Big four share secrets on managing property

Turner & Townsend’s Retail Bank Benchmarking Survey 2015 interviewed property leaders anonymously across Australia from ANZ, CBA, NAB and Westpac (including the Bank of Melbourne), and shared the data with the participants to help them shape their strategic planning and asset allocation.

The survey analysed high-level areas of capital program delivery by the big four banks, including their approaches to design, program planning and costs.

Jon Poore, director of consulting at Turner & Townsend, said property seemed to have a different role to play depending on the bank, with some institutions taking a proactive approach to asset planning. Others, meanwhile, were more reactive to changing customer demands.

“One priority for property teams is to focus on better alignment with corporate strategy and to develop a responsive asset strategy that delivers bank objectives and shareholder returns,” he said.

“The objectives vary from bank to bank, and could include [being] an accessible bank located in prime city locations; a friendly bank with extra staff; or [a] digital bank with a limited number of branches. The brand strategy will help dictate where to place capital for the greatest return.”

Mr Poore said property is one of the greatest assets any bank has, and needs to be managed accordingly with a long-term strategy.

“Each year, banks spend millions of dollars on renovating, relocating and purchasing property assets,” he said.

“A simple and clear framework needs to be adopted in conjunction with the corporate team’s objectives to ensure the greatest cost savings and efficiencies can be realised.”

The survey also highlighted a large variance in how the banks approach capital program delivery, cost reduction and expenditure on internal fit-outs of their retail branch networks.

Expenditure on new stores varied significantly, with one spending over 15 per cent of its annual capital expenditure on unplanned work, while another spent five per cent, according to the survey.

There was a similar spend by all banks on building works and security. However, fitments, services and consultant fees varied by hundreds of thousands of dollars per project, Turner & Townsend said.

The variation in the front-of-house area for each member of retail staff reflected that some banks are already moving towards a self-service format, although there are differences in how banks count staff.