Key Performance Indicators - Financial Services Royal

KPIs n2BBUSINESS BANKING

Key Performance Indicators FY17Regional Sales Manager

ankwest WBUSINESS, COMMERCIAL, CORPORATE, PROPERTY AND RURAL & REGIONALFOR BUSINESS

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Why does having good performance objectives matter?They ensure everyone is clear on what we are doing and how we are getting thereThey drive alignment to strategic agenda, aligning both culture and capability, within business andacross the wider BankThey provide leaders with a tool to set clear expectations with colleagues and enable them toproactively manage performance

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And what are we doing differently this year?Bankwest is simplifying the process by having only 3 ratings instead of 5 as latter createsambiguity. Measures of achievement for each rating band is also clearer.

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Embedding a Values Based Performance framework and create a performance environment wherewe can give our best, be developed and speak up on behaviours we see every day that supportsus to achieve our Vision

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bankwest #FOR BUSINESS

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Our goal - 20% revenue growth by 2020To be the best regional bank by delivering what matters to our customers

VisionWe will do this by delivering a simple & easy proposition to our target market segments

o nKeySegments Commercial Rural & RegionalBusiness CorporatePropertySmall Business

Growth Segment(disproportionate investment)

Core Segments(continue to improve processes & deliver outstanding service)

Real. Easy. Value.We make banking easier by knowing your business, not just your banking.

Simplicity

ValueProposition

C ustomer Experience S ustainable Growth People & Culture• Utilise Cashflow lending to diversify our

book - with additional focus on nichesectors

• Deepen relationships to increase MFi• Use merchantoffering to build out&

broaden client base• Digitatproduct ottering• Access to Broker channel• Risk guidelines and stronger relationship

with risk team

• Continued investment in capabilitydevelopment (credit, cashflowlending, specia/istproducts, sales.)

• Continue talent programs (emergingleaders & rising stars)

• Launch ignite!

• Simplification of product suite• Continue to embed operating rhythm to

achieve silver accreditation• Lean wilt drive key productivity improvemet

& improve on customer & colleagueexperience (e.g. Xfit& Odyssey)

• Utilise Middle Office telephony & emaltintercept

• DeNovo Smalt Business CustomerExperience

• Leverage the retait network to buildMFi & the Small Business base

• Utilise MC2 to drive efficiency &advocacy

StrategicPriorities


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Top 3 things Business Banking will focus on in FY17 to achieveour strategy• • •

1. Deliver MFICustomer Growth 2. Achieve Portfolio

Diversification 3. Maintain RiskKRI's• Data Quality (related to

your CCF results)• Pro-active loan account

management e.g. keepon top of annual reviewsand expired facilitiesrelated to your CQR andCPAresults)

• Deepening relationshipswith existing customers todrive cross-sell &retention

• Pro-active pipelinemanagement to buildcore business lending

• Acquiring non-propertycentric customers anddiversifying into cash-flowlending

• Support and drive growthon our target industriesby having a strongreferral process, buildingkey alliances with thirdparties to provide leadsand the appropriate creditpolicies that supportsgrowth


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Key Performance Indicators you will be measured on in FY17 • • •

Drive customer advocacyby delivering

exceptional experiences

Simptify what we do to makethings easier for our people and

our customers iiJ {

t Achievement ofBusiness BankingStrategic Goals

People & CultureMake Bankwest a great

place to work, where youcan speak up and

be yourself

Strategic AgendaDeliver FY17 - Bankwest

Strategic Agenda(BBLT and

selected roles only) J

1f1

f1

Sustainable GrowthDeliver financial performance in a risk

aware and sustainable manner being fully_ compliant with Risk Appetite ^' Statement (RAS)

rr

bankwestFOR BUSINESS

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How you will be measured... Sustainable GrowthKPI Deliver financial performance in a risk aware and sustainable manner being fully compliant with Risk Appetite

Statement (RAS)

BelowExpectations

MeetsExpectations

AboveExpectationsMetric

Business Banking NPAT - 10% <100% to target 100%-105% to target >105% to target

Method ofMeasurement

State Profit After Capital Charge(PACC) -10% <100% to target 100%-105% to target >105% to target

Region Total Revenue - 20% <100% to target 100%-105% to target >105% to target

Region Total Lending Growth(Business and Home Loans) - 10%

*<100% to target 100%-105% to target >105% to target

Weight 50% * Gate Opener: Must achieve Regional Direct Drawdown target.

Key Results Area (KRA) Shareholders

Strategic Priority Sustainable Growth


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How you will be measured... Customer ExperienceKPI Drive customer advocacy by delivering exceptional experiences

BelowExpectations

MeetsExpectations


Business DBM MFI Advocacy Score (Mean) - 10% Below Target Meets Target Above TargetMethod ofMeasurement Retail Roy Morgan MFI Advocacy Score (Mean) - 10% Below Target Meets Target Above Target

Business We’re Listening Program Advocacy Score(Mean) - Region -10% Below Target Meets Target Above Target*

Weight 30% * Gate opener: Minimum % of customers to be surveyed, refer todefinitions documentKey Results Area (KRA) Customer

Strategic Priority Customer Experience


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How you will be measured... SimplicityKPI Simplify what we do to make things easier for our people and our customers

BelowExpectations

MeetsExpectations


100% of customers have an up-to-date qualityCAP. Leaders must assess quality regularly viaIWIEs. Leaders measured on their teamsachieving their target

Client ActionPlans (CAPs)

Less than 100% of customers have anup-to-date quality CAP N/A

Method ofMeasurement Continuous

Improvements(CIs)

No CIs are implemented that providea quantifiable benefit for the customeror the business

Implement 1 CI that provides a quantifiablebenefit for the customer or the business. Leadersmeasured on their teams achieving their target

2 or more CIsimplemented

Silver Accreditation not started (WA) Silver Accreditation in progress (WA) Achieve SilverAccreditationProductivity Bronze Accreditation lost (Other

Divisions)Maintain Bronze Accreditation (Other Divisions)

Weight 10%

Key Results Area (KRA) Shareholders

Strategic Priority Simplicity


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How you will be measured... People & CultureKPI Make Bankwest a great place to work, where you can speak up and be yourself

BelowExpectations

MeetsExpectations


People Engagement Score Below Best in Class Best in Class Above Best in Class

Voluntary Staff Turnover* >25% 25% <25%

MOR Reviews* No meetings 1 meeting for each staff by 30 June N/A

Performance Reviews** <100% reviews completed on time 100% reviews completed on time N/A

Delivering on the keypeople objectives andmetrics

No demonstrable evidence ofcontributing to our vision values,team culture and effectiveness,diversity and inclusion

Demonstrable evidence ofcontributing to our vision, values,team culture and effectiveness,diversity and inclusion

Method of Measurement

N/AInconsistently acts in a safe mannerand/or does not implement all of theGroup’s health, safety andwellbeing requirements

Consistently acts in a safemanner and implements all of theGroup’s mandatory health, safetyand wellbeing requirements ontime

Weight 10% * For leaders with 10 reports or more)Leaders to complete MORs where applicable

** Staff members on leave during assessment period excludedAKey Results Area (KRA) People

Strategic Priority People & Culture


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How you will be measured... Risk AssessmentFY17 RISKREQUIREMENT

BELOWEXPECTATIONS

MEETSEXPECTATIONSROLE DESCRIPTOR

Credit ControlFramework

Portfolio Teams & RSMsSmall BusnessTeamsBroker AnalystsAsset Finance CentreLending Teams (BSS)

Average annual CCF score must be 93% or better as at 30 June 2017This is an accuracy rate on corrections made as a result of the CCF processFor new Portfolio owners a 3 month grace period will be provided

<93% 93% or greater■ ■

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0 itemsData Quality Portfolio Teams & RSMs Zero data quality remediation items un-actioned for 3 consecutive months or more (e.g. adata quality item reported in month 1 (July) must be actioned by the end of month 3(September)

1 or more items■

Credit Quality Review Portfolio TeamsSmall BusnessTeamsBroker AnalystsLending Teams (BSS)

An overall CQR rating of 2.8 for ten or more months of the year must be recorded, and;A rating of ‘Satisfactory' or better for eight or more months of the year on the followingsub CQR categories

- Covenant Monitoring- Expired Facilities

<2.8 >=2.8Plus satisfactory

covenantmonitoring &

expired facilities

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Credit Quality Review RSMs Portfolios must record an overall CQR rating 2.8 or better for ten or more months of theyear

<2.8 >=2.8■ ■

Annual Reviews andExpired Facilities

RSMs/SMsSmall BusnessTeamsBroker AnalystsLending Teams (BSS)

Annual Reviews and Expired facilities to remain within agreed ‘green' tolerance levelsfor nine or more months of the year (Tolerance levels subject to review)

<9 months >= 9months■ ■

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■Annual Reviews Expired Facilities <30 Days Expired Facilities >30 Days■

Green <5.0% <2.0% <0.5%

Amber 5.0% to <7.5% 2.0% to <5.0% 0.5% to <1.0%Red 7.5%+ 5.0%+ 1.0%+

>=1 error 0 errorBroker RelationshipManagement

Broker BDMs Material AML/Privacy/KYC/accreditation errors when on-boarding new, or maintainingexisting, broker relationships

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Risk Behaviours All Leaders & Colleagues Assessed against ‘Risk Behaviours' in your KPI Pack■ ■

I Measurescaptured by:PSM Deviations:Deviation Register (BBOperations, RiskandStrategy-Operational RiskTeam)CCF: CCF Database (BBOperations, Riskand Strategy- DataQuality&ComplianceTeam)CQR:CQR Database(RiskManagement, BusinessCredit-CQRTeam)Expired Facilities: BB KRI’s (BBOperations, RiskandStrategy - DataQuality&ComplianceTeam)

IMPORTANT NOTE:Professional Standards Management (PSM) Deviations of level 2 and 3 are ineligiblefor STI. Additionally, there may be other factors including CPA, Audit and otheraspects deemed by the Business Banking Risk & Remuneration Committee.


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Risk BehavioursExample risk behaviours, aligned to our Values, to guide team members and leaders

Team Member (Everyone) Team Leader

We Act with Integrityand have the courage to dowhat’s right

I only provide products and services that meet ourcustomers’ needsI speak up and escalate problems quickly

I always promote the importance of risk and take actionwhen issues are raisedI have the courage to deal with inappropriate behaviour

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We take Ownershipand hold ourselves accountable

I take individual accountability for identifying andmanaging risksI make sure I understand the risks I take in our business

I make sure my expectations about managing risks areclearI have the courage to call out and constructively dealwith poor risk behaviours

We Carefor our business, each otherand our community

collaborate across teams to make sound risk decisionsappropriately share information within the group

I collaborate with others and explore diverse views toresolve risks and identify better solutionsI prioritise Group outcomes over my BU goals■

We’re Passionateto excel and proud to thinkdifferently

I challenge the status quoI learn from my successes and mistakes and from thoseof othersI use good judgement in my decisions

I set a standard for excellence■

I encourage and sponsor continuous improvement for■

riskI demonstrate good risk judgement and decisions

Our Customersare at the heart of everythingwe do

I strive to understand our customer’s financial goals andneedsI deliver the right products and services to my customersI always act professionally when dealing with customers

I set high service standards for the team includingworking within the Risk Appetite StatementI take a long-term view of success and balance differentstakeholders’ interests


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FY17 Guidelines for Rating Risk Assessment

Fully MetExpectations Partially Met Expectations Does Not Meet Expectations

Achieve meets on:Risk Behaviours

Does not meet:Risk behaviours

Achieve meets on all elements of RiskAssessment items:■ Risk Behaviours■ CCF■ Data Quality■ CQR■ Annual Review & Expired

Facilities

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Meets at least 3 of:CCFData QualityCQRAnnual Reviews and ExpiredFacilities

Meets less than 3 ofCCFData QualityCQRAnnual Reviews and ExpiredFacilities

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KPIs Across Business, Commercial, Corporate, Property and Rural & RegionalBankwest StrategicPriorities

Sustainable Growth Simplicity Customer Experience People &Cultu re

StrategicAgenda

KPIs Deliver financial performance in a risk aware and sustainable manner being fully compliant with RiskAppetite Statement (RAS)

Simplify what wedo to make things

easier for ourpeople and our

customers

Drive customer advocacyby delivering exceptional

experiences

MakeBankwest a

great place towork, whereyou can speak

up and beyourself

Deliver FY17BW Strategic

Agenda

BankwestCashNPAT

BankwestBusiness

NPAT

Profit AfterCapitalCharge(PACC)

Revenue LendingGrowth

BusinessLending

Sales

BusinessImprovement& Coaching

StateSupport

Productivity andContinuous

Improvement

CustomerAdvocacy

MFI People &Cultu re

Deliver FY17BW Strategic

Agenda

Method ofMeasurement Customer

Growth

State Manager 10% 10% 10% 10% 10% 20% 10% 10% 10%

BPM 10% 10% 20% 10% 10% 30% 10%

RSM 10% 10% 20% 10% 10% 30% 10%

SRM 10% 30% 10% 10% 30% 10%

RM 10% 30% 10% 10% 30% 10%

ARM 10% 30% 10% 10% 30% 10%

BDM (CAT) 10% 40% 10% 30% 10%

BIE & RBC 10% 40% 10% 30% 10%

Team & Op Assistants 10% 40% 10% 30% 10%


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y 13 7000

$ bankwest.com.au/businessFOR BUSINESS

Bankwest, a division of Commonwealth Bank of Australia ABN 48 123 123124 AFSL/Australbn credit licence 2 3494 5

CBA.0517.0085.0185

Documents

Key Performance Indicators - Financial Services Royal