ING ANZ Joint Venture. Market Briefing 4 December 2002

Transcription

1 ING ANZ Joint Venture Market Briefing 4 December 2002

2 Agenda Elmer Funke Kupper Introduction Environment John Wylie Integration Flows Peter Marriott Financials Elmer Funke Kupper Leveraging ANZ s planner force Summary Page 2

3 Environment deteriorated markedly following JV commencement Index* Equity markets Down 11% $m 6,000 5,500 Industry Net Retail Funds Flow# Down 15% 95 5, , INGA commenced Down 23% 4,000 3, Nov-01 Dec-01 Jan-02 Feb-02 Mar-02 Apr-02 May-02 Jun-02 Jul-02 Aug-02 Sep-02 Oct-02 Nov-02 Dec-02 3,000 March Quarter June Quarter MSCI World All Ords * Indexed to 100 as at 1 May 2002 Source: CSFB Page 3 # Plan for Life ex cash

4 JV has delivered reasonable performance since 1 May 2002 Operations Integration substantially complete from operational perspective Efficiency Program (Project 70) launched Revenue/Flows Gross inflows holding up well in core retail products Market share maintained during integration FuM flat reflecting investor sentiment and market performance OneAnswer Mastertrust launched; Full ANZ OneAnswer suite by May 2003 Financials Operational profit in line with expectations, however lower FUM starting to impact on run rate Strong performance in risk business Capital Investment earnings well down reflecting investment markets - ANZ risk hedged Page 4

5 Integration progressing well, key challenges remain Progress against milestones 86% of milestones now complete. FTE reduction of 250 achieved integration tasks Product set integration and rationalisation IT integration Entity rationalisation Culture roll-out Total milestones being tracked Not due yet Completed Amber Red Amber: milestone overdue < 1 week Red: milestone overdue > 1 week Page 5

6 Inflows holding up well, despite market conditions $m JV gross flows excluding cash year to September 2002* $b (5.8) (0.6) Inflows Outflows Dec Qtr Mar Qtr Jun Qtr Sep Qtr INGA (other channels) ANZ INGA (other channels) ANZ 15 Starting FUM Inflows Redemptions Market Movements Closing Fum * Australia only, includes wholesale & mezzanine, excludes cash Page 6

7 Net flows remain healthy $m 800 JV product flows year to September 2002* Retail V2+ Employer Super Master Trust/Wrap Mezzanine Wholesale Life Investments Closed * Australia only Page 7

8 JV performance impacted by adverse equity markets $m ING Australia NPAT 31 (5) (62) Life Insurance business performing well due to improved service, efficiency, and claims management (7) Contribution from the Funds Management has held up well despite lower flows Lower net flows likely to adversely impact future revenue performance - programs in place to enhance net flows pro forma Life Insurance Funds Management Capital Investment Other* Tax 2002 pro forma Investment earnings well below expectations, although capital invested in equities is conservative ANZ share hedged September 02 * Other includes impact of higher commission rates, lower expenses Page 8

9 Performance lower in last five months due to integration costs and lower market returns 7 months to April months to September 2002* 12 months to September 2002 Capital Investment Earnings Funds Management & Life Insurance# Income Expenses PBT Tax PAT *PAT for 5 months to Sep 02 is pre non-anzi goodwill in INGA of $4m and correspondingly reduces contribution to ANZ # net of commissions Page 9

10 JV capital is conservatively invested, but still had negative impact last half Investable Capital - $1.27b Other 8% Equities 23% Fixed Interest 35% Cash 34% Page 10

11 Deriving ANZ s share of JV profit 50 $m ANZ Profit from JV (18) (14) 0 2 (7) -10 NPAT - 5 months ANZ 49% share Notional G'will Amort ANZ Equity a/c profit Hedging Net Return to ANZ Net funding cost Return net of funding costs Page 11

12 Investing in new financial planners and building productivity Planner mix (total = 337) Planner Productivity $m ANZ average Private Client Advisor Financial Planner >12 months Financial Planner <12 months Associate Planner > 12 months Associate Planner < 12 months Private Client Advisor Planner >12 months Planner <12 months Associate Planner Page 12

13 2003 investment priorities Productivity and Growth OneAnswer Platform Improve productivity and redemptions Active management of new advisors supported by ING Incentives skewed more towards FUM than flows Build planner force through Internal development Experienced recruitment Network based roles Core: Core One Product Offering Answer Tilt Product Offering ANZ Imputation Fund Tailor ING Blue Chip Imputation Build systematic advice model and workbench Page 13

14 Summary JV performing below expectations, due to earnings on capital Funds management business flat, with positive gross flows offset by redemptions and market movements Life insurance business performing above expectations Majority of synergy benefits on track for delivery in FY03 and beyond Target Double digit earnings growth from operations* ANZ has a growing planner force, which will become more productive over time ANZ & ING committed to JV for at least 10 years Page 14 *excluding earnings on capital

15 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. For further information visit or contact Philip Gentry Head of Investor Relations ph: (613) fax: (613) mob: (61) gentryp@anz.com Page 15