In today’s market update, we got a glimpse of the banks intentions under CEO Brian Hartzer. They are looking to add more than 1 million new customers (2015-17), and increase the number of products per customer. There is a strong focus on digital transformation, including the development of a customer service hub which links multiple systems to create a single view of a customer; as well more revamped branches, with 55% of the network changed by 2018. The aim is to drive the expense to income ratio below 40% within 3 years, reducing the groups expense growth run-rate to 2-3% per annum.
They plan to lift investment by $200m to $1.1 billion which is directed to growth, service and efficiency initiatives, focussing on digital, simplification and customer service.
They reaffirmed a target ROE of more than 15%.
Nothing wrong with in intent, but the question will be excellence of execution.
No further disclosure on current banking performance. We think a close eye on the performance of the investment mortgage book is warranted given current market dynamics.
