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Commonwealth Bank

Commonwealth Bank. International Financial Services Group Executive, Garry Mackrell 29 July 2003. www.commbank.com.au. Disclaimer.

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Commonwealth Bank

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  1. Commonwealth Bank International Financial Services Group Executive, Garry Mackrell 29 July 2003 www.commbank.com.au

  2. Disclaimer The material that follows is a presentation of general background information about the Bank’s activities current at the date of the presentation, 29 July 2003. 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.

  3. Speaker’s Notes • Speaker’s notes for this presentation are attached below each slide. • To access them, you may need to save the slides in PowerPoint and view/print in “notes view.”

  4. International Financial Services (IFS) Overview • Operations and Goals • Key Achievements • IFS Strategy • IFS Business Model • Repositioning in Hong Kong • Strategic Initiatives

  5. IFS IFS 10% 11% Develop integrated financial services model in chosen markets (replicate ASB) CBA CBA Group Group 90% 89% Develop distribution channels, alliances and partnerships One Team, excelling in customer service Re-engineer, simplify and leverage business processes, IT platforms and information management Operations and Goals Divisional Goals Other Profit 2% New Zealand & Hong Kong Zealand 98% Other Assets 3% New Zealand & Hong Kong 97% Data as at December 2002

  6. Key Achievements • Strong performance by ASB Bank • Underlying improvement in business fundamentals within New Zealand and Asian life operations • Grew or maintained market share in all locations • Developed and launched alternative distribution channels within Hong Kong - Distribution joint venture with Cheung Kong Group - Financial Solutions • Divestment of Philippines life operations

  7. IFS Strategy Extend ASB Model Distinctive components Technology & Processing Distribution People & Teamwork Service Experience • High performance • One team • Cross - sell • Customer centric • Single view of customer (Onyx) • Risk and value-based pricing • Single end to end processes • Reduce cycle time • Continuous measurement • Proprietary/aligned • Effective service execution Positioning Strategy Market Leader Service Processes Meet Market Price Products

  8. IFS Business Model - integrated services features Banking Distribution Proprietary Distribution Services Investments OCEO, HR, IT, Finance, Risk etc Distribution Third Party Insurance Centre Functions Integration / Bundling Operations Products Distribution

  9. Repositioning in Hong Kong Distribution Services Business Distribution Business Administration Business Manufacturing Business CMG - agency CMG life admin CMG life CMG - wealth management Financial Services Consumers/ Customers CommServe distribution services CMG - direct sales staff (CSA) CommServe pensions admin Other product providers Financial Solutions AMTD Non- affiliated (IFA’s, Brokers, etc.) CMG Asia External CBA / IFS Key :

  10. Strategic Initiatives • Grow New Zealand • Reposition Hong Kong • Develop Asian options • Leverage (ASB) integrated approach

  11. Commonwealth Bank International Financial Services Group Executive, Garry Mackrell 29 July 2003 www.commbank.com.au

  12. Appendix 1 Overview of IFS Businesses Data as at December 2002

  13. Appendix 1 (Cont’d) Overview of IFS Businesses * commenced 2000 Data as at December 2002

  14. Appendix 2 Market Share Business Profile - ASB Bank “Grow” Market Positioning • Highly favourable market conditions moderating • ASB growing faster than market ASB market share of major banks by gross loans (%) Retail Rural Business/Corp 02/03 Initiatives • Expand and extend existing retail bank excellence into broader financial services / business • Continue strong retail banking growth • Drive business / rural growth by enhancing sales capabilities and service excellence • Continuous improvement focused on customer services and on business process re-engineering 15.7 18.7 12.9 7.9 11.2 7.3 16.6 10.6 8.0 2000 2001 2002 2000 2001 2002 2000 2001 2002 Source: General Disclosure Statements

  15. Appendix 2 (Cont’d) Business Profile - Sovereign Insurance “Consolidate and grow” Market Share Market Positioning • NZ insurance and investments market - low growth / uneven competition • Sovereign - double market share of nearest competitor • Sovereign differentiated by relative scale, adviser support and distribution reach (%) Investments* Inforce 14 02/03 Initiatives 28.3 14 27.7 13 26.5 13 14 • Extend distribution and cross-sell synergies leverage ASB network • Improve profitability through pricing for risk, enhancing persistency and aligning compensation / commissions structures • Consolidate products / legacy systems (Phase 1) 12/00 12/01 12/02 12/01 6/02 12/02 3/03 * ASB Investments

  16. Appendix 2 (Cont’d) Business Profile - Hong Kong “Get fundamentals right / reposition” Market Positioning Market Share • Mid-ranked life insurance player facing strong competition and low growth environment • Migrating from traditional life agency distribution model to broader financial services provider • Support / extend into Mainland China (CommServe and distribution services businesses) (%) New Business Pension Admin 3.4 2.5 5 2.3 5 2.1 5 8 02/03 Initiatives 12/01 06/02 12/02 03/03 12/01 06/02 12/02 03/03 • Reposition traditional life business • Expand CommServe • Support China and Vietnam entry

  17. Appendix 3 PEOPLE & TEAMWORK ASB Bank - Cross Sell One Team Closed Referrals 45% Closing Ratio 34% 43% 51% 29% 34% 32% 22% Sep 01 Dec 01 Mar 02 Jun 02 Sep 02 Dec 02 Mar 03 Jun 03

  18. Appendix 3 (Cont’d) SERVICE EXPERIENCENew Zealand Banking - Customer Satisfaction Auckland University Colgate Main Bank Survey - September 2002 (Major Banks) % satisfied and very satisfied customers (1998-2002) Customer Switching Intentions ASB attracts highest % of customers considering switching

  19. Appendix 4 IFS Management Team ASB Bank/Region Hugh Burrett LoS 43 years Indonesia Life Geoff Coates LoS 27 years Hong Kong/Region Peter Fancke LoS 31 years Sovereign Insurance Simon Swanson LoS 23 years International Financial Services Garry Mackrell LoS 30 years Vietnam Life Rod Carkeet LoS 40 Years PTBC, Indonesia Symon Brewis-Weston LoS - CBA 2 years > Rabobank 3 years > CBA 5 years Fiji Mike Walsh LoS 12 years > Reserve Bank NZ China Life Chong Lee LoS 15 years LoS = Length of service

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