Set to be the leading digital omni-channel bank

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Judith Henderson
6 years ago
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1 Set to be the leading digital omni-channel bank

2 AGENDA Business model and key success factors Key highlights of Business Plan Closing remarks 82

BACK IN 2008 LAUNCHING ANOTHER ME TOO BANK WOULD HAVE BEEN MADNESS 800 brands (<10 genuinely online) % of % Families of Families with with account account 100 100 34,000+ branches 80 80 77 78 77 82

3 BACK IN 2008 LAUNCHING ANOTHER ME TOO BANK WOULD HAVE BEEN MADNESS 800 brands (<10 genuinely online) % of % Families of Families with with account account ,000+ branches million bank accounts %+ families with at least 1 account % of customers change brand Bank1 Bank 2 Banks 2 Banks 3 or more 3 Banks more Banks YEAR YEAR YEAR YEAR YEAR YEAR

PRICING Negotiated & not transparent Standard & transparent yet competitive SERVICE Branch-centric Other channels to

4 Fasi del ciclo di vita di CheBanca! Avvio Multicanale WE NEEDED A BREAKTHROUGH POSITIONING (BLUE OCEAN) Area Traditional Bank CheBanca! PRICING Negotiated & not transparent Standard & transparent yet competitive SERVICE Branch-centric Other channels to support Customer-centric Digitally evolved New branch model CUSTOMER RELATIONSHIP Decentralized to branch-level Centralized and CRM driven EMPLOYEE Specialist & old-fashioned Services & sales oriented coming from street retailing 84

5 DID IT WORK? YES! AuM ( bn) Clients Direct funding No. of clients (K) 12bn deposits with more than 500,000 clients! March

6 1. THANKS TO A REAL MULTYCHANNEL PROPOSITION 2012 product sales split by channel 10% 15% 2% 4% 7% 8% 10% 9% 8% 6% 9% 9% 4% 5% 25% 79% 78% 81% 81% 50% Che Banca! Western Europe Southern Europe Central Europe Eastern Europe As of April 2013 Branch Internet Customer Center Other Source: Multichannel Banking in Europe 2012 (Efma, Finalta) CB! Internal Data as of April

7 2. AN INNOVATIVE BRANCH CONCEPT AND STAFF QUALITY 87

8 3. A GROWING USAGE OF REMOTE CHANNEL OVER TIME Channels usage over time 11% 11% Only 33% Web 33% 18% 18% 31% 31% 35% 35% 47% 47% Direct Channel 21% Multi Channel 32% Only Branches 14% 21% 32% 14% 50% 21% 50% 21% 22% 22% 20% 20% 22% 22% 36% 36% 30% 30% 21% 21% 12% 12% 15% 15% 10% 10% Actual average First year (opening account) Second year Third year Fourth year and beyond Direct Channel = Web + Call centre Multy Channel = Web + Call centre + Low branch interaction 88

9 4. OUR CLIENTS ARE: SMART Web, new devices and social networks CB! CLIENTS NATIONAL AVERAGE Browse on Internet Smartphone / Tablet owner On social network Said Yes (%) Source: MPS Marketing Research - March

10 AFFLUENT Client distribution (%) Deposit distribution (%) Average Deposit/Client ( K) Above 150K 5% 5% to 150K 28% 30% 38% 54% Above 150K +76% 21 Up to 30K 67% 65% 52% 39% 30 to 150K 10% 7% Up to 30K CheBanca! Avg. Italian banks CheBanca! Avg. Italian banks CheBanca! Avg. Italian banks Similar distribution Already concentrated on affluent clients With bigger average client portfolio Great opportunity for ADVISORY SERVICES AND INVESTMENTS 90

HIGHLY SATISFIED WITH US AND WITH STRONG CROSS-SELLING POTENTIAL Higher satisfaction results in increasing cross-selling

ones (sales volume >X3!) BEST ONLINE* BANK FOR CUSTOMER SATISFACTION Great opportunity for ADVOCACY AND CROSS-SELLING 9.000 8.

747 Avg : 2,5K 2.773 2.639 >X3 2.002 1.868 Avg : 8K 7.291 TV Add 8.

11 HIGHLY SATISFIED WITH US AND WITH STRONG CROSS-SELLING POTENTIAL Higher satisfaction results in increasing cross-selling Feb2013: launching new WEB Current Account (zero cost on-line): great success among existing customer (45% of sales) and new ones (sales volume >X3!) BEST ONLINE* BANK FOR CUSTOMER SATISFACTION Great opportunity for ADVOCACY AND CROSS-SELLING Digital Signature from October 13 will boost x- sell Avg : 2,5K >X Avg : 8K TV Add jul - 12 aug - 12 sep - 12 oct - 12 nov - 12 dec - 12 jan - 13 feb - 13 mar - 13 * CheBanca! recently voted the Best Online Bank for Customer Satisfaction, among 6 online banks operating in Italy 91

12 AGENDA Business model and key success factors Key highlights of Business Plan Closing remarks 92

13 MISSION: TO BE THE LEADING DIGITALLY OMNI-CHANNEL ITALIAN BANK FIVE STRATEGIC PILLARS 1 Leverage on Retail industry new trends 2 Growing digital omni-channel banking customers 3 Complete products and services offering 4 Increase efficiency 5 Exploiting group synergies STRONG OPTIONS VALUE FOR MEDIOBANCA GROUP 93

14 1 TECHNOLOGY IS CHANGING THE WAY WE LIVE In Italy 60% of families have a PC 45mln people have a cell phone 25mln people connect via smartphone 3 mln people connect via tablet Source: KPMG based on Nielsen and Audiweb data 94

15 1 AND THE WAY WE DO BANKING Online banking usage Percentage 1, 2011 or latest available India Italy still lagging behind, while CheBanca!... China IV Bricks & mortar yrs Brazil Mexico Turkey Colombia Argentina Serbia Russia Romania Portugal Italy Greece Macedonia Slovenia Middle East Norway Netherlands Finland Sweden Denmark Canada Belgium United States France Germany United Australia Kingdom Japan Austria Switzerland South Korea III Bulgaria 7-10 yrs Online adaptors Multichannel II Poland Hungary Spain Ireland Self-first 3-5 yrs I Czech Republic Luxembourg 1 Percentage of individuals that used the internet / online banking at least once in the past three months Source: McKinsey analysis based on Eurostat; national statistics 95 Internet usage Percentage 1, 2011 or latest available

16 1 CHEBANCA! IS WELL AHEAD IN THE DIGITAL BANKING REVOLUTION Sales split by channel: Branch Direct channels* European Retail banking Benchmark CheBanca! Today Tomorrow (2015E) 49% 51% 53% 38% 84% 77% 51% 49% 47% 62% 16% 23% Current Account Deposit Current Account Deposit Current Account Deposit Already outperforming current benchmark Better result in C/A, room for improvement on deposits *: Includes web, customer center, agent and other channels Source: McKinsey analysis EFMA online survey across 150+ European banks; 96

MISSION 1 READY TO BE THE FIRST MOVER IN VIRTUAL BANKING Ease, accessibility and transparency Today Tomorrow Advanced digital and responsive CRM Know your

17 MISSION 1 READY TO BE THE FIRST MOVER IN VIRTUAL BANKING Ease, accessibility and transparency Today Tomorrow Advanced digital and responsive CRM Know your clients Physical vs Virtual relationship Building TRUST beyond physical walls Main bank, share of wallet, affluent targeting Omni-channel: anytime, anywhere 97

18 2 WE ARE WELL POSITIONED TO ATTRACT NEW BANKING CUSTOMERS Key driving factors when choosing to switch bank Quality of service Fees Interest rates Ease of use Quality of Advice Accessibility / convenience ATM locations Branch / Bank locations Product availability Personal relationship Brand image / reputation Rewards / loyalty programs Recommendations 0% 20% 40% 60% Source: World Retail Banking Report 2012 (Efma, Capgemini) 98

19 2 TO FISH IN THE BLUE OCEAN! CheBanca! scores much higher results on key driving factors when choosing to switch bank 5.0 CHEBANCA! MAIN ITALIAN RETAIL BANKS FEES EASY TO CONTACT ALWAYS TRY TO DO BETTER PRODUCTS PRODUCTS OFFERS SIMPLE AND CLEAR QUALIFIED OFFER SUITABLE PRODUCTS FOR MY ATM REQUIREMENTS AVAILABILITY EASE OF USE QUALITY OF SERVICE ALWAYS UPDATED A STEP FORWARD BRAND IMAGE REPUTATION Source: MPS Marketing Researcg, March 2013 customer survey (scale 0-5) 99

2 BUILDING A TRULY CUSTOMER-CENTRIC MODEL

the new consum attore Enhance customer experience

real omni-channel where mobility is key Each

interface Responsive campaign direct The Campaign

Mobile : leadership in Italy in P2P payments,

20 2 BUILDING A TRULY CUSTOMER-CENTRIC MODEL Re-design business processes and technology for the new consum attore Enhance customer experience Offer the best product for each customer Allow real omni-channel where mobility is key Each customer is unique Personalized home banking interface Responsive campaign direct The Campaign Cube Customer A Customer B Customer C Project Mobile : leadership in Italy in P2P payments, payments through NFC/MPOS technology, and remote digital wallet for e- commerce 100

21 2 TO INCREASE NUMBER OF CURRENT ACCOUNT CLIENTS Current accounts stock and cross-selling ratio (# thousands, percentage) Cross-selling ratio 1.3x 1.7x +150% Current Account stock FY 2013 FY

22 3 WHILE INCREASING OUR SHARE OF WALLET... Until now, the crisis has forced customers to look for safe returns, thus favoring term deposits The amount invested in TD represented more than just excess liquidity In a "back-to-normal" scenario the amount invested in TD will be limited to excess liquidity Therefore the priority is to develop other forms of investment to meet needs Share of wallet (today) Share of wallet (tomorrow) Others Bank 65%-55% 35%-45% CheBanca! TD Others Bank 30% 20% CheBanca! TD 50% Customer CB! largely multi-banked Difficult to aim at 100% share of wallet CheBanca! other investment products 102

23 3 VIA THE COMPLETION OF PRODUCT/SERVICE OFFERING Objective 1: Increase new customers and / or new AuM Objective 2: Increase share of wallet of our customers Products Products Web current account Investment products NEW!! Hook: for acquisition Term deposit Mortgage Push: for x-selling activities Mediobanca and third party bonds Loans and overdraft NEW!! Investment account 2.0 NEW!! Key to strength loyalty and increase customer value 103

3 FOCUS: LAUNCH OF ASSET MANAGEMENT WHO? WHAT? HOW?

investment products Quick start with sales focused on multi-channel model Phase 2: start remote full

advisory model focused on simple investment products building on long-term reputation Branches

24 3 FOCUS: LAUNCH OF ASSET MANAGEMENT WHO? WHAT? HOW? Guidelines Leverage existing affluent and satisfied customer base to build an open platform for investment products Quick start with sales focused on multi-channel model Phase 2: start remote full advisory model Openarchitecture + Asset management selection Partner 1 Partner 2 Inhouse Light advisory model focused on simple investment products building on long-term reputation Branches Digital/ remote Customer Center Toolkit: Unique navigation tools MiFID exploitation (segmentation / guidance) Responsive H-B and digital campaign 2 bn AuM by 3rd year 104

25 3 Assets evolution bn 12 0 Deposits Focus on current account growth Current Account Term deposit 4 AUM Developing a managed fund offering Managed funds Other FY 13 FY

26 4 WE WILL MAXIMIZE EFFICIENCY Exploiting scale economies Fixed cost per product in stock Guidelines Refocus of sales force Strong focus on efficiency and processes optimization across the whole bank: exploiting scale economies FY 13 (BASE) FY 16 And improving efficiency Variable cost per new product openings reducing variable operating costs FY 13 (BASE) FY

27 5 EXPLOITING GROUP SYNERGIES TO BOOST REVENUES AND GAIN EFFICIENCY Area of synergy Leveraging existing capabilities in the Group: Revenues Personal loans & Cards Investments CRM & x-sell Distributors & partners Already working together: Sell new personal loans Improve credit cards approval s rate and risk performance Efficiency Risk Management 107

28 AGENDA Business model and key success factors Key highlights of Business Plan Closing remarks 108

29 CHEBANCA!: A STRAIGHT AND SCALABLE SOURCE OF VALUE FOR THE GROUP 1. CheBanca! represented a radical new departure in the way retail banking is perceived and managed in Italy 2. The trajectory started in 2008 was the right one creating a new brand and market positioning attracting new clients and flows delivering a scalable platforms in terms of know-how and products 3. we are now well positioned for the second phase, the pattern of which will be driven by fast-changing customer behaviour and disruptive innovation. These days good things do not come to those who wait but to those who move and we are moving, with the following agenda: growing as a digital omni-channel bank to serve our clients in all their banking needs delivering fair profitability to the Group as a stand-alone bank while confirming our role as strategic funding arm for the Group over time 109

Grow and remix total assets FY16 revenues: 1bn, CAGR +7% ROAC16 = 10-11% Lowering cost of funding

30 Consumer & Retail: increasing size and depth of the retail franchise Compass Loans up to 11bn, CAGR +4% Develop asset-light business Preserve efficiency and asset quality ROAC = 13-14% CheBanca! Grow and remix total assets FY16 revenues: 1bn, CAGR +7% ROAC16 = 10-11% Lowering cost of funding Total up to 14bn, CAGR +5% Deposits: from 12bn to 10bn AUM: from 1bn to 4bn Cost efficiency Profitable by Y

GLOBAL VIDEO-ON- DEMAND (VOD)

GLOBAL VIDEO-ON- DEMAND (VOD) HOW WORLDWIDE VIEWING HABITS ARE CHANGING IN THE EVOLVING MEDIA LANDSCAPE MARCH 2016 A CHANGING VIDEO-VIEWING LANDSCAPE Nearly two-thirds of global respondents say they watch