Transcript ABN AMRO Nv.

ABN AMRO
The Group’s
development in
France
Caroline du Rusquec
Iris Koolhoven
Antoine Gérard
Léonard Wapler
Best in France Project, May 2003 – Majeure Management International
Methodology
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Why ABN Amro?
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Interviews: We are particularly grateful to:
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Anne Lise Bapst, VP Communication , ABN Amro France
Philippe de Fontenay, Chairman & CEO of Fontenay Gestion,
former CEO of ABN AMRO Securities France
Web-based research
Best in France Project, May 2003 – Majeure Management International
Structure of our presentation
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ABN Amro worldwide
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The development of ABN Amro in France
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Difficulties, successes and challenges
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What is next ?
Best in France Project, May 2003 – Majeure Management International
ABN AMRO Worldwide
A leading European
bank, with a global
presence
Best in France Project, May 2003 – Majeure Management International
ABN Amro worldwide: General overview
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An originally Dutch company, stemming from
the merger of 2 complementary banks in 1991.
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ABN: an already international retail bank.
Amro: a Dutch investment bank.
Today, around 105 000 employees located in
70 countries.
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France: 2600 people, 2.4% of manpower.
Next acquisitions ? Brazil, Germany
Best in France Project, May 2003 – Majeure Management International
ABN Amro : a major European player
GDP and Profitability evolution
In m€
20000
33%
32%
31%
15000
30%
29%
Revenue
28%
EBIT %
10000
27%
5000
26%
25%
0
24%
1998
1999
2000
2001
2002
Source: Annual Report 2002
Best in France Project, May 2003 – Majeure Management International
ABN Amro worldwide: scope of activities
Repartition of worldwide GDP, 2002
Private
banking
20%
Wholesale
20%
Retail
60%
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ABN AMRO Group is mainly a
retail bank
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98% of the Group’s net profit
stems from the retail activity
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Its wholesale and private
banking activities are Tier-2
activities on a global level
Source: Annual Report 2002
Best in France Project, May 2003 – Majeure Management International
The restructuring: 2000
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3 business units: Wholesale, Private Banking,
Retail.
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Rationalizing the back-office.
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Downsizing: 450 people in France (of 2600 employees)
To better control the ROI of each unit
Rationalization brand-BU
Modernization of management tools.
Global outsourcing of IT to EDS
No real geographic strategic organization
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Three global Strategic Business Units
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Consumer & Commercial Clients (C&CC)
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for individuals and small- to medium-sized
enterprises requiring day-to-day banking.
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approximately 15 million clients, mainly in the three
“home” markets: the US Midwest, the Netherlands
and Brazil.
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also expanding in selected countries such as India,
Hungary and Thailand.
Best in France Project, May 2003 – Majeure Management International
Three global Strategic Business Units
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Private Clients & Asset Management (PCAM)
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for individuals and institutional investors.
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a leading player in private banking
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Private Clients ranks among the world's top 10, with
EUR 96 billion in Assets under Administration.
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Asset Management has a local presence in 30
countries and EUR 150 billion in Assets under
Management.
Best in France Project, May 2003 – Majeure Management International
Three global Strategic Business Units
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Wholesale Clients (WCS)
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for major international corporations and institutions.
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One of the largest Europe-based wholesale banking
business with around 10,000 clients, 20,000 staff
and operations in over 40 countries.
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With a global network, specialists in all major
industry sectors and a broad range of products,
ABN AMRO provides local and global expertise for
complex cross-border deals.
Best in France Project, May 2003 – Majeure Management International
ABN AMRO in France
The development of
the bank in France
Best in France Project, May 2003 – Majeure Management International
ABN Amro France: Historical highlights
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ABN first entered France in 1975
and established itself in 1977 by taking
a majority share in NSM SA. This was
part
of
ABN’s
international
development strategy.
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1996: establishment of ABN Amro
Rothschild JV
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1997: two acquisitions; of the Phénix
bank and the Demachy bank
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1980: merger of the Jordaan bank and
NSM
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1998: MFK changes into ABN Amro
Securities France, the Phénix bank
merges with NSM
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1988: acquisition of two listed
companies: Massonaud-Fontenay and
François Dufour-Kervern, which merge
in 1992 to become MFK
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1999: NSM and the Demachy bank
merge to become the NSMD bank
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2001: joint venture Finaref - ABN
Amro bank
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1994: acquisition of the OBC bank
Best in France Project, May 2003 – Majeure Management International
ABN Amro in France: Structure
ABN AMRO Group
ABN AMRO France
Private Banking
Banque NSMD
Banque OBC
Wholesale
Corporate Finance
AA Capital France
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ABN Amro in France: General Overview
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2600 employees (2.4 % of worldwide manpower), 2.5% of worldwide
GDP, about €630m.
3 business units:
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Wholesale: Institutional customers and large corporate (3% of
Wholesale worldwide revenues)
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'private clients & asset management‘: €20Bn Assets Under
Management (15% to 20% in terms of Private Banking worldwide
revenues)
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Retail: Consumer and commercial customers (No significant
presence in France)
In terms of breakdown of figures, the structure of the group in France is
just the contrary of the structure worldwide
Best in France Project, May 2003 – Majeure Management International
ABN Amro in France: range of activities
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Asset Management
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NSM Gestion
OBC Gestion
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Investment banking
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Life insurance
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NSM Vie
NSM Pensions
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Stock market activities
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AA Securities France
AA Contrepartie France
AA Futures France
AA Fixed Income France
AA Capital France
AA
Corporate
Finance
France
Joint-Venture ABN AMRO
Rothschild
Other activities
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Leasing: Lease Plan
IFN Finance
Best in France Project, May 2003 – Majeure Management International
ABN Amro in France: organization
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Each business unit has a country
representative in France
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All branches in France are autonomous, but
any strategic decision must be approved by
Amsterdam or London
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September 2001: New joint venture: Banque
Finaref - ABN Amro
– savings, stock and life insurance
Best in France Project, May 2003 – Majeure Management International
ABN AMRO in France
Difficulties,
successes, and
challenges
Best in France Project, May 2003 – Majeure Management International
Strategy Analysis: Why France?
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In 1975: no logical strategy in ABN ’s
acquisition of NSM SA:
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ABN was not in the business of Private Banking
No synergy between the two entities
Hope of doing a profitable investment
In 1988, clear strategy of AMRO: take
advantage of the market’s deregulation to
internationalize its activities in its core
business: Investment banking.
Best in France Project, May 2003 – Majeure Management International
Strategy Analysis: The French exception
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During the 90’s, ABN-AMRO rapidly developed in France through
different acquisitions.
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Strangely, most of the acquisitions were done in the business of
Private Banking. This strategy was at the opposite of the group’s
world strategy of developing Retail Banking : Banco Real and
Sudameris in Brazil, Lasalle in the USA.
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Reasons were good opportunities in the Private Banking sector
(OBC, Demachy) and impossibility to start from 0 in Retail Banking.
Best in France Project, May 2003 – Majeure Management International
The Human Resources strategy
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NSM presents strong local particularities
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A strong corporate culture
A very unionised organisation
No real commercial approach towards new clients: “we are the
best and clients come to us”
Banking crisis required a new approach to the business
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The previous attitude is not sustainable in a market in crisis.
Need for transforming the French bank into an international
bank using English as working language and cutting down on
staff.
Best in France Project, May 2003 – Majeure Management International
The Relationship Headquarters-Subsidiary
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Difficult to build trust despite good relations
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By nature, the Dutch adapt themselves very easily in foreign
countries. In the French subsidiary, their integration was very
discrete and they are appreciated for encouraging initiatives..
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Mistrust of the Dutch headquarters towards the independence
of some French branches.
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The French managers must develop their relations with the
group’s top managers in order to gain their trust.
Best in France Project, May 2003 – Majeure Management International
The current strategy in France
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Will of the headquarters to apply a strict control on the
French operations
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Headquarters very demanding in terms of budget control and
internal and external auditing.
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This is especially true in Wholesale. Private Banking, by
nature, stays a little bit out of control.
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Use of a few expatriates either to manage operations or to
keep an eye on them:
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This strategy, for instance, is different from the one applied in
the US where no Dutch people are implied.
Best in France Project, May 2003 – Majeure Management International
The restructuring plan in France
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Implementation in 2001 of the new organization in
France: 3 main business units
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A much better control of the French subsidiaries
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Already
visible
effects:
better
management
information, quicker and more efficient reporting
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Downsizing: 400 people out of 2600 = 16% of staff
 negotiation with unions is hard!
Best in France Project, May 2003 – Majeure Management International
of
Today’s challenges
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Will the restructuring plan be a success in France ?
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Will the OBC bank merge with the NSM bank ?
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Fitting the new organization is a challenge: 400 people out of
2600 will have to leave this year…
Probably not: OBC’s ROI is one of the largest in the group, it is
a very specific bank with a strong brand in the media business.
Will ABN Amro proceed to any acquisitions in France ?
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Nothing planned for the time being, the main objective is to
complete the restructuring plan!
Best in France Project, May 2003 – Majeure Management International
Thank you for your attention !
Q&A?
Best in France Project, May 2003 – Majeure Management International