Message from the Chief Executive Officer
David Murray
Chief Executive Officer
In September 2003 we announced our Which new Bank strategic initiative to support our vision "to excel in customer service". Over three years we will be investing approximately $1.5 billion. We have already generated pre tax benefits of $237 million in 2004, and have committed to growing these benefits to $900 million per annum in 2006 and beyond.
In our first nine months of the Which new Bank program we have delivered within planned investment and the benefits have exceeded our target by $37 million. Measurable progress has been made in all key customer, people and process initiatives that are fundamental to this stage of the program. Market shares across key lines of business remained broadly stable during this time.
In addition to having the most recognised financial services brand in Australia, the Commonwealth Bank is also the most accessible Australian bank with the largest network of over 1,000 branches, the largest ATM and EFTPOS networks in the nation and online facilities through NetBank and CommSec. Successful execution of the Which new Bank program will differentiate us further from our competitors, putting our people at the heart of superior service.
The Chairman, in his outlook statement, describes the expected benefits resulting from embarking on the Which new Bank program. These focus on targeted growth in EPS, in profitable market share and in dividends as well as on improvements in productivity.
Which new Bank is about changing the way we do things. Our people's willingness to change, their enthusiasm for the task ahead and their service commitment to our customers are the main drivers of the good progress of Which new Bank to date.
Initiatives already undertaken include customer-tailored staff training and the redevelopment of incentive, award and recognition programs. We are actively encouraging learning and innovation, striving to achieve a workplace environment for empowered people, who work within a framework of trust and teamwork, with a focus on business outcomes.
We have taken care to collect feedback from our people on how they feel about the Which new Bank initiatives. An overwhelming majority understand why the Bank needs Which new Bank, feel well informed and positive about it and believe it will help them do their job better. We acknowledge that there is still more to be done to maintain and grow this view further in the Bank.
Which new Bank consists of 20 workstreams and over 100 initiatives. All of the workstream activities to June 2004 were completed as planned.
Examples of progress achieved under Which new Bank during the year include the following:- Refurbishment of 125 branches to a modern layout;
- Training of more than 13,000 staff in service and sales management;
- Implementation of world class processing principles in several operations areas, viewing processes from the customer's perspective;
- Launch of the CommSee customer relationship management information prototype in Tasmania;
- Establishment of the Centre for Adviser Development to train financial planners;
- The business banking redesign, to free up sales people to spend more time with clients; and
- Introduction of the enhanced FirstChoice investment product, including 12 new investment options.
Which new Bank is about viewing processes from the customer's perspective and keeping processes simple. This includes aligning head office functions to support customer-facing areas. To support sustainable process change, an emphasis on training and continuous improvement is built in.
It is pleasing in these early days of the Which new Bank program that customers are noticing the Bank is improving in the way we serve them. Strength of relationship measures between the Bank and its customers rose markedly in the first quarter of the year and this has been sustained, confirming Which new Bank has already started to make a difference.
We are where we need to be at this point in the reinvention of the Bank. This reinvention is designed to set the Commonwealth Bank apart from others. We are pleased with the Bank's result for 2004 and with our successful delivery of the year's Which new Bank initiatives. These results demonstrate our ability to execute well and give us additional enthusiasm for the next phase of Which new Bank.
I would like to thank all our people for their commitment to achieving this year's result for our customers and shareholders.
David Murray
Chief Executive Officer