Integration Support for Financial Institutions

Transcription

1 Integration Support for Financial Institutions Do you have any concern regarding cross-border business integration? Service Overview Amid a slowdown in long-term economic growth in the Japanese domestic market, the accelerating trend for the development of global business platform leveraging M&A in a short period of time can also be seen among the Japanese financial institutions targeting fast-growing Asian markets and other large-scale markets including the US financial market. On the other hand, it is not always easy to unlock the potential of acquired local companies for group-wide synergy maximization in the face of various barriers, such as differences in competitive environments and business models of each country, country-specific financial regulations and taxation system, together with gap in languages and cultures. With our global network of experts specializing in the financial industry in157 countries, PricewaterhouseCoopers Co.,Ltd(PwC) is capable of providing assistance for our clients with supports from the initial stage of M&A strategy development to the full-scale post-closing business integration followed by transformation. Client Issues While M&A has become widely known as one of the most important strategies, there are only a limited number of Japanese financial instiutitons that have actually succeeded in post-merger integrations along with the consequent full-scale transformation of organization/process/systems that are indispensable for the realization of the initial purpose of M&A planning.

2 Our Approach Through the findings from synergy/risk analysis focused on business model/operation process/system, PwC assists our clients to acquire the value expected at the time of M&A planning in a short period of time and to promote the transformation for the strategy realization with the development of integration planning from the pre-close phase and regular tracking of synergy initiatives. By leveraging tools/templates developed based on PwC s past integration/transformation experiences, we provide support for early-establishment of Integration Management Office (IMO)/ Workstreams, strict overall progress/risk management, visualization of synergy effects, as well as creation of explicit knowledge/organizational knowledge regarding integration.

3 Impacts Case Example 1: Support for cross border business integration utilizing PwC global network We provided assistance for a major Japanese bank which has made a foreign bank into its full subsidiary for the business integration. More specifically, we helped this client to design the new bank s integration business model for the management of integrated business/operation to solve the issues for achievement of the goal by providing the supports of PwC members specializing in Finance/Accounting, HR, Risk Management, System, and Business Administration of the local office. In Japan and the local country, PwC Japan s consultants also supported the client with the agreement formation to enable appropriate incorporation of the global governance structure through close coordination with the Integration Management Office and relevant stakeholders while ensuring the local autonomy of the new bank. As a result, we could contribute to stable integration of business as initially planned.

4 1 Project reporting sheet 2 Measure tracking sheet Output analysis Master report Plan / FC deviations Project sheets Master file overview 2 Originally planned Gross savings Output analysis for management reporting Master reporting tool Recurr. cost 1 4 Summary One-time expenses Consolidation 3 Plan / actual deviation Capex FTE Setup of master reporting tool Plan Gross savings Forecast Recurring cost One-time expenses Capex FTE Act BD Plan Act BD Plan Act BD Plan Act BD Plan Act BD Plan Deviation Lever 3 Management plan (incl. add-on) IPO case Overall status of the program TP = potential FI = Financial Impact TI = Timing TP FI TI Brand 3 Brand 2 Brand 1 Execution per lever & maturity grade Maturity grades MG 1 MG 2 MG 3 MG 4 MG CASH bridge incl. gap Headwinds Cost reduction Tariff/ Material Price Cost Recurr. pers. price decay reduction costs Volume & mix GAP YTD financial impact per lever 2011 MTD YTD Full year Status Δ (Bottom-up) FC FI ACT PLAN ACT PLAN Bottom-up Top down FC Target Budget IPO PM Cum. GAP 2011 Case example 2: Transformation Management Office for promotion of post-acquisition value enhancement Our private equity fund (PE) client had a goal of enhancing business platform to improve EBITDA by 30% in 3 years regarding an acquired subsidiary. For this endeavour, we worked to identify all findings from due diligence, cost reduction measures planned by the subsidiary, and recommendation from an external advisor to define improvement measures for over 60 items upon prioritization and placed the person responsible as well as the deadline. We also established the Transformation Management Office (TMO) to facilitate the firm-wide value enhancement initiative and supported the following areas as the TMO members. Planning :Design the improvement measures set by the top-down approach to the field level Tracking: Operate the Management Reporting process through the progress measurement with EBITDA impact amount Driving: Provide expert advice for promotion of improvement measures With the implementation of the value enhancement system mainly around TMO and visualization of the progress along with the incentive system, our client successfully achieved the financial goal set at the time of acquisition within 3 year. Program Management Business Cases Master Initiative Plan Steering Committee XX Transition Management Office Biz Strategy Initiative Distribution Strategy Manufacturing Human Resources Real Estate Contract Management IT Finance Procurement Marketing Sales Product Development Benefits Tracking Monthly Status Report TMO Dashboard Compiling of plan and actual project effects Consolidation of project effects on programme level Reporting of results in defined formats TMO XXX PLAN Top down target setting ACT/FC Bottom up target fill level Reporting of plan and actual project performance Bottom-up support of reported effects with measures Validation of actual EBITDA effects via actual controlling concepts aligned with available IT systems Consolidation of individual project sheets to overall programme master tool Allocation of financial impact on legal entity, P&L line and business unit Analysis of plan vs. forecast vs. actual deviations per financial effects Definition of management presentation format Reporting of EBITDA/ cash impact by maturity grade Execution status of major initiatives / improvement levers Current status, critical issues, and future milestones by lever

5 Contacts Yusuke Aiba Akira Hirashima Yuichiro Iwakami Nic Wilson PricewaterhouseCoopers Co., Ltd.. All rights reserved. PwC refers to the PwC network member firms and/or their specified subsidiaries in Japan, and may sometimes refer to the PwC network. Each of such firms and subsidiaries is a separate legal entity. Please see for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.