Annual Review 2015

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Priority segment focus

In a low growth environment with intense competition, we are concentrating resources on NAB’s priority customer segments within Australia and New Zealand.

Within the Australia and New Zealand markets, we are focused on the customer segments that are most attractive and where we are best positioned to compete, taking into account factors such as segment size, return on equity and growth rates, as well as our market share, capabilities and performance.

Within the business banking market, we are most focused on the micro, small and medium business customer segments27. As the leader in business lending in Australia28 and with the second largest business banking market share in New Zealand29, NAB is strongly positioned to compete in these segments, particularly in the agriculture and health industries.

Personal Banking also remains a priority focus for us, particularly the mortgage and debt free customer segments. NAB’s strong competitive capabilities in these segments have enabled us to grow our share over the past five years.

We are actively reweighting resources towards parts of the business that support the priority segments to strengthen our capabilities and deepen our relationships with customers. In FY15, this included:

Increasing the share of Australian Banking operational expenditure and number of full time equivalent employees dedicated to priority segments.

Hiring more frontline bankers to serve priority segment customers.

Increasing marketing spend, targeting our priority segments.

Re-focusing major projects and initiatives towards priority segments.

To allow greater focus on our Australia and New Zealand customers, we are addressing some low returning and legacy assets. In FY15, we:

Completed a full divestment of Great Western Bancorp, Inc.

Sold a £1.2 billion parcel of higher risk loans from our UK Commercial Real Estate portfolio.

Reduced the size of our Specialised Group Assets portfolio from $4.1 billion to $2.1 billion in risk weighted assets.

Committed to fully divesting our Clydesdale Bank and Yorkshire Bank operations through a demerger and IPO in February 2016.

Released $0.5 billion of CET1 capital by entering into a major life reinsurance agreement.

On 28 October 2015, NAB announced it has entered into an agreement to sell 80% of NAB Wealth’s life insurance business to Nippon Life Insurance Company for $2.4 billion, while NAB will retain the remaining 20%.

Customer experience

As we face into the challenges and opportunities brought about by digital transformation and the external environment in which we operate, NAB understands that delivering a great experience for our customers is critical to success in our priority segments.

We have developed a clear and standard definition of how we want NAB to be experienced by our customers. These are to be easy to deal with, to be personal in all our dealings and to support our customers with advice and insight. We know that this is easy to say and hard to deliver. To make this come to life, we have focused on:

Making it simple for customers.

Deepening our relationships with customers.

Innovating for customers.

Making it simple for customers

We made significant progress in making our services simpler and easier for customers by reducing customer pain points.

In FY15, we improved the customer experience across a range of financial products by simplifying our policies, processes, products and technology. As a result, approximately 500,000 customers’ sales and service experiences per annum have been improved.

These improvements included:

Improving the turn-around times for customers making simple variations to their mortgages.

Reducing the time we take to approve simple business loans.

Reducing the paper work we require from customers applying for simple business loans, equipment finance and commercial cards.

Deepening our relationships with customers

Our aim is to build deep, long lasting and personal relationships with our customers. We seek to meet more of our customers’ banking and wealth needs and become their main financial provider.

NAB continued to improve customer experiences by strengthening its network of skilled bankers, including recruiting additional business banking relationship managers and mobile bankers. A professional training program was implemented for our business bankers, along with NAB View, an improved customer information tool to better equip bankers with insights into specific customer needs.

We adopted the Net Promoter System (NPS) to measure customer advocacy and improve our understanding of how we can deliver a better customer experience for our priority segments.

Priority Segments NPS vs peers30



Peer 1

Peer 2

Peer 3

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Mar 15





Sep 15





Innovating for customers

We are focused on innovating to deliver great customer experiences and support our customers. An example of this is the NAB Village at Docklands in Melbourne. NAB Village is an innovative space that we provide for our business customers and community partners to connect with clients, work between meetings and learn from each other. Its value to customers is demonstrated by the fact that over 25% of members have started a banking relationship with NAB in order to access NAB Village.

During FY15, we continued to invest in and improve our internet banking and mobile application services. We also delivered new innovative solutions such as enabling our small business customers to link their internet banking directly into their Xero online accounting package.

We recently announced the launch of NAB Prosper, which will provide customers with an affordable online option for simple wealth advice. We also announced an additional investment of at least $300 million over the next four years in our NAB Wealth superannuation, platforms, advice and asset management business, which will allow us to deliver a great customer experience while driving a closer relationship between our banking and wealth businesses.

NAB Labs, an innovation hub, was established to drive innovation and customer-led design. NAB Ventures, a $50 million innovation fund, will enable us to access leading ideas and capabilities through investments in innovative companies globally.

With the support of the Clean Energy Finance Corporation, we launched a $120 million funding program to provide our business customers with discounted financing for energy efficiency or generating renewable energy. This will help our customers better manage their energy usage and expenses.

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