Скачать презентацию An Outside-In View The Business Environment for Suncorp Скачать презентацию An Outside-In View The Business Environment for Suncorp

9fb422d3035b0f8f2b849f9d3e287b1e.ppt

  • Количество слайдов: 72

An Outside-In View The Business Environment for Suncorp Bank to F 2017 & beyond An Outside-In View The Business Environment for Suncorp Bank to F 2017 & beyond Phil Ruthven Chairman, IBISWorld 1 Suncorp Bank Business Leader Conference April 2015

Topics 1. The World Outside Suncorp Bank 2. The Influential Environments 3. The Operating Topics 1. The World Outside Suncorp Bank 2. The Influential Environments 3. The Operating Environments 4. Suncorp Bank’s Industry 5. Enterprises & Keys To Success 2 Suncorp Bank Business Leader Conference April 2015

1. The World Outside Suncorp Bank 3 Suncorp Bank Business Leader Conference April 2015 1. The World Outside Suncorp Bank 3 Suncorp Bank Business Leader Conference April 2015

The Environment for Suncorp Bank WORLD Our Suncorp Bank © IBISWorld The Environment for Suncorp Bank WORLD Our Suncorp Bank © IBISWorld

So, how much do you need to know or worry about. . . The So, how much do you need to know or worry about. . . The Influential Environments (4) 1. 2. 3. 4. The world environment, growth, regions, nations, demography etc. ? The resources environment, developed/natural (incl. ecological) ? Our community, its changing demography, lifestyles and spending ? The economic environment, the “business weather” conditions ? The Operating Environments (6) 5. 6. 7. 8. 9. 10. The market, local and global The government environment, laws, taxes, policies, incentives ? The finance market, equity, debt, exchange/interest rates, treasury ? The services market, to outsource none-core activities and functions ? The labour market, for executives, employees and customers ? The goods market, raw materials, semi-/finished goods, prices ? The Immediate Environment Your industry, WBP, size, growth & disposition, competitors etc. ? Your Own Business Its IP, financials, sales, operations, TQC, productivity, R&D, HR etc. ?

2. The Influential Environments The World Our Resources Our Community Our Economy 6 Suncorp 2. The Influential Environments The World Our Resources Our Community Our Economy 6 Suncorp Bank Business Leader Conference April 2015

The World Environment The World Environment

World GDP Growth Real growth (PPP), 1950 -2016 (F) Purchasing Power Parity (PPP) terms World GDP Growth Real growth (PPP), 1950 -2016 (F) Purchasing Power Parity (PPP) terms 2012 2013 2014 2015 2016 3. 0% 3. 1% (F) 2. 9% (F) 1950 -1969 growth in US$ market terms * The world decline in 2009 was -2. 0% when measured in $US market price terms IMF/OECD/Economist//IBISWorld: 16/04/15

Economic Growth: 2015(F) 20 Largest Economies (ppp ranking) World Growth 2015 (F), 3. 1% Economic Growth: 2015(F) 20 Largest Economies (ppp ranking) World Growth 2015 (F), 3. 1% -0. 9 Economist/IBISWorld 16/04/15

World’s 30 Largest Economies Poland Argentina Thailands Netherlands S. Africa Pakisthan Egypt Malaysia Colombia World’s 30 Largest Economies Poland Argentina Thailands Netherlands S. Africa Pakisthan Egypt Malaysia Colombia 2015 (E) 0. 9% 0. 8% 0. 7% 0. 6% Purchasing Power Parity (PPP) terms Rest of World 21 - 3 (200 nations) 0 th Na tions 15. 0% 7. 0% 19. 0% USA 11 th – 20 th Nations 14. 4% Italy S. Korea Canada Spain Indonesia Turkey Australia Iran Saudi Arabia Taiwan 2. 5% 2. 1% Mexico ance Fr 16. 9% UK 2. 6% 2. 7% 2. 1% 1. 9% 1. 7% 1. 6% 1. 5% 1. 4% 1. 1% 17 th 1. 1% il z Bra Ru ia ss 2. 9% y an rm e G 3. 6% In Japan 5. 2% China di a 5. 9% World’s 230 nations US$ 97 trillion IMF/IBISWorld 05/01/15

The World’s Economic Regions In 2015 Share of World GDP (ppp basis) Eastern Europe The World’s Economic Regions In 2015 Share of World GDP (ppp basis) Eastern Europe W&C Europe North America 3. 6% 19. 0% Indian 23. 0% ME 6. 0% S-C 7. 2% Africa C&S 4. 0% Asia Pacific 31. 0% America 6. 1% 2015 World GDP, $US 96. 7 trillion IBISWorld 03/03/15

Asia Economy Asia Pacific + Indian S-C GDP (ppp) Vietnam 1. 2% Indones Aus Asia Economy Asia Pacific + Indian S-C GDP (ppp) Vietnam 1. 2% Indones Aus Th trali ia 4. 2% Korea 5. 2% 14. 0% aila a 3. 1 nd % Ma Singapore 1. 1% Ph 2015 (F) Others 1. 2% ili p sia p. 1 2. 2 1. 7. 5% % % lay 44. 5% China Japan 16. 1% India H/K Taiwan 2. 9% 1. 2% $US 35. 8 trillion Wikipedia/IBISWorld 03/03/15

Exchange Rate - $US To $A Monthly average, to April 2015 For the $A Exchange Rate - $US To $A Monthly average, to April 2015 For the $A to rise in value against the $US (after the current collapse) as per the upward tunnel would require much higher inflation in the USA as the aftermath of the extraordinary quantitative easing (QE) of the past 5 -6 years and substantive recovery in mineral prices. If neither occur, the mid-value of the $A would be around $0. 87 over the next decade. April 2015 $US 0. 77 Source: Reserve Bank of Australia/IBISWorld forecasts 16/04/15

Australia’s National Resources Australia’s National Resources

Australia’s National Resources F 2014 ns um Inv nd ent ori es Financial Assets Australia’s National Resources F 2014 ns um Inv nd ent ori es Financial Assets (IP ) du rab les 9. 3% 2. 3 % 1. 3 % Mining 9. 2% Timber 0. 1% 1 % th e ra er Ru ro pe rty O Co ell. P 2 1. . 0% 7% Int l. L an d rl an d Natural Resources Natural resources c. 30% of total. Majority (70%) is Assets developed resources $ 12. 8 trillion ment Rural buildings 0. 5% 8% 2. Foreign Liabilities 2 5. 0% e 8. 3% ructur st Infra Liabilities $ 2. 6 trillion Net Assets $ 10. 2 trillion m Co 13. 7% Equip nd /I la 27. 0% 0% 8. Residential Land $ 2. 61 trillion 15. 8% Commercial & Industrial Buildings Dwellings (incl. Transfer Costs) 1 Software, intangible assets, mineral exploration, spectrum licences $ 12. 8 trillion Source: ABS 5204. 78 and IBISWorld adjustments & forecasts 23/11/14 2 Net Foreign Debt $ 865 billion (55% of GDP)

Australian Community Australian Community

Our Changing Society v v v v Living longer More generations co-existing Living with Our Changing Society v v v v Living longer More generations co-existing Living with more leisure Smaller/different households Moving to coast and equator Changing ethnic mix (Eurasian) New tribalism (less local) A stabilising divorce rate Fast rising incomes & wealth Apartment living rising Home leasing on the rise More spending on services Outsourcing tasks and chores v v v v Rise of virtual shopping Living with ICT The Internet/Information age Increasing knowledge Increasing financial literacy New entertainment & sports Electronic “guardian angels” Working differently New industries/ occupations Changing spirituality Outlawing discrimination Changing politics (ideologies) Ecological sensitivity

Living Longer And Working Longer Life Expectancy And The Retirement Age of Male Australians Living Longer And Working Longer Life Expectancy And The Retirement Age of Male Australians Who would want to be retired for 30+ years in 2100; and could the nation afford it? t Age Female life expectancy en Retirem Rising on ti Rising Formal Educa Source: ABS, Australian Historical Statistics, IBISWorld

Our many Generations In F 2014 Federation (90+ years) 0. 7% Gen Zers Silents Our many Generations In F 2014 Federation (90+ years) 0. 7% Gen Zers Silents Baby Boomers 49 -71 years 25. 6% 16. 5% ls” ughtfu o “the th Net 27. 7% ttens” o “spoilt r Generation X Mos tp gen owerfu erat l ions (<13 years) 72 -89 years 7. 7% shi one ds” “ol d fa 21. 9% 33— 48 years “quiet achievers “fr ee -r Y) ( eration Gen 13 -32 y ears an g er s ” ” Generational Types Civics Adaptives Idealists 23. 6 million persons Reactives IBISWorld 30/06/14

Household Income By Source (% of total basis) Year to December 2014 Non-life insurance Household Income By Source (% of total basis) Year to December 2014 Non-life insurance receipts (2. 4%) Transfers (2. 7%) Workers compensation (0. 8%), Othe r Invest. Inc (imputed/ non-cash) 6. 0% Dwelling ownership 9. 0% ome 11. 7% 9. 4% Mixed Income 54. 5% Wages % 9. 4 are lf We Unincorporated enterprises sole traders, partnerships (wages & profits combined) $ 1397 billion ($ 150, 200/household) Source: IBISWorld 08/03/15

Income, Wealth & Taxes Australian Households H’Holds Income Share of Total By Quintile, Housing Income, Wealth & Taxes Australian Households H’Holds Income Share of Total By Quintile, Housing Payments Wealth F 2013 (E) Taxes Super Payments Richest Well Off Middle Struggle Poorest 2. 3% 3. 3% ($ billion) Source: ABS/IBISWorld 31/07/14

Australian Household Expenditure Year to December 2014 Depreciation Dwell/Propty Interest Consumer Debt Int Unincorp. Australian Household Expenditure Year to December 2014 Depreciation Dwell/Propty Interest Consumer Debt Int Unincorp. Interest Transfers 6. 2% 4. 3% 0. 6% 0. 5% 1. 1% H’Hold durables 2. 7% Motor vehicles 1. 3% Other 0. 7% ed elat Capital R Taxes Savings 6. 6% (& social contributions) 14. 0% 12. 7% Fin. & Ins. Serv. 8. 2% (& o t dwe her lli cost ng s) 16. 5% 13. 7% 1 ent R s ice erv r. S he Ot 2. 5% o M 6. 3% pit ali ty Entertainment 3. 5% Communicns. Fares Note: 1 includes imputed rent (home ownership) ty li bi s Durable 4. 7% (Gambling 3. 3%) 1. 5% 2. 0% $ 1397 billion Non-durables H cat ealth ion Ho s Edu 4. 3% 2. 9% 4. 1% Food Alc. & Tobacco Clothing Utilities Veh. Operation Other 6. 4% 2. 3% 2. 0% 1. 6% 3. 2% 1. 0% ($150. 200 per household) Source: ABS 5206/IBISWorld 08/03/15

Australian Household Assets & Debt June 2014 Assets Net Assets Including Unfunded superannuation Net Australian Household Assets & Debt June 2014 Assets Net Assets Including Unfunded superannuation Net per H’Hold $ 845, 600 Super. & Life Housing 22. 1% Including Securities & Loans (owner-occupied) 41. 4% Shares 6. 3% H’hold durables, collectables) ($ 216, 250 per household) 13. 1% s 3 r Pr op. . 0% 2. 5% % Othe ble Du ra Ot he r 1 (& . 8% its y) osurrenc p c De Household Debt $ 2011 billion 9. 8 Equipment, IP, Inventories $ 9875 billion, $ 7864 billion Commercial & Rural Housing (investment) $ 9. 9 trillion Housing $1809 bn, Other pers. $150 bn. Businesses (unincorporated) $300 billion Debt servicing comes from wages (mainly), rental property returns, and interest & dividends from liquids & securities Sources: Reserve Bank Statistical Tables B 20; ABS 5204 -51, 24/11/14

House & Flat Prices Across Australia Median F 2015(F) Apartments/Flats Houses Average of nation’s House & Flat Prices Across Australia Median F 2015(F) Apartments/Flats Houses Average of nation’s 9. 6 million dwellings(incl. non-capitals) $595, 000 in June 2015 Price $‘ 000 Source: RPDATA/ IBISWorld 07/04/15

Australia’s Economy Australia’s Economy

Australia’s Economic Growth Annual real GDP growth (%) progressed in quarters to December 2014 Australia’s Economic Growth Annual real GDP growth (%) progressed in quarters to December 2014 (and forecast to December 2019) 3. 5% pa (52 years) 3. 2% pa (since 1987) Years, ended June Source: IBISWorld: 04/03/15

Household Consumption Expenditure Growth 4 qtr moving average to December 2014 3. 7% pa Household Consumption Expenditure Growth 4 qtr moving average to December 2014 3. 7% pa (52 years) 3. 0% pa (since 1987) Recessions do not occur from collapsing consumption expenditure (mainly households), but from capital expenditure which does go severely negative every 8½ years. Source: ABS: 5206 -05 08/05/15

Capital Expenditure Growth 4 qtr moving average to December 2014 4. 6% pa (52 Capital Expenditure Growth 4 qtr moving average to December 2014 4. 6% pa (52 years) 5. 3% pa (since 1987) Recessions occur when GFCE falls more than 8% Years, ended June Source: ABS 5206 -06 08/03/15

Inflation GDP Deflator vs CPI, Annualised % change December 2014 Inflation CPI GDP Deflator Inflation GDP Deflator vs CPI, Annualised % change December 2014 Inflation CPI GDP Deflator Deflation IBISWorld 08/03/15

Australia’s Industry Mix Shares of GDP, in F 2013 price terms Year to December Australia’s Industry Mix Shares of GDP, in F 2013 price terms Year to December 2014 Pers. & Other Serv. Cult & Rec. Serv. Agriculture Hospitality 0. 8% Educ ation Ind. Taxe s 1 6. 4% alt h 1. 8% He 6. 5 2. 3% Mining 8. 5% turing c anufa 3% M 6. % 4. 6% 7. 9% Construction Govt. Adm. 5. 3% % erv 6. 1 Tech S f. & 2. 8% Pro 8. 4% lls. we 8. 5% p D ’Shi O Finance & Insurance Rental, Hiring & Real Estate Less subsidies, + stat discrep 4. 6% 3. 9% W’Sa ling 4. 5% Retaili ng Tran spor 2. 9% Admin. & Support Services 1 Utilities 2. 7% GDP $1578 billion t es Includ stal, po using wareho Info Media & Communications Sectors Primary Secondary Tertiary Quaternary Quinary Note 1: includes stat. discrepancy (0. 2%) ABS 5206 -26 IBISWorld 08/03/15

Changing Importance of Industry Divisions 2050 2020 2000 1980 1960 1940 1920 1900 1880 Changing Importance of Industry Divisions 2050 2020 2000 1980 1960 1940 1920 1900 1880 1860 1840 1820 1800 Shares of GDP by Industry Division, 1800 -2050 Agriculture Mining Primary Sector Manufacturing Utilities Construction Secondary Sector W’Sale Trade Retail Trade Transport, Postal Tertiary Sector Media & Telecom Finance & Insurance Rental, Hiring. R Estate Dwelling O’Ship Quaternary Sector Prof & Tech Services Admin Services Public Admin/Safety Ind taxes less subsidies Education Hospitality Quinary Sector 1800 1820 1840 1860 1880 1900 1920 1940 1960 1980 2000 2020 Health & Social Assist Arts & Recreation Personal & Other Serv 2050

New Age Industries 1965 – 2040 s+ Household Outsourcing v v v v v New Age Industries 1965 – 2040 s+ Household Outsourcing v v v v v Hospitality (meals, accommodation) Entertainment (clubs, casinos) Household services (everything!) Personal services (beauty, fitness) Health (everything!) Tourism (transport, agencies) Education (pre-school, tertiary) services) Child minding (pre-school, nanny services) Finances (advice, management) Other services (inc. unmentionables) Overseas Outsourcing (To Us) v v v v Mining (energy minerals) Tourism (inbound) New era in agriculture? Education (mainly tertiary) Health Aquaculture (& crustaceans) Manufacturing (smelted ores) IP (royalty arrangements) Business Outsourcing v v v v v Trucking Facilities management Business services (A/C. legal, computing) Knowledge services (data, consulting) Cleaning. Catering HR services (recruitment, staffing). Security Call Centres/CRM services Operations (via franchising) New Enabling Utilities (& technologies) v v v ICT Nanotechnology Biotechnology Just-in-time systems Self-service systems IBISWorld

3. The Operating Environments The Marketplace Labour Services Finance Government Goods & Materials 33 3. The Operating Environments The Marketplace Labour Services Finance Government Goods & Materials 33 Suncorp Bank Business Leader Conference April 2015

The Marketplace The Marketplace

The Marketplace for Suncorp Bank consists of Households & Individuals, Corporations and Government. Income The Marketplace for Suncorp Bank consists of Households & Individuals, Corporations and Government. Income is derived from interest spreads (loans and deposits), service & transaction fees, and advice. With total revenue around $200 billion in 2015. The indebtedness in Australia in F 2015 is expected to be $4 trillion: Households Corporations Government $2. 20 trillion $1. 30 trillion $0. 45 trillion

Bank Market Segments Revenue based 2014 -15 (E) Households 58. 7% Private Clients 4. Bank Market Segments Revenue based 2014 -15 (E) Households 58. 7% Private Clients 4. 3% Corporations 35. 7% Other 1. 3% (Government, NFP & Financial Institutions) IBISWorld 16/04/15

The Labour Environment The Labour Environment

Our Changing Labour force In The New Age v v v v Higher participation Our Changing Labour force In The New Age v v v v Higher participation rate v More part-time/casual work v Partial working from home v Same lifetime working hours v More years, less hours per year v Rising wages & salaries v More working seasons in a life v New industries & occupations v Lifetime education & training New locations of employment v v Rise of contractualism Payment for outputs not inputs v v Rise of business ownership Rise of franchising v Importance of married women Women as entrepreneurs Women as directors Knowledge worker concept Work in a borderless world More international jobs Shallower career-ladders Demise of overt discrimination Demise of fixed retirement age Demise of “employee” concept Demise of trade unionism Demise of employer chambers Lesser role of formal arbitration

Unemployment in Australia Annual, 1890 -2015 Full employment prevails for 60% of each century Unemployment in Australia Annual, 1890 -2015 Full employment prevails for 60% of each century Forecast Year, ended December Depression Full Employment defined as < 5% Elongated “depression” Source: ABS 16/04/15

Where The Money Is By Industry Full-Time Total Adult Earnings December 2014 ($’ 000) Where The Money Is By Industry Full-Time Total Adult Earnings December 2014 ($’ 000) All Industries Total employed 11. 6 million Wages ($’ 000) ABS: 16/04/15

Australia’s New & Lost Jobs By Industry 5 years to December 2014 es tru Australia’s New & Lost Jobs By Industry 5 years to December 2014 es tru ct io n Uti % 1. 9 Media/Telcos Co ns 8% 4. 3% 2. 5% ail Ret 0% 7. 22. 3% The nation created over 7 times more new jobs than it lost liti 6. 7% % ther 2. 9 tion a ecre &R /O Persona Arts Health Mining Agriculture 4. 6% Transport/Postal rt 6. 6% Govt. /Safety % 7. 9 tion Prof. & Tech Services . 8% g rin Housing tu fac u (investment) an M 48 uppo in. S uca ns Rea l Es 17. 7% Adm Ed tal/ t 1. 3% H p os ita 11. 9% Wholesale Trade 31% 1 3. 8 % R. 6% Fin. &I en . 2% 9 lity Share of total basis New jobs 948, 100 Net new jobs 813, 700 Lost jobs 134, 400 Sources: ABS. IBISWorld, 20/03/15

Australia’s Likely New & Lost Jobs tion Po sta l struc or t/ Con Australia’s Likely New & Lost Jobs tion Po sta l struc or t/ Con % Tr % an 2. 2 7. 0 17. 9% Share of total basis W’Sale 1. 3% Retail 1. 4% sp rn. Health 1. 7% ec &R 6. 7% 3. 8% ts Ar Persona/ Other Services Utilities By Industry 5 years to F 2019 os elc a/T di Ins Me n. & % Fi 2. 8 3. 1% eal Est Rental/ R 3. 4% ality ospit Manufg. Mining 15% % Prof. & Tech Services 7. 1 on ati uc Ed 26% 59%. 10. 7% H Agric 23. 0% 7. 9% Govt Admin. & Safety New jobs 845, 000 Net new jobs 764, 000 Lost jobs 81, 000 Sources: ABS. IBISWorld, 02/07/14

The Services Environment The Services Environment

The New Age Virtual Corporation Traditional Structure New Structure Multi-layered Corporation Virtual Corporation Board, The New Age Virtual Corporation Traditional Structure New Structure Multi-layered Corporation Virtual Corporation Board, CEO and Top Management Head Office functions Middle Management Supervisors & Employees Mostly outsourced Implementers No Longer Mostly outsourced Required Coordinators & Operatives No Longer Required Mostly outsourced and /or franchised Functions provided back to company by firms in new (specialised) industries (e. g IT, personnel, legal, accounting, information, transport, cleaning etc. )

Business Outsourcing in the New Age Trucking v Road transport industry. Cleaning v v Business Outsourcing in the New Age Trucking v Road transport industry. Cleaning v v Office, factory, hotel etc. Laundry, work clothes. Canteens, Dining Rooms v Caterers. Maintenance v v v Painting. Engineering. Carpentry. Contract Mining Security v Security systems. v Surveillance services Personnel v v v Recruitment. Out placement. Training. Reception v Serviced offices. Accounting v v v Payroll, Invoicing, Share Registers Full contract accounting. Superannuation administration. Computing (ICT) v v v Software development & writing. Computer services (IT outsourcing) Cloud computing Property v v Property trusts, Property management Marketing v v Advertising, media buying Call Centres Distribution v Warehousing & Delivery Information & Planning v v Database services Strategic and Other Consulting Other v v Franchising Other functions and activities

The Finance Environment The Finance Environment

10 -year Government Bond Rate 1863 -2015 Average 1863 -2014: 5. 6% IBISWorld 06/01/15 10 -year Government Bond Rate 1863 -2015 Average 1863 -2014: 5. 6% IBISWorld 06/01/15

Indicator Lending Rates Australia F 1975 -2015 Interest Rate (%) Credit Cards Overdraft (small Indicator Lending Rates Australia F 1975 -2015 Interest Rate (%) Credit Cards Overdraft (small business, variable) Mortgage (standard bank) Year, ended June Source: IBISWorld/Reserve Bank

The All Ordinaries To 2015 (April) nd All Ordinaries Index Tre Actual Year, ended The All Ordinaries To 2015 (April) nd All Ordinaries Index Tre Actual Year, ended June IBISWorld/ASX 16/04/15

The Government Environment The Government Environment

Government Actions Needed And are they now being addressed? (Yes/No) 1. Balanced budgets, the Government Actions Needed And are they now being addressed? (Yes/No) 1. Balanced budgets, the first rule of good government No 2. Tax reform that includes GST and shifts taxes to spending Yes/No 3. IR reform that understands work and workers in the New Age No 4. Innovation, IP and productivity; and how to get them. No 5. Fully embrace the digital era for international competitiveness. No 6. Long range vision, especially our role in the Asia Pacific region Yes/No 7. Reduce subsidies going to yesterday’s industries that won’t survive Yes 8. Privatization of low-productivity government activities. Yes/No 9. Rational energy policy that includes carbon, nuclear power. No 10. Developing the top part of our continent (especially top ⅓) Yes/No

Australian Taxation All taxes % of GDP F 1960 -2015(E) We are now under-taxed Australian Taxation All taxes % of GDP F 1960 -2015(E) We are now under-taxed by historical & global comparison Australia has the second lowest taxes in the OECD; nearly 9% of GDP lower than the OECD average of 37% of GDP Our GST rate at 10% (with exemptions) compares with 18% in the OECD Source: ABS: 52066 -19 14/04/15

Government Budget Balances % of GDP basis F 1960 -2015(E) Federal Government Budget balance Government Budget Balances % of GDP basis F 1960 -2015(E) Federal Government Budget balance % of GDP All Governments The ALP tends to run deficits more than the Coalition Year, ended June Source: ABS 09/03/15

GST (VAT) Tax Rates 2014 Maximum Some states Tax Rate (%) Source: IBISWorld GST (VAT) Tax Rates 2014 Maximum Some states Tax Rate (%) Source: IBISWorld

Government Net Debt 2015(F) Largest nations (+ Greece) % of GDP Zero in 2007 Government Net Debt 2015(F) Largest nations (+ Greece) % of GDP Zero in 2007 thanks to the Howard/Costello government Trouble Serious trouble Diabolical trouble IBISWorld 05/04/15

4. Suncorp Bank’s Industry 56 Suncorp Bank Business Leader Conference April 2015 4. Suncorp Bank’s Industry 56 Suncorp Bank Business Leader Conference April 2015

Finance & Insurance Lifecycle Value added as % of GDP 62 Finance 63 Insurance Finance & Insurance Lifecycle Value added as % of GDP 62 Finance 63 Insurance & Super Funds 64 Auxillary Finance and Insurance Services F 2015 Revenue ($bn) 855 Businesses (‘ 000) 78 Employment (‘ 000) 404 IBISWorld 07/01/15

Financial Institutions & Corporations Australia Revenue F 2014 % of total Others 2. 4% Financial Institutions & Corporations Australia Revenue F 2014 % of total Others 2. 4% Invest. Advisors Mortgage Brokers Adm. Serv. Ins. Brokers 3. 4% Funds Management Super 1. 6% Other 0. 6% 0. 2% 1. 1% 1. 5% Banks 25. 1% Super Funds 44. 3% 1. 2% In Life Ins. Note : 1. Build. Soc. , CUs, Friendly Soc. 6% 8. 5% Banks 25% NBFIs 14% Funds 54% Services 6% 7. $778 billion Ge su ner ra al nc e 2. 5% Central Bank 0. 4% Invest. Banking 1. 2% MMCs, 0. 8% Co-operatives 1 0. 6% Fin. C Hea os & lth GFs Ins . Sec. vehicles 1. 25 Trusts 1. 1% Source: IBISWorld 15/03/14

Financial Institutions & Corporations Australia Total Assets, 2014 (E) % of total $ 6. Financial Institutions & Corporations Australia Total Assets, 2014 (E) % of total $ 6. 44 trillion Banks NBFIs Funds Super 54% 6% 40% Funds 29. 0% Banks ns. I Life RBA 2. 2 % 1. 1 % % Co-o 0. 6% Note: 1. CUs (0. 6%), BS (0. 4%), Friendly Soc (0. 1%). ps 1 2. 0 6% e Fin . C os . & MM GF Cs s nc 0. ra In su e ra nc su n. In Ge al 2. s 2% e cl hi Ve tio sa ti He Se s st u 0% 2. th i r cu 5% 4. Tr Unit Trusts 4. 1% CMTs 0. 3% Com. Funds 0. 1% n 51. 6% 4. 4% $ 6. 44 trillion Source: RBA/IBISWorld 25/10/14

Banks in Australia K 6221 Australia F 2015(E) Revenue $ 200 billion Growth, F Banks in Australia K 6221 Australia F 2015(E) Revenue $ 200 billion Growth, F 2015 -F 2020 (real) 3. 3% p. a (plus inflation c. 2. 5%) Value Added Businesses Outlets Employment (‘ 000) Wages $ 69. 7 billion (4. 4% of GDP) 68 c. 5605 177. 5 $ 23. 2 billion Key Players (F 2014 est. ) Westpac NAB CBA ANZ Macquarie Suncorp Bendigo 21. 8% 18. 0% 17. 3% 2. 4% 1. 7% 1. 6% ING Citicorp HSBC RABO Tokyo B of China 1. 2% 0. 9% 0. 7% 0. 5% 0. 3% 0. 2% Source: IBISWorld 16/02/15

5. Keys To Success 61 Suncorp Bank Business Leader Conference April 2015 5. Keys To Success 61 Suncorp Bank Business Leader Conference April 2015

Performance of Big Finance Corporations Enterprise 1. 2. 3. 4. 5. 6. 7. 8. Performance of Big Finance Corporations Enterprise 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. NAB CBA Westpac ANZ Suncorp Macquarie Bendigo ING Bank of Qld QBE AMP IAG Allianz Average Revenue ($ billn. ) 45. 3 44. 3 38. 6 35. 3 16. 4 10. 9 3. 2 2. 6 2. 3 22. 9 20. 1 12. 7 4. 8 Assets ($billn. ) 883. 3 791. 5 770. 8 772. 1 94. 4 153. 9 65. 1 49. 8 46. 9 53. 4 133. 3 29. 7 10. 2 ROSF 1 (%) 2014 11. 0 17. 5 15. 3 11. 1 5. 3 10. 6 7. 5 7. 7 7. 8 -2. 4 8. 2 18. 1 16. 8 10. 3 ROSF 1 (%) 5 Yr Ave 11. 0 16. 9 14. 8 11. 0 4. 1 8. 2 7. 0 7. 6 5. 5 7. 8 16. 2 9. 1 17. 1 10. 5 1. 2. Note 1 : Return on S/F, after tax Source: IBISWorld Employment (‘ 000) 42. 9 44. 3 33. 6 50. 3 14. 5 13. 9 4. 4 1. 0 n. a 15. 5 5. 7 n. a

The big financial corporations are, on average, not very profitable by finance industry standards The big financial corporations are, on average, not very profitable by finance industry standards in Australia (but compare reasonably well internationally). The finance & insurance companies in the Top 2000 earn around 27% ROSF and the 9 best earned 48% ROSF for the 5 years to 2013, but part of these results were boosted by the best superannuation companies and smaller niche players. The reasons for the average performance is partly the government “golden handcuffs” and partly the breach of several of the Keys To Success (as shown next).

What the Best Enterprises Are Doing 1. They stick to one business at a What the Best Enterprises Are Doing 1. They stick to one business at a time and do not diversify 2. They aim to dominate some segment (s) of their market 3. They are forever 4. They outsource 5. 6. 7. 8. 9. 10. 11. 12. innovative, valuing the business’ IP. non-core activities to enable growth. They don’t own “hard” assets. They have good and professional financial management. They plan from the outside-in not the inside-out They anticipate any new industry lifecycle changes. They follow world best practice for their own type of business. They develop strategic alliances. They develop unique organisational cultures. They value leadership first and management second.

To download this presentation go to: www. ibisworld. com. au ruthven suncorpbank Enter details To download this presentation go to: www. ibisworld. com. au ruthven suncorpbank Enter details here to download presentation

6. Appendix 66 Suncorp Bank Business Leader Conference April 2015 6. Appendix 66 Suncorp Bank Business Leader Conference April 2015

1. Stick To One Business At A Time In the New Age, specialisation is 1. Stick To One Business At A Time In the New Age, specialisation is critical being in just one of the nation’s 509 classes of industry. It is very difficult to reach world best practice in even one industry class these days. Growth is best sought geographically (regional, global) rather than through diversification. But yes, there are some exceptions.

2. Aiming To Dominate Something Secure a safe industry position in your chosen industry 2. Aiming To Dominate Something Secure a safe industry position in your chosen industry to be master-of one’s-own-destiny by dominating something. Domination can be of: the whole industry class (being a major); or v one category in the industry (a niche player); or v one product group 1 (an ultra-niche player); or v one product category ( a boutique operator)2. v Notes: 1 Or a customer segment; and occasionally a geographic area 2 Sometimes a symbiotic relationship between a supplier and customer(s) can provide a mutually beneficial relationship, usually at an industry share level below 0. 1% of the industry’s revenue

Industry Share Strategy (positioning for a winnable war) No-man’s-land (un-winnable position) Caught between nichers Industry Share Strategy (positioning for a winnable war) No-man’s-land (un-winnable position) Caught between nichers (“knee-cappers”) and ultra-niche players (“ankle-biters”) Niche Player 5% No-man’s-land 5 -25% No-man’s-land (un-winnable position) Caught between majors (“sledgehammers”) and niche players (“knee-cappers”) Ultra-niche specialist (1%) 1 -5 % Major Player 25 -751% A viable 0. 1% share could be termed “boutique” (very high priced product). Occasionally a symbiotic relationship between a supplier and customer(s) can provide a mutually beneficial relationship, usually at an industry share level below 0. 1% of the industry’s revenue. Source: IBISWorld

3. Being Forever Innovative (unique IP) Innovation involves the development and constant improvement in 3. Being Forever Innovative (unique IP) Innovation involves the development and constant improvement in intellectual property (IP). It can best be described as a “cocktail” of: • • skills, special competencies, unique systems; patents, trademarks & brands; organisational culture, customer relation protocols; vision, plans and documented achievable strategies. It is the "holy grail" of a enterprise, its core and its most valuable balance sheet asset, whether recorded as such in dollar terms or not.

11. Developing A Unique Culture A unique culture is about attracting and keeping good 11. Developing A Unique Culture A unique culture is about attracting and keeping good people to your business, and helping develop ordinary people into extraordinary people. This is built on a base of world best practice principles of human resources management. But a unique culture goes well beyond the basics: it needs to have special elements of both a tangible and intangible nature. No matter how often we say it, employees are not a firm’s most valuable asset, since slavery has been outlawed for some considerable time! But they can be “valued”, and a unique culture is vital to this goal.

12. Leadership involves more external focus than internal: the opposite of management. It is 12. Leadership involves more external focus than internal: the opposite of management. It is about direction, strategy and the means of getting there Leadership sits above management. It is, by nature, demanding of special attributes such as loneliness in ultimate decision making (after full consultation), with no voting. And, sometimes, no consensus. It is non-gender specific (unlike management which favours females in the New Age of service industries). Apart from listening to experts and confidantes, it involves communicating directly with major customers at least once a year.