Wednesday, 28 September 2005

A comprehensive plan to stabilise and rebuild the NAB's Australian business was outlined in a market update by the Executive Director and Chief Executive of the National's Australian operations, Mr Ahmed Fahour.

"We are half-way through a three year turnaround," Mr Fahour said. "We have the right people in place and they are focused on the right things. We have broadly stabilised the business and are now embarking on the rebuilding phase."

Highlights of the briefing include a three year plan to:

•  release new products and improve customer service in Australia
•  complete the integration and restructuring of the Australian  businesses
•  invest $1.8 billion in rebuilding the Australian business, and
•  having regard to the $1.8 billion investment, keep underlying cost growth in the Australian business under 3% per annum

Four key priorities for the next three years include:

Helping our customers fulfil their aspirations

"We have a clear purpose: to help our customers fulfil their aspirations," Mr Fahour said. "We are freeing up our people to achieve this, by simplifying processes and policies.

"We are also committed to reinvesting in skills and capability development, including new quality management approaches and systems that improve both the employee and customer experience.

"We will continue to launch market-leading, customer-focused products.  New products such as the Business Cash Maximiser, Personal Project Loan and iSaver Account have been launched recently."
 

Rebuilding critical infrastructure

"As announced in May, we are also reinvesting $1.8 billion over three years in rebuilding the business," Mr Fahour said.

"This will go to product and service innovation, building infrastructure, and compliance/regulatory issues.

"In 2006 and beyond, the investment mix will shift towards projects that give us bottom line returns and rejuvenate our systems and infrastructure. This includes investments in our Retail branch network, re-engineering of our lending processes and building new products and services for our customers."

Becoming cost-competitive

"We are still inefficient compared to best practice," Mr Fahour said. "We intend to keep underlying cost growth under 3% per annum on average over the next three years."

Early gains have been achieved through a number of initiatives including the integration of support functions across the business, cancellation of low-value projects and reduction in the use of consultants.

The 1000 job reductions announced in May have been completed.

Longer-term, value-adding initiatives include process re-engineering to free up capacity, simplification of technology architecture and rationalisation of suppliers. We will 'right-source' to ensure functions are performed in-house or externally in Australia or overseas as appropriate and this will mean another 1000 job reductions over the next two years, as announced in May.

Managing our portfolio of businesses

"Each of the NAB's business units is at a different starting position, and each has a plan to become truly competitive," Mr Fahour said.

Business & Private Banking:

Business and Private is very strongly positioned. Features of the growth strategy include:

• Further specialisation in specific industry groups;
• Greater banker empowerment and authority;
• Cross-sell into transaction banking and wealth management.

Retail Banking:

The Retail business faces reinvigorated incumbents and a raft of new competitors. A major improvement program will include:

• Re-investment and training for sales and service;
• Re-investing in and upgrading our branches;
• Profit and Loss accountability to be managed by new local area markets;
• Increased sales capabilities to be put back into major outlets.
   
  

Wealth Management:

The Wealth Management business enjoys a strong brand and market position. There will be a strong focus on:

•  Improving service levels;
• Revitalising the 'manager of managers' platform;
• Investment in product innovation;
• Cross-sell into the bank channel.

These plans will ensure the Wealth Management business participates in the exciting growth opportunities available to it.

For further information:

Geoff Lynch
Head of Media Relations Australia
03 8634 1564 work
0405 319 819 mobile 

Hany Messieh
Group Manager, Investor Relations
03 8641 2312 work
0414 446 876 mobile
 
Samantha Evans
External Relations Manager
03 8641 4982 work
0404 883 509 mobile
 

Mr Fahour's full strategy presentation is available on www.nabgroup.com and www.nab.com.au.

Click here to view a live web cast of the Australian Investor Briefing or to download a copy of the Australian Investor Briefing presentation.

DISCLAIMER

This statement contains certain "forward-looking statements" within the meaning of Section 21E of the US Securities Exchange Act of 1934 and the US Private Securities Litigation Reform Act of 1995.  The words "anticipate", "believe", "expect", "project", "estimate", "likely", "intend", "should", "could", "may", "target", "plan" and other similar expressions are intended to identify forward-looking statements.  Indications of and guidance on future earnings and financial position and performance are also forward-looking statements.  Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of the Group, that may cause actual results to differ materially from those expressed or implied in such statements.  There can be no assurance that actual outcomes will not differ materially from these statements.  For further information relating to the identification of forward-looking statements and important factors that could cause actual results to differ materially from those projected in such statements, see "Presentation of Information - Forward-Looking Statements" and "Risk Factors" in the Group's Annual Report on Form 20-F filed with the US Securities & Exchange Commission.

* The information contained in this media release is for media advice purposes only. The contents are true and correct at time of publishing/issuing, however may change over time. For further information about NAB products or rates, please go to Interest Rates, Fees & Charges