Message from the Chief Executive Officer
This 2005 fiscal year has been another great year for the Bank and it has once again been a privilege to work alongside our people serving our customers and providing our shareholders with another year of solid returns.
The Bank starts the current year in a stronger position based on an improved and improving value proposition for our customers. The fact that nearly half of Australians have a financial relationship with the Bank attests to the enormous strength of our brand and the commitment we have made over the years to building our infrastructure and the service culture needed to meet the needs of our customers.
The Which new Bank transformation is just one example of the extent to which we are prepared to go to ensure that we maintain our compelling service proposition. Over the three years of the program, which commenced in 2003, we will have invested almost $1.5 billion in a wide range of initiatives designed to transform the way our people work with our customers to enable them to realise their expectations. Two years in, I am pleased to report that we have achieved all our significant milestones for 2005 with net benefits totalling $724 million and are on track to achieve the 2006 milestones in the third and final year. Over the past 12 months, the Bank has made significant progress in our three main streams of work – customer service, engaged people and simpler processes:
Customer Service
- We have been able to measure the success of the program by improved customer survey scores and positive feedback from our customers. These improvements have, in turn, driven increased market shares, better financial performance and record dividend payments.
- The implementation of a new information system, which commenced nationally in April 2005, is enabling our staff to have a single view of our customers’ dealings with us, to record details of each interaction we have with them, to efficiently refer customers to specialists across the Bank.
- A total of 127 branches have been refurbished this year, bringing the total number of refurbished and modernised branches to 252. Customers have welcomed the new branch environment and the significant reduction in queue time, with the majority of our branches now serving customers within two minutes.
- In June 2005, the Bank launched NetBank Saver, an internet deposit savings account that offers our customers a high interest rate, no bank fees, and facilities to instantly transfer funds to and from the linked Streamline account available 24 hours a day, seven days a week.
Engaged People
- 300 senior leaders of the Bank have completed an upgraded leadership development programme, which provides them with a common understanding of the Bank’s approach to leadership and encourages desired behaviours that underpin our cultural transformation.
- Over 27,000 staff have completed training to be able to apply common service and sales principles in their everyday work. Recent scores from internal and independent surveys have reaffirmed that our people are more engaged than ever. Results indicate that our people have a clear understanding of the Bank’s customer service vision, know where the Bank is heading, and agree that the Bank has an environment where ideas and knowledge are shared freely.
Simpler Processes
- Customers are benefiting from the improved turn around times we are achieving through the implementation of a culture of continuous improvement. Already, customers are receiving quicker credit decisions for home loans and personal loans and further service improvements will follow from a number of additional processes which are now being simplified.
- In April 2005, the Bank introduced the new NetBank platform providing enhanced services and greater flexibility for our two million on line customers. Improvements include simpler processes when transferring money or making multiple payments, better and real-time access to transaction information and improved technology that provides our customers with the highest level of security.
Offshore Developments
Internationally, we are focussing on countries in Asia whose economies are growing and whose large populations have rapidly rising incomes.
The Bank has made two strategic investments in China. In September 2004, it entered into a strategic co-operation agreement with Jinan City Commercial Bank (‘JNCCB’). Approval by the China Banking Regulatory Commission has been obtained to purchase an 11 percent shareholding in JNCCB, with options to increase this to 20 percent at a later stage. In April 2005, the Bank entered into its second strategic co-operation agreement, this time with Hangzhou City Commercial Bank (‘HZCCB’) and subject to approval by the China Banking Regulatory Commission, it plans to purchase a 19.9 percent shareholding in HZCCB. An important component of these initiatives is to provide these organisations with access to our banking capabilities which will significantly enhance their performance and provide them with the skills they need to meet the increasingly sophisticated needs of their local customers.
The Bank is also investigating development opportunities in other Asian countries. In June 2005, the Bank obtained approval from the Reserve Bank of India to establish a Representation Office in Bangalore.
CEO Transition
In June this year, the Bank announced that I will be retiring and that Ralph Norris had been appointed Chief Executive Officer. Subsequently, we have announced that I will be leaving the Bank on 22 September and that Ralph Norris will take up the position from the close of business on that date. This, therefore, will be my last message to you.
During the past thirteen years as Chief Executive Officer, I have been proud to lead the Bank through a number of significant achievements, including full privatisation, integration of State Bank of Victoria and merger with Colonial Limited.
When we announced Which new Bank, I said that this would be the biggest programme that the Bank had undertaken since privatisation.Over the past two years, I have felt among our people a growing passion and enthusiasm for the direction in which the Bank is heading. They have enthusiastically embraced the Which new Bank vision and are committed to delivering a better service for our customers. The exceptional outcomes we have achieved, both domestically and internationally, have been made possible only by the dedication and commitment of our people.
As Chief Executive Officer, I have indeed been fortunate in the encouragement and counsel I have received from the Board. I would also like to take this opportunity to thank my Executive Team and all our people for their support and commitment to our customers and to thank Shareholders for their continuing loyalty to the Bank and their confidence in its future. I am confident that Ralph will successfully build on the momentum which exists within the Bank and will enjoy the same level of support which I have had during my tenure as Chief Executive of the Bank.
David Murray
Managing Director and Chief Executive Officer
10 August 2005