ManagementManagement BriefingBriefing London, May 2007

CREATINGCREATING AA BANKINGBANKING REVOLUTIONREVOLUTION

Presentation by David Guinane, General Manager, Branch Banking

Management Briefing – May 2007 IRELAND PERSONAL BANKING MARKET ¦ Traditionally dominated by the big 2 AIB / BoI – up to 80% of the market

¦ Economic success attracting new competitors „ BOS „ Danske NIB „ „ Fortis Bank

Management Briefing – May 2007 BACKGROUND

● permanent tsb launch - 2002

● Customer acquisition – key priority

●Current Accounts identified as key product

● 200,000 new current accounts opened by end 2007

Management Briefing – May 2007 CREATING A BANKING REVOLUTION

Outstanding Best Product Customer Service

RevolutionRevolution

Mobilise Breakthrough the Staff Advertising

Management Briefing – May 2007 BEST PRODUCT IN THE MARKET

● Launch of new current account

● Free banking for the first time in Ireland

Management Briefing – May 2007 OUTSTANDING CUSTOMER SERVICE

● Dedicated Switcher Team established

● Current Account Sales Co-ordinator appointed in each branch

● Mobile company visit Sales Team established

Management Briefing – May 2007 BREAKTHROUGH ADVERTISING

● Straight talking / direct

● Highlight current dissatisfaction – Wake Up!

● Switching is simple

Management Briefing – May 2007 CURRENT ACCOUNT ADVERTISING

Management Briefing – May 2007 PRESS ADVERTISING

Management Briefing – May 2007 TVTV ADVERTISINGADVERTISING

www.irishlifepermanent.ie MOBILISE THE STAFF

● Serious internal focus

● Staff up for the challenge

● Training and development

● Incentives

● Celebrate success

Management Briefing – May 2007 WHATWHAT DOESDOES THETHE REVOLUTIONREVOLUTION LOOKLOOK LIKE?LIKE?

Management Briefing – May 2007 BRAND NEW ACCOUNTS ONLY 200,000 new current accounts opened by end 2007 68,000

49,000

23,600

2004 2005 2006

Management Briefing – May 2007 SWITCH BALANCES SINCE LAUNCH Switch Current Account €m 800 698 700 646 600 500 400 300 300 200 100 0 2005 2006 2007 (April)

Management Briefing – May 2007 CUSTOMER QUALITY Stable average Balance for a/c € 6000

5000

4000

3000

2000

1000

0 2005 2006 2007 (April)

Management Briefing – May 2007 PROFILE OF CUSTOMERS

% of Age Accounts

18-25 18% 26-34 39% 36-45 22% 46-55 12% 55+ 9%

Management Briefing – May 2007 OVERDRAFT as a % of NEW CURRENT ACCOUNTS Overdraft Penetration

30% 28% 28%

25%

20%

15% 12%

10%

5% % of Current Accounts 0% 2005 2006 2007

Management Briefing – May 2007 INCREASING PURCHASE CONSIDERATION

50%

40% 33% 29% 30% 26%

20% 19% 16% 10%

0% Apr-04 Oct-04 Apr-05 Oct-05 Apr-06 Oct-06

Current Account Consideration

Source: BMR Research

Management Briefing – May 2007 COMPETITION RESPONDS

All major competitors have now reacted: ● Some form of free banking provided

● Credit interest

● Stepped up advertising

Management Briefing – May 2007 HOWHOW DODO WEWE CONTINUECONTINUE THETHE REVOLUTION?REVOLUTION?

Management Briefing – May 2007 CONTINUING THE BANKING REVOLUTION

Outstanding Best Product Customer Service ● 0% Overdraft ● Mobile Phone Banking ● Credit Interest up to €1,500 RevolutionRevolution

Mobilise Staff Breakthrough Advertising ● Staff incentivisation ● Ongoing investment Group Cross Sell in advertising

Opportunity

Our competition have reacted on Product, but we have the Service, the Brand & the Staff

Management Briefing – May 2007 THE REVOLUTION CONTINUES

● Largest Retail Bank in Ireland by 2016

● 500,000 new customers required in next 9 years

●Confident of continued success

Management Briefing – May 2007 ManagementManagement BriefingBriefing London, May 2007

ProfitingProfiting fromfrom thethe RevolutionRevolution

Bringing Life Assurance Sales Culture to the Bank

Presentation by Gerry Hassett, General Manager, Business Development

Management Briefing – May 2007 Key Topics

§ ptsb Bancassurance – Key Success Factors

§ Value Added

§ Applying the lessons learnt going forward

Management Briefing – May 2007 permanent tsb Bancassurance – A brief history

§ Started 1999 with merger of Irish Life / Irish Permanent ¾ new start-up

§ Priority objective for Irish Life & Permanent ¾ market share growth ¾ profit growth ¾ develop bank ‘sales engine’

§ Successful Business Model ¾ 100 Advisers ¾ 400 licensed branch sellers ¾ circa €50m new business profit (VNB)

Management Briefing – May 2007 Track Record of Growth ptsb Bancassurance Sales 2003-2006 (€M APE) 120

100

80

60

40

20

0 2003 2004 2005 2006

Management Briefing – May 2007 The Most Productive Bancassurer in Ireland

2006 - €000’s APE per Branch

€880 €682

€467

permanent tsb Bank A Bank B

Management Briefing – May 2007 permanent tsb Bancassurance – How to profit from the Revolution

§ Fantastic Customer Experience

§ High Performance Salesforce

§ Process Driven

§ Activity Management

Management Briefing – May 2007 Fantastic Customer Experience

§ Position Adviser around Full Financial Review service § Collaborative approach – no ‘hard-sell’ § Fully compliant § 94% would recommend to their friends § Simpler versions for Branch- based sales

Management Briefing – May 2007 High Performance Salesforce

§ High Quality People ¾ direct salesforce ¾ and young, ambitious branch personnel § Vibrant ‘Life Co’ Culture ¾ very pro-active, high energy ¾ resilient, result focussed ¾ highly incentivised § But, Delivering a Service ¾ strong relationship skills ¾ investment in skills and knowledge

Management Briefing – May 2007 Process Driven § Map out Life Co process and import into Bank ¾ Prospecting, campaigns, call centre etc. ¾ Seed with Life Co sales management § Significant Investment in Technology ¾ Highly electronic – diary, point of sale, execution ¾ Transparent, interactive and engaging § Customer Focussed ¾ Built around personal & family goals and priorities ¾ Repeatable and compliant process § Strong foundation for rapid growth ¾ Full support infrastructure

Management Briefing – May 2007 Activity Management 1,200 Planned § Focus on the Inputs Appointments ¾ prospects, appointments, reviews

§ Working Smarter not Harder €1,650 APE per ¾ Focus on quality and conversion efficiency Appointment + § Simple, Clear metrics 25% Walk-in ¾ Understood by all Business ¾ Feely available to all

§ Proactive line management €2.5m APE ¾ Intensive management of sales advisers Next week ¾ Direct link to Branch/ Area Managers

Management Briefing – May 2007 Value Added

§ Current Account Cross – Sell

§ Mortgage Cross – Sell

§ SSIA Conversion

Management Briefing – May 2007 Current Accounts % Cross-Sell to Current Account Customers

Bancassurance 14%

Credit Card 30%

Mortgage 12%

Term Loan 8%

*The % of New Current Account Customers that buy another product within two years of opening their account

Management Briefing – May 2007 Mortgage Cross-Sell Average APE per €1,000 Sum Assured

permanent tsb €4.39 IL Direct Sales €4.25 Lender A €3.16 Lender B €3.16 Irish Life Brokers €2.91 Lender C €2.90 Lender D €2.70 Lender E €2.49 Lender F €2.39

* This measures the value add per sale for every €1,000 cover issued with a mortgage Management Briefing – May 2007 SSIA Conversion

% Cross-Sell of SSIA Maturities

permanent tsb 21

Bank A 13

Bank B 10

*This measures the number of Bancassurance products sold for every 100 SSIA Deposit Maturities

Management Briefing – May 2007 Continuing to profit from the Revolution

§ Bancassurance

§ Branch Banking

Management Briefing – May 2007 Bancassurance - driving for further growth

Customer Experience Hi-Performance Sales Team

§ Upgrade Financial Review § Significant Investment ¾ Based on customer feedback ¾ Grow to 130 Advisers ¾ Major up-skilling programme § New Wealth Manager offering ¾ Sophisticated Advice process § Specialist Wealth Managers ¾ Broker-type product offerings ¾ Grow to 15/20 ¾ 20% of sales by 2009/10 § Outside Branch Hours ¾ Mobile sales unit § Dedicated Branch Sales personnel ¾ Target areas of population growth ¾ Driving SSIA activity

Management Briefing – May 2007 Bancassurance - relentless pursuit of Process

Process Driven Activity Management

§ “Paperless” Execution § Transparent view of activity ¾ 100% by end 2007 ¾ “open diary” analysis ¾ All compliance fully automated ¾ Daily analysis § Investment in CRM § Self-improvement analysis ¾ Prospecting 100% electronic ¾ Benchmark against colleagues ¾ On-line access to Diary/ mis ¾ Advisers to think as entrepreneurs § Campaign Analysis § Re-Allocation of Leads ¾ 100% electronic - “Closed loop” ¾ Maximise value of the customer base

Management Briefing – May 2007 Branch Banking - importing best practice

Customer Experience Hi-Performance Sales Team

§ SMART Sales § De-clutter the Branch ¾ Savings & Investments (Jan ’06) ¾ Centralise core admin processes ¾ Mortgages (Sept ‘07) ¾ Branch focus now primarily sales § Dedicated Sales Roles § Outside Branch Hours ¾ Branch Manager now sales ¾ Mobile sales unit ¾ Specialist Branch roles ¾ Target areas of population growth ¾ Investment in Training § Highly Incentivised ¾ Potential bonuses doubled

Management Briefing – May 2007 Branch Banking - sharing the obsession with Process

Process Driven Activity Management

§ Point of Sales Process § Activity Data on Bank Products ¾ Highly automated ¾ Weekly prospecting analysis ¾ Compliant and repeatable ¾ Focus on conversion efficiency ¾ Skills development § Investment in CRM ¾ Leverage Bancassurance platform § Re-define Branch Manager role ¾ Drive mortgage activity ¾ Primary focus on sales ¾ Managing a sales team § Centralisation of Admin ¾ Pro-active approach ¾ “one and done” in-branch ¾ Investment in self-service

Management Briefing – May 2007 The Revolution in Irish Banking

Customer Acquisition

Largest Retail Bank + = in Ireland by 2016

Pro-Active Cross-Sell

Management Briefing – May 2007