WestpacTrust · Mobile Lenders Retail Footprint South Island North Island New Zealand Total 3.8M South Island WPT in South Island Source: NZ Business Demographics Stats 2001, WPT

1 August 2002

Mike Pratt

Group Executive

WestpacTrust

62

Westpac Investor U

pdate 20020

50,000

100,000

150,000

200,000

250,000

300,000

New Ze

aland NSW VIC

QLD WA SA TAS

Introduction to New Zealand

NZ GDP Growth

NZ

$ M

illio

n

GDP Per Capita, 2000, USD

US

D p

er C

apita

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

New Ze

aland

Austr

alia UK USA

GDP Comparison, 2001

NZ

$ M

illio

n

40,000

50,000

60,000

70,000

80,000

90,000

100,000

110,000

120,000

1994

1995

1996

1997

1998

1999

2000

2001

CAGR = 3.1%

Auckland34%

Source: Statistics NZ

63

Westpac Investor U

pdate 2002Our biggest opportunities…

1 Improve sales effectiveness and

productivity

2 Increase Auckland market share

3 Build Australasian operating model

with local feel

64

Westpac Investor U

pdate 2002Agenda

� Situation analysis

� What are we doing?

� What does success look like?

65

Westpac Investor U

pdate 2002

Situation analysis

66

Westpac Investor U

pdate 2002We have a strong position, with significant opportunities remaining

TodaySuccess

• Largest bank

• Dominant in the South Island

• Highest brand recognition

• Banker to the Government

• Leading retail funds inflow

Key Improvement Areas

• Low share of wallet

• Weak share of Consumer and SME in Auckland

• Low sales force specialisation

• Little leverage of the Australian business

67

Westpac Investor U

pdate 2002Leading retail, second highest business share

21%

14%

17%

24%

15%

0%

5%

10%

15%

20%

25%

30%

ANZ ASB BNZ NBNZ WPT

Retail Market Share(2001)

Mai

n B

ank

Sh

are

Source: KPMG FIPS NZ 2002, WPT, AC Neilsen, Greenwich

Business Lending Market Share (2001)

16%

14%

23%

21%22%

0%

5%

10%

15%

20%

25%


Mar

ket S

har

e

68

Westpac Investor U

pdate 2002Dominant in the South Island retail market

1999 2000 2001` 2002

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%


Mai

n B

ank

Sha

re, P

erce

ntag

e

Main Bank Customer Share of South Island

Per

cent

of T

otal

24492200

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

NZPopulation

WPTBranches

WPTATM's

WPTMobile

Lenders

Retail Footprint

South Island

North Island

3.8MNew Zealand Total

South Island WPT in South Island

Source: NZ Business Demographics Stats 2001, WPT

69

Westpac Investor U

pdate 2002In business, strong in the South Island, weak in AucklandDistribution of Businesses and WPT Customer Share By Geography

35

19

11 12

4

12

7

14

18

3028

32

27

36

0

5

10

15

20

25

30

35

40

Auckland Wellington Christchurch Upper N Island

Lower N Island

Upper S Island

Lower S Island

Distribution of Businesses across areasWPT's % of Business Customers in each area

Geographic Area

Per

cen

tag

e

Dominant share in the South

Island, but small market size

Dominant share in the South

Island, but small market size

Source: NZ Business Demographics Stats 2001, WPT

70

Westpac Investor U

pdate 2002

78%

38%

64%

54%47% 50% 49%

94%99%

83%

68% 65%69%

64%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Youth Coper Starting Out Nester High Net Worth

Transition Retired

WPT Best Competitor

Share of customers’ wallet lags

Share of Customers’ Wallet By Segment

Sh

are

of C

ust

om

ers’

Wal

let

3rd 5th 5th 4th 3rd 3rd 4th

AS

B

BN

Z

AS

B

NB

NZ

NB

NZ

AS

B

AS

B

Source: A C Neilsen

71

Westpac Investor U

pdate 2002Consumer share in Auckland is low

Sh

are

of I

nve

stm

ent W

alle

t

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Q1 1999 Q1 2000 Q1 2001 Q1 2002

Auckland Main Bank Consumer Customer

Share

Home Loan Market Share

ANZ ASB BNZ NBNZ WPT16

%

14%

21%

31%

15%

10%

23%

19%21%

17%

0%

5%

10%

15%

20%

25%

30%

35%

Total CombinedAucklandRegions

Sh

are

of H

om

e L

oan

Wal

let Gap to natural

market share

Sources: A C Neilsen, Statistics NZ

72

Westpac Investor U

pdate 2002A significant gap in SME in Auckland

Distribution of Businesses and WPT Market Share

36%

18%

11% 12%

4%

12%6%

12% 12%

29%

44%

91%

14%

40%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Auckla

nd

Upper

North Isl

and

Lower N

orth Isla

nd

Wellingto

n

Upper

South

Island

Christch

urch

Lower S

outh Is

land

% business (0-5 FTE)

% WPT share ofcustomers

39%

10% 11%16%

12%5% 7%

27%

12%

20%

30%

63%

9%

21%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Auckl

and

Upper

North Is

land

Lower

North Is

land

Wellingto

n

Upper

South

Islan

d

Christch

urch

Lower

South

Islan

d

% business (>5 FTE)

% WPT share ofcustomers

Business Retail Segment – SME Other Segments

Gap Natural Market Share

(22%)

Natural Market Share (22%)

73

Westpac Investor U

pdate 2002We have low sales force specialisation

Number of Mobile Mortgage Managers

0

5

10

15

20

25

30

35

40

45


Expected increase over

next 12 months

389

5,08

1

4,69

2

128

261

12192426180

0

1,000

2,000

3,000

4,000

5,000

6,000

Priva

te and

Prior

ity

Inves

tmen

t Adv

isors MMM HFC

BDM

Total

Retail

Busine

ss RM's

Total

Spec

ialise

d Other

Total

WestpacTrust FTE’s (May 2002)

Retail specialists constitute 5% and

total specialists constitute 8% of

total FTE’s

Retail specialists constitute 5% and

total specialists constitute 8% of

total FTE’s

74

Westpac Investor U

pdate 2002We are not achieving benefits of either autonomy or “Trans-Tasman” sharing

Level of IntegrationAutonomousIntegrated

Trans-Tasman

ASB

NBNZ

BNZ

WPT

ANZ

0%

10%

20%

4 Parent company heavily influences4 Standardised business model, products, systems4 Shared services provided Trans-Tasman

4 Local independently managed 44 Empowerment of local managers

UP

Gro

wth

Level of IntegrationAutonomousIntegrated

Trans-Tasman

ASB

NBNZ

BNZ

WPT

ANZ

0%

10%

20%

Val

ue C

aptu

re

4 Parent company heavily influences4 Standardised business model, products, systems4

4 Local independently managed 4 Nimble decision-making4

75

Westpac Investor U

pdate 2002

What are we doing?

76

Westpac Investor U

pdate 2002We have an integrated program

…and we are in implementation mode

Quick win implementation

Strategy Blueprint

Priority performance

gaps

ImmediateJune 30

Short Term1 – 6 months

Close the Gaps

2002 forecast 2003 target

Competitive market

alignmentDifferentiation

plays

Upgrade business model

Medium Term3 – 18 months

Long Term2 – 3 years

Reposition the Business

Recoup leadership

Leadership sustained

Quick win implementation

Strategy Blueprint

Priority performance

gaps

ImmediateJune 30th

Short Term1 – 6 months

Close the Gaps

2002 forecast 2003 target

Competitive market

alignmentDifferentiation

plays

Upgrade business model

Medium Term3 – 18 months

Long Term2 – 3 years

Reposition the Business

Recoup leadership

Leadership sustained

77

Westpac Investor U

pdate 2002…using a disciplined framework which incorporates current & future profit pools

Recommended Path Forward

Business StrategyBusiness StrategyBusiness Strategy

4 Executive Summary4 Industry Trends4 Competitive Positioning4 Channel/Product/Customer Economics4 End Game Outlook4 Implications4 3 Key Strategic Thrusts

– Improve Sales effectiveness and productivity

– Increase Auckland market share– Develop efficient operating model

4 Executive Summary

4 Industry Trends

4 Competitive Positioning

4 Channel/Product/Customer Economics

4 End Game Outlook

4 Implications

4 3 Key Strategic Thrusts– Improve Sales effectiveness and

productivity– Increase Auckland market share– Develop efficient operating model

Business CasesBusiness Plans

Program PlanProgram PlanProgram Plan

4Key Thrusts

4Timing

4Work Program

4Structure

4Key Thrusts

4Timing

4Work Program

4Structure

4Impact

4Key Issues

4Risks

4Dependencies

Aggregated Business CaseAggregated Business CaseAggregated Business Case

4Integrated Business Case

4Relevant Scenario Explanations

4Implications

4 Integrated Business Case


4 Implications

Scenario 4Scenario 4Scenario 4

Recommended Path Forward

Business StrategyBusiness StrategyBusiness Strategy

4 Executive Summary4 Industry Trends4 Competitive Positioning4 Channel/Product/Customer Economics4 End Game Outlook4 Implications4 3 Key Strategic Thrusts

– Improve Sales effectiveness and productivity

– Increase Auckland market share– Develop efficient operating model

4 Executive Summary

4 Industry Trends

4 Competitive Positioning

4 Channel/Product/Customer Economics

4 End Game Outlook

4 Implications

4 3 Key Strategic Thrusts– Improve Sales effectiveness and

productivity– Increase Auckland market share– Develop efficient operating model

Business CasesBusiness Plans

Program PlanProgram PlanProgram Plan

4Key Thrusts

4Timing

4Work Program

4Structure

4Key Thrusts

4Timing

4Work Program

4Structure

Improve Sales EffectivenessImprove Sales EffectivenessImprove Sales EffectivenessImprove Sales EffectivenessImprove Sales Effectiveness

Increase Auckland Market ShareIncrease Auckland Market ShareIncrease Auckland Market ShareIncrease Auckland Market ShareIncrease Auckland Market Share

4Impact

4Key Issues

4Risks

4Dependencies

Aggregated Business CaseAggregated Business CaseAggregated Business Case

4Integrated Business Case


4Implications

4 Integrated Business Case


4 Implications

Scenario 4Scenario 4

Scenario 3Scenario 3Scenario 3Scenario 3Scenario 3

Scenario 2Scenario 2Scenario 2Scenario 2Scenario 2

1. Market Growth and Competitor Growth

1. Market Growth and 1. Market Growth and Competitor GrowthCompetitor Growth

4 Financial Analysis

4 Key Sensitivities

4 Implications


4 Key Sensitivities

4 Implications




4 Key Sensitivities

4 Implications


4 Key Sensitivities

4 Implications

Develop Efficient Operating ModelDevelop Efficient Operating ModelDevelop Efficient Operating Model

4 Key Initiatives

4 Phasing of deliverables– Priority performance gaps– Competitive market alignment /

differentiation plans

4 Business cases

4 Key Initiatives



4 Business cases

Develop Efficient Operating ModelDevelop Efficient Operating Model

4 Key Initiatives



4 Business cases

4 Key Initiatives



4 Business cases

78

Westpac Investor U

pdate 2002Our biggest opportunities…

1 Improve sales effectiveness and productivity

2 Increase Auckland market share

3 Build Australasian operating model with local feel

79

Westpac Investor U

pdate 2002ü• Ramp up mobile mortgage manager presence

ü• Map out activities, capabilities and costs cross-Tasman to identify opportunities and benefits

ü• Develop a comprehensive model to serve the growing affluent migrant population in Auckland

üü• Leveraging the more sophisticated product capabilities resident in our institutional bank for our private and business customers.

üü• Creating specialist sales roles

üüü• Splitting and rebalancing sales and service roles, particularly in braches and call centres.

üü• Implementation of retail to business / business to retail segment formal referral mechanisms.

Build Aust Operating Model With Local Feel

Increase Auckland

Market Share

Improve Sales

Effectiveness &

Productivity

Initiatives …..

80

Westpac Investor U

pdate 2002

What does success look like?

81

Westpac Investor U

pdate 2002We will measure success across a number of dimensions

Maintain number one status

Outright leader in mortgage flowNumber one flow in retail FUM

Number 1 or 2 for customer satisfaction

Recognised leader in corporate social responsibility

Highest employee commitment in the Westpac Group

2005

Maintain number one status

Stem loss of mortgage share

Lift our customer satisfaction by 5%

Implemented WBC best practices in corporate social responsibility

5% improvement in employee commitment

Financial

2003

Market

Customer

Community

Employee

82

Westpac Investor U

pdate 2002

Documents

WestpacTrust · Mobile Lenders Retail Footprint South Island North Island New Zealand Total 3.8M South Island WPT in South Island Source: NZ Business Demographics Stats 2001, WPT