Transcript Title

Financial Year 2003 Results
and Outlook for the Future
Company presentation
April 2004
TABLE OF CONTENTS
• Company profile in the context of the Polish banking
market
• 2003 results
• Key elements of the program to improve asset quality
and arrange credit risk
• Key elements of the restructuring process for 2004
• Key retail commercial drivers for 2004
2
SYSTEMATIC GROWTH PROGRAM FOCUSING ON THE KEY
CLIENT SEGMENTS
Key segments approached
in retail division
Mass market
Affluent market
Private banking
clients
SMEs
Commercial actions prioritization
1
Client retention and win-back programs
2
Improving pricing discipline and fee structure
3
Cross and up-sell to existing clients
4
Selective, low key acquisition of new clients
3
IN THE MASS MARKET SEGMENT, KB IS PLANNING A STANDARIZED,
CAMPAIGN-BASED APPROACH
Sales force
• Support sales force by incentive programs and training
• Focus coaching efforts on the specifically identified weak spots of individual regions and
branches and spread around best practices in sales
• Establish a dedicated group of advisors on mortgages
• Win back 10% of clients lost least year based on systematic effort
Actions
•
•
•
•
– Contact clients that withdrew large sums of money
– Contact clients that recently closed accounts
Activate 10% of existing dormant accounts based on segmented lists of clients to contact
and specific value proposition; cross sell C/A to clients with deposit account
Double penetration of existing clients with credit cards and achieve market levels
– Use planned VISA campaign
– Develop and use pre-approved lists of clients
Achieve 3.5% market share of clients entering the market
– Signup events at job fairs, universities
– Systematic referral program
– Effective utilization of the branch network
– Prepare a basic package to be offered to every client
Mortgage product campaign to achieve 3-4% market share of the new mortgages
– Direct mailing to select clients
– Review KB policies regarding cooperation with real estate players (e.g., agencies,
developers, building associations)
– Develop relationships with intermediaries such as Expander, real estate agencies and
others who are in line with KB’s credit strategy
– Make processes more friendly for clients and shorten time
4
for decision
ADDITIONALLY, SPECIAL OFFER AND SALES&SERVICE APPROACH
FOR AFFLUENT AND PRIVATE BANKING CLIENTS IS BEING LAUNCHED
Sales force
• Establish advisors dedicated only for affluent segment
• Coach sales network staff to identify which clients should be approached
with savings account product offer
• Support sales force by incentive programs, training for sales staff
• Launch campaign on mutual funds sales
Actions
– Introduction of KB funds using KBC know-how and products
(example: KB Kapitał Plus)
– Target clients to offer individualized investment proposals
• Move balances from term deposits to a higher margin savings accounts
• Mine hidden affluents in the bank
– Develop special marketing offers
– Select the criteria of non-activated customers and develop lists of dormant
clients for contact
– Prepare pilot program of using selected group of customers
for direct mailing, then phone-call from branches and meetings, assess
most effective method for contacting clients
• Attract clients from Warta and Zagiel, and set up a systematic referral
program
• Introduce KBC offer for Polish Expatriates
5
IN THE SME SEGMENT, OUR GOAL IS BOTH ON CROSS-SELLING
AS WELL AS ACQUISITIONS
Sales force
• Introduce SME advisors as selling point
• Employment and training of SME advisors in branches
• Active canvassing on local level (cooperation with
community groups, etc.)
• Prevent client churn by systematic monitoring of portfolio performance
Actions
(balances, account usage, transactions) and ensure immediate action upon
a warning signal
• Cross sell investment product and increase loan penetration to market
levels (9-10%)
– Ensure smooth processing based on new scoring system and
understanding of credit processes by the sales force
– Prepare new BTL materials
– Prepare specific client target lists including pre-approved loans
• Acquire new clients with new Ekstratiznes product
– Capitalize on relationships of Zagiel – create special offer for Zagiel
distributors
– Utilize Warta client database
– Approach community groups and associations
6
THE ACTIONS SHOULD BRING SIGNIFICANT GROWTH IN THE KEY
RETAIL DRIVERS
Market share goals
Percent
Retail drivers
Deposits
• Mass/affluent – credits
• SME segment – transactions
• Private Banking – deposits
Credits
2003
2006
4.7
4.9
5.2
6.1
Housing loans
4.5
5.9
7
IN A STRATEGIC PERSPECTIVE KREDYT BANK IS PURSUING INTENSIVE
COOPERATION WITH WARTA AND THE KBC GROUP
Cooperation with
WARTA
insurance
company
Cooperation with
other Group
companies
Joint Retail
Executive
Committee
decisions
• KBC Insurance NV and TU Warta S. A. support regarding
technology and product offer
• Operational co-operation with TU Warta S. A.
• Using the potential of customer basis of TU Warta S. A. for cross selling
• Developing of promotion of bank services by the representatives of TU Warta S.A.
• Closer cooperation between KB S.A. Group members and KBC Group companies,
•
•
•
•
•
•
•
e.g. the joint syndication of the PGNiG transaction with KBC’s syndication desk in
London,
Introduction of KB founds using KBC know-how and products (example: KB Kapitał
Plus)
Introduction of KBC offer for Polish Expatriates
Business strategy broader than bancassurance (all products and services offered by
the KBC Group units – saving, insurance, asset management, investment, leasing,
consumer credits etc.)
Cross company activities regarding the product offer: ‘overlaps’ and possible
synergies among the units – short term, all retail related topics – in the longer term.
New distribution channel strategy: short term – structured cooperation based on
common standards, in the longer term – single country management for all distribution
channels of the Group units
Common customer database management and utilization; client orientation and
customer approach differentiation
Integration of marketing, sales support, best practices, regional management and call
centre
8
BACKUP
9
STRUCTURE OF PERSONAL FINANCIAL ASSETS IN POLAND SHOWS
GROWING IMPORTANCE OF MORE SOPHISTICATED INVESTMENT
INSTRUMENTS
Percent
Development of Polish PFA structure
Cash
17
14
18
International comparison
14
15
16
21
Cash and
deposits
30
34
39
45
21
MF
Bank deposits
75
74
72
75
70
65
Life and
pensions
15
16
10
9
16
11
11
29
Commercial
paper
MF
Life and pensions 2 1
Commercial paper 5
1998
1
3
7
2
8
1999
2000
2
4
5
9
2
2001
3
4
2002
32
46
10
22
3
6
2003
(I-IIIQ)
47
39
12
Belgium Spain
Germany France Italy
10
KREDYT BANK HAS ACHIEVED GROWTH IN NUMBER OF PERSONAL
ACCOUNTS
Thousand
XII’97 XII’98 XII’99 XII’00 III’01 VI’01 IX’01 XII’01 III’02 V’02 IX’02 XII’02
III'03
XII'03
Przyrost
od/
Growth
from
XII’02
PKO Bank Polski S.A.
2685
4726
4867
4.4
Bank PEKAO SA
995* 1427* 1787 2036 2092 2112 2148 2166 2142 b.d.
2689 2126
2468
b.d.
1070 1000
1175
1139
13.9
1079
1041
-3.2
BANK
3078
3710 4046 4100 4141 4228 4334 4411 4460 4534 4661
Bank Zachodni WBK
968
992 1021 1050 989
ING Bank Śląski
270
533
696
842
878
907
944
985 1003 1010 1021 1075
Bank Millennium
215
333
513
664
706
747
781
798
808
b.d.
818
820
804
818
-0.2
87
135
227
383
416
442
452
460
467
473
457
452
463
472
4.4
265
302
305
290
294
300
300
300
302
300
0.0
224
252
277
304
340
358
377
385
399
413
453
13.5
190
270
250
274
302
320
345
376
413
436
505
22.3
958
983 1002 1027 1048 1045 1046 1048 1055
1098
1075
1.9
BGŻ
Citibank Handlowy
Kredyt Bank
63
95
157
Lukas Bank
BPH/PBK**
536
678
846
* do roku 1998/up to 1998 GRUPA PEKAO SA
** do XII 2001 suma dla BPH i PBK/until XII 2001 sume of BPH and PBK
Źródło/Source: Rzeczpospolita,
11
CARDS 1995 - 2003
1 000 000
853 777
898 291
900 000
800 000
699156
700 000
529 907
600 000
500 000
400 000
272 841
300 000
200 000
68 192
100 000
1 066
3 194
1995
1996
8 959
0
1997
1998
1999
2000
2001
2002
2003
12
ATMs NETWORK - 2003
31
I0
XI
3
31
507
I0
XI
480
2
31
I0
XI
438
1
31
I0
XI
0
361
31
I9
XI
281
9
31
I9
XI
ATMs network access in 2003 - 98%
8
218
31
I9
XI
7
55
0
100
200
300
400
500
600
13
MANUFACTURING AND WHOLESALE REPRESENT A 57%
OF THE CORPORATE PORTFOLIOS
KREDYT BANK ONLY
December 2003
Loan Exposure
Provisions
100% = PLN 13,781,861
100% = PLN 2,141,462
Other
Other
Manufacturing
16%
Utilities
Local
authorities
28%
29%
7%
Utilities
3%
0%
7%
11%
Real estate
Manufacturing
22%
7%
Financial
intermediaries
Local
authorities
24%
Wholesale/retail
distribution
Real estate
15%
4%
Financial
intermediaries
27%
Wholesale/retail
distribution
14
36% OF THE LOAN PORTFOLIO IN RETAIL IS IN LOCAL CURRENCY
December 31, 2003
100% = PLN 1,739,315
Other
2%
PLN
CHF
36%
38%
7%
USD
Risk Mitigating
Elements for Foreign
Currency Loans
• Lower advance rate
by 10%
• Higher required
repayment capacity
• Higher interest
margin
17%
EUR
15