres

• Shrinking bank panels

Banking conditions

Increasingly challenging

• Regulatory costs

• Excess liquidity

• Margin pressures

Competitors

Tough but vulnerabilities can be

exploited

• Global‟s distracted

• Regionals expanding

ANZ in the future

Grow Share of Key Corridors

• Trade flows

• Foreign Direct Investment flows

• Wealth flows

The next 5 years will provide notably different conditions to the last 5 – we are well positioned

10

11

Leverage product positions we have built in the region to insight-driven solutions for clients

Convert clients on-boarded post GFC to increasingly profitable multi-product and multi-country relationships

Change how we think of “markets” from a traditional country basis to a corridor focus

Achieve more productive use of our RWAs as a Division

Continuously reduce unit cost and increase STP rates

Against this backdrop, our overarching objective is to deliver growth while also improving returns

Strategic Imperatives

Connecting more Customers by Providing Seamless Value

Delivering Leading Products through Insights

Intensifying Balance Sheet Discipline

Scaling & Optimising Infrastructure

IIB STRATEGIC PRIORITIES

ORGANISATION

Global Markets and

Loans

Global Transaction

Banking

Global Products

4

5

Business Performance Management

Credit & Capital

Management

Business Execution & Performance

6

7

Finance

Risk

HR

Operations

Enablement

8

9

10

11

Customer Segments

Global Banking

Retail Banking Asia Pacific

1

3

International Banking

2

MANAGEMENT PROCESSES

Customer Planning

Processes

People Development

Customer Portfolio Analysis

Strategic Working Group

We have focused on four strategic priorities to address these imperatives and taken steps to sharpen our delivery

12

ROE

(Income/ Equity)

Revenues

Asset

Velocity (Rev/Assets)

Costs

Delivering Leading Products through Insights

Intensifying Balance Sheet Discipline

Scaling & Optimising Infrastructure

IIB PRIORITIES

Connecting More Customers by Providing Seamless Value

Impact to Shareholders

Leverage (Equity/ Assets)

f

• Better pricing and service levels

• Higher STP & Lower Unit Cost

• Reduced Operational Risk

Outcomes for the business

13

Our priorities should drive improved Divisional ROE and allow IIB to contribute to Group commitments

• More effective RWA deployment

• Increased relationship returns

• More customers with deep cross-border wallets

• Serving Customers in lucrative corridors more effectively

• Superior slate of products to form into solutions for clients

• Increasing higher margin, non-lending product mix

Our fundamental competitive strength: connecting newly built Asia with historically strong Australia/NZ

2009 – 2010 2011 - 2013 Today Use Home Market Heritage

Leverage Newly Built Asia

Grow Share of Key

Corridors

• #1 Institutional Player

• Deep Industry Expertise

• Asia-Australia

• Intra-Asia

• Investors-Issuers

• Maturing Client Relationships

• Established Country Franchises

• Competitive Product Footprint

14

APPENDIX

IIB Organisation Structure

16

Customer Segments Global Products Enablement

Head of International Banking

Farhan Faruqui (HK, starting in August)

Head of Global Relationship Banking

Sameer Sawhney (Singapore)

Head of Retail Banking Asia Pacific Sanjoy Sen

(Singapore)

Head of Institutional New Zealand David Green (Auckland)

Head of Global Markets and Loans

Steve Bellotti (Sydney)

Head of Global Transaction

Banking Alan Huse (Acting)

(Melbourne)

Deputy CEO & Business Performance Management

Gilles Planté (HK)

Head of Credit and Capital Management

Kevin Corbally (Melbourne)

CFO Mary MacLeod

(Melbourne, starting in October)

Chief Risk Officer Doug Stolberg

(HK)

Chief Operating Officer Sreeram Iyer (Singapore)

Human Resources Anouk De Blieck

(HK)

Senior Managing Director IIB Cath Carver

Senior Managing Director IIB Warwick Smith

CEO IIB Andrew Géczy (Melbourne)

Chief of Staff

Peter Chan (Melbourne)

Business Execution & Performance

1. As defined by Total Relationships Market Penetration In Asia 2. The Greenwich Quality Index score is based upon a normalized composite of all qualitative evaluations transformed to a scale of 0 to

1,000 with the difference from the average shown. Note: Cross-hairs are calculated by the average of the banks shown in graph.

• ANZ‟s upwards momentum over a short period of time has been significant

• The bank has grown to now occupy its current position of Top 4 Corporate Bank in Asia, based on market penetration

• In addition, the bank has deepened its relationship with its client base into „core‟ and „lead‟ status, which leads to product diversification and higher cross-sell

• Our on-going growth and success will continue to be driven by clients seeing ANZ as a strategic partner to its business

Greenwich Associates Large Corporate Banking Study, Asia

A top 4 Corporate Bank in Asia1

by Market Penetration

6% 12%

11%

11%

17%

24%

17%

0%

10%

20%

30%

40%

50%

60%

Import

ant Rela

tionship

s

2013

Bank A

Bank B

Bank C

Bank F

Bank E Bank D

Bank H

Bank G

Bank I

Greenwich Quality Index2 - Overall Relationship Quality (Difference from the Average)

2010

Greenwich Associates Large Corporate Study Asian Large Corporate Banking Market Penetration

Represents the momentum of growth and quality improvement achieved by ANZ Bank over the past 4 years

17

Foreign direct investment inflows

0

10

20

30

40

50

60

06 07 08 09 10 11 12 13

AU

D b

n

Total

Source: NAB, ANZ Research

Foreign direct investment inflows to Australia recovered following the GFC due to investment in the mining sector

18

Foreign direct investment inflows by industry

0

10

20

30

40

50

60

07 08 09 10 11 12 13

AU

D b

n

Mining Non-mining

Source: NAB, ANZ Research

Foreign direct investment in the Australian mining sector has become much more important in recent years

19

Foreign direct investment inflows by major countries

-20

-10

0

10

20

30

40

50

60

06 07 08 09 10 11 12 13

AU

D b

n

Canada China Japan Singapore UK US

Source: NAB, ANZ Research

The US, Japan and the UK remain the most important sources for foreign direct investment, although investment from China has grown in importance

20

What are the key trade corridors and how have they grown?

21

Capital flows

Trade flows

Wealth flows

Converting physical flow to

cash (e.g. Exports, Imports)

Source of opportunity

Foreign Direct Investment flows

(e.g. Infrastructure)

Financial Institutions managing

financial assets

•We aspire to be a leading regional Trade Bank across Asia Pacific

•Our home markets (Australia & NZ) are the key drivers for trade across Asia Pacific

How we are relevant to clients

•We have established strong relationships with FDI sources (e.g. infrastructure assets)

•Ongoing investments into our home markets where our strengths lie

•Our focus on originate-to-distribute directly aligns to the investor clients

•We now have track record in key products (e.g. Debt Capital Markets, Syndicated Loans)

•Only regional bank with Australia as its anchor market

• Flow product cross-sell (e.g. FX) driving higher ROEs

Positive for ANZ and shareholders

•Only regional bank with Australia as its anchor market

•Complements our focus on our FIG business

•Complements our focus on our FIG business

• Less capital intensive products driving higher ROEs

Key market corridors

Australia China Japan Korea

Australia EMEA Japan Korea

Australia Hong Kong Singapore

Japan Korea

We are devoting management attention to key corridors particularly those to and from our home markets

22

Source: NAB, ANZ Research

Australian merchandise exports by country

0

20

40

60

80

100

120

90 92 94 96 98 00 02 04 06 08 10 12 14

Export

s, ro

llin

g 1

2m

sum

, AU

D b

n

China Japan Korea India United States

Over 35% of Australia’s merchandise exports now go to China, reflecting a sharp increase in bulk commodity exports

23

Short-term Chinese arrivals

0

2

4

6

8

10

12

14

0

10

20

30

40

50

60

70

80

92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14

Share

of to

tal s

hort-te

rm a

rrivals

, %N

um

ber

per

month

(000s)

Share of total short-term arrivals (RHS) Short-term arrivals from China (LHS)

Source: ABS, ANZ Research

The rise in short-term Chinese tourist arrivals has been driven by higher incomes and the emergence of a large middle class

24

Australian merchandise imports by country

0

5

10

15

20

25

30

35

40

45

50

90 92 94 96 98 00 02 04 06 08 10 12 14

Export

s, ro

llin

g 1

2m

sum

, AU

D b

n

China Japan Germany Singapore United States

Source: NAB, ANZ Research

There has also been a sharp increase in imports from China

25

What is the growth rate in intra-regional trade?

26

• Over the coming decade, Asian production is expected to migrate south, away from the mature-aged expensive labour markets of Japan, China and South Korea to the demographically young and low labour cost economies of the ASEAN

• The launch of the ASEAN Economic Community (AEC) will usher in a period of higher intraregional trade growth as powerful synergies across the region unlocked, facilitating more mobile movement in goods and services across the region

• Specifically, the AEC will draw upon the abundant and cheap labour of Myanmar, Laos and Cambodia and combine it with the production sophistication of economies such as Singapore and Malaysia

• Hence ANZ forecasts intra-regional trade growth to be structural faster in the coming decade

Source: ASEAN Regional Information Exchange Database System, ANZ Research

0

200

400

600

800

1000

1200

1400

1600

1800

2000

2000 2005 2010 2015 2020

USD b

n

CAGR (2011-2020):12.9%

CAGR (2000-2010): 12.6%

forecasts

ASEAN intra-regional trade to expand with the commencement of ASEAN Economic Community in 2015

27

Source: WITS, CEIC, ANZ Research

0

200

400

600

800

1000

1200

1400

1990 1994 1998 2002 2006 2010

USD bn

CAGR (1990-2000):16.4%

CAGR (2001-2012):16.8%

• The creation of the ASEAN economic community is likely to be a positive supply side shock similar to China‟s WTO ascension in 2000. As production platforms migrate south to the ASEAN, trade should pick up significantly

Similar to the surge in intra-regional trade following China’s WTO ascension

28

How is the Retail Affluent segment growing?

29

15171366

16501739

1822 1902

413

364

477

535562

643

169

129

174

193

180

207

118

105

127

146144

160

123

84

127

153126

153

96

37

76

10185

114

78

61

82

9991

101

71

58

83

9489

95

44

42

50

5865

73

24

19

24

3032

38

149

138

154

166173

197

0

500

1000

1500

2000

2500

3000

3500

4000

2007 2008 2009 2010 2011 2012

Num

ber

of

HN

WI

Japan China Australia South Korea India Hong Kong Singapore Taiwan Thailand Indonesia Other Markets

Asia-Pacific HNWI Population, 2007-2012 (by Market)

Source: Capgemini Global Wealth Report 2013, ANZ Research

Asian high net worth individuals growing strongly

30

3815

3179

38924135 4231 4452

2109

1672

2347

26572706

3128540

380

519

582542

625

437

310

477

582 477

589

523

181

379

511 408

560

386

272

369

453 439

489

319

276

340

396381

426

225

190

232

272 298

355

234

176

264

302 279

298

85

61

80

100106

125

807

671

749

829 840

969

0

2,000

4,000

6,000

8,000

10,000

12,000

2007 2008 2009 2010 2011 2012

USD

billion

Japan China Australia South Korea India Hong Kong Singapore Taiwan Thailand Indonesia Other Markets

Asia-Pacific HNWI Wealth, 2007-2012 (by Market)

Source: Capgemini Global Wealth Report 2013, ANZ Research

High Net Worth Individual Wealth continues to grow strongly, led by China and Japan

31

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

This presentation may contain forward-looking statements including statements regarding our intent, belief or current expectations with respect to ANZ‟s business and operations, market

conditions, results of operations and financial condition, capital adequacy, specific provisions and risk management practices. When used in this presentation, the words “estimate”, “project”,

“intend”, “anticipate”, “believe”, “expect”, “should” and similar expressions, as they relate to ANZ and its management, are intended to identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Such statements constitute “forward-looking statements” for the purposes of the United

States Private Securities Litigation Reform Act of 1995. ANZ does not undertake any obligation to publicly release the result of any revisions to these forward-looking statements to reflect events or

circumstances after the date hereof to reflect the occurrence of unanticipated events.

For further information visit

www.anz.com

or contact

Jill Craig Group General Manager Investor Relations

ph: (613) 8654 7749 fax: (613) 8654 9977 e-mail: [email protected]