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 Halifax BOS Danske NIB Rabobank 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 ● Irish Life 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.