Institutional - a message from Peter Hodgson
Peter Hodgson
Our Financial Performance
| ($m) | 2006 | 2007 | % |
|---|---|---|---|
| Income | 3,502 | 3,256 | 8% |
| Operating Expenses | (1,378) | (1,256) | 10% |
| Profit before Provisions | 2,124 | 2,000 | 6% |
| Provisions1 | (69) | (58) | 19% |
| Tax | (607) | (579) | 5% |
| Profit after Tax | 1,448 | 1,363 | 6% |
| Cost to Income(CTI) | 39.3% | 38.6 | - |
| Staff(FTE) | 5,225 | 4,915 | 6% |
Earnings by business3
58% Working Capital
20% Markets
18% Business Banking
15% Corporate Finance
Institutional serves more than 40,000 business, corporate and institutional clients worldwide. We do this through the CEO Agenda - building partnerships with our clients - and the Owner Agenda, working with private companies and small business owners.
This year we have strived to give our clients understanding, delivery and commitment, and the results of the 2007 Peter Lee Associates Large Corporate and Institutional Relationship Banking survey show our progress. We retained our No. 1 Relationship Bank status for the second consecutive year, and our share of lead bank relationships remained steady at 37%. We also won the categories 'Most Trusted Advisor', 'Knowing the Company's Industry Best' and 'Providing Creative Ideas and Solutions'.
These solutions include new products like trading in renewable energy and carbon certificates, ASPRIT, which enables wholesale investors to benefit from the performance of companies considered sustainability leaders, and the Business Equity Fund, which provides an opportunity to co-invest alongside ANZ's Private Equity business.
Institutional had a mixed year in 2007. Income growth of 8% was below Group average and at the bottom of the target range (7% to 10%). A large credit recovery in the first half helped drive more acceptable profit of $1,448 million, up 6%. Given the strength of our franchise, we believe this Division is capable of better performance, and we anticipate stronger results in 2008.
2 Includes -11% for 'other'