ANZ Wealth Strategy Delivering performance through growth, innovation and productivity AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED 28 November 2012 Joyce Phillips CEO Global Wealth and Private Banking
Agenda Global Wealth and Private Bank Growth segments and markets - the opportunity in wealth Our strategic agenda – innovation and productivity Focus on performance Q&A 1
Renewed focus as a global business 2002 2007 2009 2010 2012 May 2002 June 2007 Throughout 2010 September 2009 March 2012 ANZ moves to full Renewed focus as a Joint venture with ANZ acquires Integration with ING Group - funds E*Trade Australia Australia and New ownership of ING separate division – management and life Zealand divisions Australia and New Global Wealth & insurance - Australia Zealand joint ventures Private Banking and New Zealand ANZ acquires selected RBS Asian businesses Geographic Segments Global Segments China Corporate & Retail Commercial Taiwan Australia Banking Banking Hong Australia Australia Kong Singapore Global Wealth Retail Commercial Global and New Zealand Banking & Agri Institutional Private New Zealand New Zealand Indonesia Banking Australia New Zealand Retail Commercial International Banking Banking Priority wealth markets Asia Pacific Asia Pacific Home markets 2
Opportunity and capability to change the game Growing markets in Australia, New Zealand and Asia An attractive and loyal customer base Leading position in Life Insurance Leading position in KiwiSaver Profitable Private Bank in Australia and New Zealand and presence in high growth Asian countries Improved salaried planner channel +1,100 active aligned dealers Innovation – new ways for customers to engage with their wealth and ANZ Regulatory and other changes support our new customer engagement models 3
Growing wealth markets in Asia and Australasia Forecast Super Forecast Life Risk Global Private Wealth (Australia, FUM $T, (Australia, In-force $B, (2011-16F , $T) CAGR 2011-21F) CAGR 2011-21F) 151 Eastern Europe 23.6 Latin America 3.1 Direct 10% Middle East, Africa Retail Super 2% 123 Retail Pension Asia-Pacific 10% 27% (ex Japan) Direct / 15.8 Employer 19% Super 16% Retail 9% 1.9 12% Japan 15% SMSF‟s 10% 1.3 10.0 Western 24% 27% Europe Industry 9% Group 9% North 27% 31% America Corporate 0% Public 6% 2011 2016F 2011 2016F 2021F 2011 2016F 2021F Source: BCG Global Wealth Management Database 2012, Rice Warner Actuaries 4
Attractive opportunity in our existing franchise Bank customers with a wealth Customer Attrition product from their bank 1 -45% 20% Peer 1 Peer 2 18% ANZ customer ANZ customer without wealth with wealth 16% Revenue per Customer Peer 3 +65% 14% 12% Jul 10 Jan 11 Jul 11 Jan 12 Jul 12 Jan 13 ANZ customer ANZ customer without wealth with wealth 1. Source: Roy Morgan Research. Aust Pop'n aged 14+, rolling 12 months. Traditional Banking Consumer Market (Deposits, Cards & Loans) Peers: CBA Group (excl. Bankwest), NAB Group (incl AVIVA), Westpac Group (incl. St George). Wealth defined as Wealth or Insurance (Superannuation, Managed Investments & Insurance). 5
Industry changes support our strategy Industry Shifts Our Opportunity Our Objective Raise the bar in advice Regulatory Changes Finding new ways for customers to engage with their wealth and ANZ Digital and direct Technology & channels Consumer Behaviour Self directed customer Attitudes to Advice Competing with a distinctive and unique position in the fastest growing segments of „Boomers‟ into the market Demographic Shifts retirement 6
Our strategic agenda Guiding Principles Productivity Innovation Grow relationships Synergies from the Smart Choice direct with existing ANZ global model super customers ― Leveraging our Advice transformation leading life Drive higher returns Building a distinctive, insurance business and value from regional Private Bank across geographies existing businesses New approach to Increasing growth segments Simplify the productivity and business and capacity in advice New digital solutions leverage global Fit for purpose Physical Wealth capabilities platforms Investment Centres 7
Productivity - synergies from the global model ANZ Wealth is contributing to ANZ Group’s productivity agenda Synergies within GW&PB Synergies with the ANZ Group Leveraging product and platform Continuing to leverage ANZ's global capabilities in Australia across the operations hubs region Building capacity to penetrate the Integrating operations across ANZ customer base Australia and New Zealand Integrating new digital propositions Process improvement and with ANZ's online and mobile automation, to maximise straight banking offer through processing Consolidating technical experts in centres of excellence Early progress - headcount reduced 11% YoY; Operating Expenses reduced 3% 2H12 v 1H12 8
Our leading life insurance capability In-force premiums Life Insurance ROE ($m) (indexed) 4% 2,000 200 General 1,500 150 9% Growing premiums in the profitable areas of 1,000 Individual 100 183 general and individual 11% 500 50 100 risk while maintaining Group financial discipline in (14%) 0 0 Group FY11 FY12 In-force Book FY12 Marginal Return Returns on the new Insurance Embedded Value business are ($m) significantly better than our in-force book 3,000 Economic Assumption 22% Cumulative free cashflow 2,500 Total value creation of the Life business up 2,000 19% CAGR excluding Value of future free cashflow economic assumptions 1,500 over 2 years 1,000 FY10 FY11 FY12 9
Increasing planner productivity and capacity Total owned & aligned S&I FUM / ANZ adviser Risk production /ANZ adviser advisers (Australia only ($m)) (Australia only ($k)) (# Advisers, Australia & NZ) 1,500 +13% 1,439 7 6.4 100 30 NZ 6 80 74 +37% 5 60 4 1,109 Australia Target 3 capacity 40 2 20 1 300 0 0 1 ANZ ANZ Industry ANZ ANZ Industry ANZ Peer 2 2011 2012 median 2011 2012 median average Aligned advisers Salaried advisers Source: Comparator Quarterly Benchmarking for Financial Planning Businesses; ANZ internal data; Money Manager Top 100 Advisor Survey Note: Total GW&PB advisors of 2,109 as disclosed in Results Announcement includes New Zealand and Private Bank advisers (1) Active aligned advisers only, excludes inactive and CAR advisers; (2) Source: Money Management top 100 Adviser survey 2012. Peer Average based on Australian advisers only 10
Investment platforms – simplify and focus Launched 2012 Simplification In progress Client Need Making SMSF Self Managed Complex simpler Super Funds Advice E*Trade Wrap Mastertrust Extending Mass Retail Super: Low/No functionality Employer & Direct Solution Advice sophistication Industry FUM $113 billion $43 billion $164 billion Growth 1 (Aust. 2011-16F) Simplifying from 8 registries to 2 1: Source: Rice Warner Actuaries 11
Innovation - Smart Choice Super Choice & Control Great Value Visibility ANZ Smart Choice fees vs other super funds $716 $521 $300 ANZ Average Average Smart Industry Australian Choice Fund Super Super Fund See your super Life stage investments One low investment alongside other fee (0.50%) Choose how involved you accounts want to be with quality Low $50 annual Never lose your super investment options administration fee again 24/7 access Source: SuperRatings „Fees Analysis‟ 21/11/12, based on analysing fees on ANZ Smart Choice Super – 1960‟s diversified investment option as of 1/12/12 and 319 superannuation products in Australia (including 126 industry funds) as at 30/9/12, on a $50,000 account balance. See anz.com/smartchoice for full documents and assumptions. 12
Innovation – raising the bar in advice Our customers are demanding greater value in advice Quality Consistency Alignment Valued Advice Well informed Streamlined, Long-term ANZ personalised advice consistent advice Adviser relationships from highly experience across qualified Wealth all channels and Managers with regions innovative tools Advice Transformation Initiatives Centre of Development of a New Advice excellence for new tied agency Academy and governance and model accredited ANZ risk management Wealth Managers 13
Building a distinctive regional Private Bank In alliance with... Strong domestic A compelling new franchises and affluent Highly regarded Swiss = Private Banking + customer base across Private Bank proposition Australia & New Zealand Robust cross-border Growing distribution World-class investments capabilities, for a = + footprint & customer capabilities genuinely super regional base in Asia private bank Mature deposits & lending Global advisory & Ability to meet all of our = + capability, with banking discretionary mandate customers product needs licenses in key markets capability for the HNW segment 14
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