Recommended proposal for NAB to acquire AXAs Australian and New - PowerPoint PPT Presentation

Recommended proposal for NAB to acquire AXA’s Australian and New Zealand businesses 17 December 2009 National Australia Bank Limited ABN 12 004 044 937

Transaction summary � Acquisition of AXA’s Australian and New Zealand operations Business to • Australian and New Zealand wealth management and financial protection businesses be acquired (including Australian mature business) • Aligned advice businesses; IPAC, Genesys, AXA Financial Planning, Charter Financial Planning • 50% stake in AllianceBernstein Australia Limited • Acquired businesses will be transitioned to the MLC brand in Australia and BNZ in New Zealand � Attractive pricing Consideration • Cash consideration of A$4,610m • Price to Embedded Value (P/EV) of 1.4x • Price to 2010 broker consensus earnings multiple of 19.5x • Significant synergy opportunity from combining AXA AP with MLC and recently acquired Aviva and JBWere businesses • EPS broadly neutral in second full year (excluding integration costs) � Transaction expected to be voted on by AXA AP shareholders at Scheme Timing meeting in the second quarter of 2010 � Subject to regulatory approval, completion of due diligence, agreement by AXA SA etc � Expected completion during the second quarter of 2010 2

Portfolio Significant Smaller Strong position, Unsatisfactory upside from businesses, with growth returns today in continuing resilient in tough opportunity tough conditions reinvention conditions Key � Business/ � Retail (Aust) � BNZ (NZ) � CYB (UK) Businesses Corporate (Aust) � Investments/ � GWB (US) � nabCapital – (non � Institutional Wealth superannuation franchise activity) � Asia (Aust) � Asset � Insurance (Aust) Management � Markets � Private Wealth (Aust) 150 new business bankers in 2009; 200 in 2010 Maintain value, innovation & options internationally Focus in Australia Restructure nabCapital 3

Strategic rationale � Builds a market leadership position in wealth management to match our market leadership position in business banking and create a positive differentiation for NAB � Brings NZ position to complement BNZ franchise � Leverages MLC’s clear leadership on customer advocacy and transparency � Builds high quality, scalable business able to be sector leading � Sensibly priced deal reflecting point in cycle and multiple paths to value creation 4

Overview of business acquired AXA Australia and New Zealand Wealth management Financial protection Mature � Fourth largest adviser � Australian Business mix - � Long term savings network in Australia individual lump sum products continuing to (~1,600 advisers); 400 NZ (44%), income protection attract inflows planners (30%), group life (26%) � Long term group risk � Top ten position in retail � Individual risk market product currently in run- superannuation and retail share of ~9% off funds management (excluding CMTs) � Investment management joint venture with Alliance Bernstein Inforce annual premiums of FUM of A$48bn 1 /NZ$7bn FUM of A$11bn A$666m/NZ$179m More than one million customers Source: AXA Asia Pacific New Business and Fund Flows announcement for the 9 months to September 2009 Note 1 – Includes AllianceBernstein FUM 5

Inforce Premium and FUM Insurance business mix by inforce annual premiums 1 Insurance business mix by inforce annual premiums 1 NAB Wealth NAB Wealth/AXA Australia NAB/AXA Australia (A$m) NAB Wealth NAB Wealth/AXA Australia NAB/AXA Australia (A$m) NAB Wealth AXA Australia Group risk Group risk 19% O V E R V I E W 21% Individual 297 Individual lump sum lump sum 51% 54% 194 Income Income 680 155 protection protection 339 243 27% 28% Individual risk Individual risk Group risk Total inforce = A$1,262m¹ B U S I N E S S Total inforce = A$1,908m lump sum income Wealth management business mix by FUM 2 Wealth management business mix by FUM 2 NAB Wealth NAB Wealth/AXA Australia NAB/AXA Australia (A$bn) NAB Wealth NAB Wealth/AXA Australia NAB/AXA Australia (A$bn) NAB Wealth AXA Australia C O M B I N E D Other 1% Retirement Retirement Other 1% income income Retail 13 Retail 18% 19% superannuation superannuation and rollovers and rollovers 61% 58% 45 8 6 Unit trust Unit trust 15 13 and and investment investment Retail Unit trust and Retirement 22% 20% superannuation investment income FUM = A$74bn¹ FUM = A$102bn and rollovers ¹ Dexx&R Detailed Risk Statistics (inforce premiums), September 2009; includes Aviva 2 Plan for Life Market Dynamic Report, September 2009; (retail products); includes Aviva 6

Strong market position Market Share – Australian retail superannuation Market Share – Australian retirement income 25.1% 19.4% 19.3% 17.1% 17.8% 13.2% 13.6% 11.4% 10.2% 10.4% 9.3% 9.5% 6.2% 6.1% 6.1% 5.8% 5.6% 4.9% 4.4% IOOF CBA/Colonial WBC/BT ANZ/ING NAB/MLC/Aviva AMP Mercer AXA ANZ/ING IOOF NAB/ MLC/ Aviva & AXA CBA/Colonial AMP WBC/BT NAB/MLC/Aviva Challenger Macquarie Aviva & AXA AXA NAB/ MLC/ Market Share – Retail managed funds Market Share – Individual risk 21.3% 28.3% 15.5% 19.1% 13.6% 12.3% 11.2% 15.1% 8.4% 11.3% 10.9% 9.9% 9.2% 5.8% 5.3% 5.0% 7.5% 6.8% 3.3% 3.4% IOOF ANZ/ING NAB/MLC/Aviva CBA/Colonial AMP WBC/BT Macquarie Mercer AXA Aviva & AXA ANZ/ING NAB/ MLC/ NAB/MLC/Aviva CBA/Colonial AMP WBC/BT Zurich Tower AXA Asteron Aviva & AXA NAB/ MLC/ 7 Source: Plan for Life (Jun 09); Dexx&R (Individual Risk)

Leading advice footprint across key segments Salaried/Aligned Planners by Competitor 1 Advice Coverage by Customer Segment 0 500 1000 1500 2000 2500 3000 3500 MLC/AXA AMP MLC HNW AXA PIS ANZ CBA BT Count charter financial planning Mass Affluent Financial & Total number of Australian financial planners 1 Planning Accumulators Financial Planning NAB/MLC Combined 10% entity 20% Financial AXA Planning 10% Salaried Aligned Other AMP 49% 10% EFA relationships ANZ/ING 9% Aviva – ~4,300 Colonial WBC / SGB 7% AXA – ~6,500 in Australia; ~1,000 in NZ 6% Source: 1 – NAB estimates; AXA AP June results; AMP offer presentation (9 November 2009); Top 100 Dealer Group Survey June 2009 8

Synergies Total synergies of $260 million pre tax p.a. by year five¹ � Opportunity to extract cost savings worth $210 million pre-tax p.a. by year five Cost synergies � Integration will occur in a phased and considered way • Consolidate corporate office and support functions • Insurance and investment platforms in conjunction with Aviva integration � Review of NAB Wealth and AXA businesses will provide an additional opportunity to rationalise and re-prioritise investment spend � Preliminary net-revenue opportunities of $50 million pre-tax p.a. by year five Revenue including: synergies • Transition of cash management and margin lending to NAB • Revenue synergies will be taken in asset management where appropriate • Accelerate growth of North product through NAB advice channels • Improved AXA advisor productivity � Some revenue attrition is expected in both platforms and insurance businesses Revenue • Anticipated to be modest due to the broad alignment of distribution attrition philosophies (e.g. fee for service) and a focus on advisor retention • Limited attrition experienced to date following Aviva acquisition � Key areas of focus are elimination of duplicate support in corporate functions, Integration product rationalisation and system integration. costs • Preliminary cost estimate of $400 million pre-tax over 5 years 1 Fully phased basis. Current year dollars. 9

Acquisition rationale Transformational opportunity for NAB Wealth to establish a clear market leadership position in both wealth management and financial protection � In a changing operating environment, provides NAB with additional scale Strategic in life insurance and investments � Expanded advice reach in Australia � Substantial opportunity to capture cost and revenue synergies � Expanded presence in direct asset management � Accelerates NAB’s NZ Wealth Management strategy � Strengthens technology and product capabilities to enhance our customer and adviser experience and product innovation � Accretive deal with value upside Financial • Valuation underpinned by Embedded Value of $3,235 million 1 • EPS broadly neutral in second full year (excluding transaction and integration costs) • Cost and revenue synergies upside potential Integration � Existing Aviva and JBWere integration provides recent experience base for the Gemstone integration � Phasing of integration activity currently being planned 1 Source: AXA AP 1H09 Investor Compendium 10

Changing operating environment validates NAB’s strategic imperatives � Cooper review likely to result in advantage for scale players Potential � Ripoll review targeting regulatory • Industry commission structure changes • Fiduciary duty for planners • Broaden access to financial advice � Consumer confidence shaken by investment market performance Consumer and collapses pressures � Increasing product complexity � Ageing population seeking more solutions to longevity risk � Heightened pace of consolidation Competition � Trusted advice brand Strategic = � Strong governance imperatives � Scale � Financial strength 11