IBOS VALUE PROPOSITION IBOS - Making Cross-border banking easier IBOS VALUE PROPOSITION INTERNATIONAL BANKING ASSOCIATION PRESENTATION

IBOS Value Proposition SERVICES What is IBOS Association? An international banking alliance, focused on providing corporate customers with International Cash Management Solutions. IBOS is based on its 15 members and their subsidiaries, each of which is a leading supplier of local banking services in their domestic markets.   The IBOS offering consists of: Competitive local services at the IBOS bank in the country concerned. Meshing of local services into regional, multi-country Cash Management arrangements using the IBOS cross-border services

IBOS Value Proposition SERVICES How is the service delivered? The offering is brought to the corporate customer via its local member – the Host Bank. The Account-Holding Banks work to the Host Bank as regards establishment of accounts and services, electronic banking and relationship management. Typical Set-Up Central Treasury of the customer uses Host Bank electronic banking to receive MT940/1/2 on all accounts and to operate them using MT101 and MT103. Subsidiaries use the electronic banking of their in-country Account-Holding Bank to instruct their Payables, manage day-to-day liquidity, and to receive statements for reconciliation.  Network Co-Ordination IBOS Association has a central support office in London, which coordinates the streams of work and the definitions of messages and processes that make IBOS a network.

IBOS Value Proposition SERVICES What is the service? Streamlined account opening Local payment, cash management and treasury services Local payments based on MT101 Cross-border payments based on MT101 and MT103 Previous-Day and Intraday Balance and Transaction Reporting Automated Cross-Border Zero-Balancing in Euro

IBOS Value Proposition SERVICES What benefits does IBOS bring to customers? Streamlined account opening The process & required documentation for every bank is known at outset. The account opening forms are completed by the receiving bank on behalf of the customer. There is a process in place to deal with any blockages to account opening.   Hands-on adoption of new customers Dedicated staff at all banks to make and receive introductions. Introducing bank creates detailed profile of each customer and their business. Customer is promoted within the receiving bank’s IBOS team. Consistent process & service across a big area Familiarity of the IBOS banks with the processes, across multiple countries. STP payments with short turnaround. Large number of countries covered in depth. Local and cross-border banking all under one roof Customers can deal with one bank per country. Knowledge of local market & practices. Banks work together-without overlay-to enable a regional cash management solution.

IBOS Value Proposition SERVICES What benefits does IBOS bring to members? Basis for a compelling proposition to customers Retention of existing customers with an ICM requirement. RFP questions can be answered, both for domestic & cross-border services. Contact network for responding in pre-sales phase & in-production.   Cost benefit to building own network No cost involved in creating new agreements as they are already in place. Low entry fee. No need to commit to volumes of business sent. Wide reach via one set of agreements Access to the IBOS services in 28 countries via the IBOS agreements. Further reach through nominated affiliates of Member banks. Depth within each country. Scalable Guaranteed Service Levels: high quality, commitment, issue resolution & redress A documented Guaranteed Level of Service is provided by all IBOS members. Dedicated multi-lingual teams in each bank to operate the service: banks always know who to call. Quality assurance and escalation procedures.

IBOS Value Proposition SERVICES Why is IBOS different to Other Banking Clubs (Unicash/Connector)? Top tier banks Strong market position in home country. All are commercial banks. Membership of all local clearing systems.   Formality & depth of structure IBOS has a clear framework & governance structure, which is supported by legal agreements. Member banks are represented on the IBOS Working Group Committees. Minimum of 6 Working Group meetings per year in total. Central office, legal entity & permanent secretariat. Three ongoing workstreams versus one Permanent central office support & monitoring of processes & services. The three separate IBOS workstreams are run by committee, and are comprised of the IBOS member bank representatives. There is a commitment by members to dedicate resources to these workstreams.

IBOS Value Proposition SERVICES Why is IBOS better than Other Banking Clubs (Unicash/Connector)?   Higher service level Short guaranteed timeframes for account openings & payments. Harmonised pricing & same-day value payments. DZero daily cash concentration. More robust quality assurance Members have a legal commitment to provide the IBOS level of service. There is ongoing monitoring by the IBOS central office. Members have recourse via the IBOS Board of Directors. Better cohesion The IBOS private extranet holds extensive information about IBOS member banks & countries, IBOS products, processes & pricing. There are designated IBOS contacts at each member bank. Regular Working Group meetings in each workstream – strategic, technical, business development.

IBOS Value Proposition SERVICES Why is IBOS different to Bilateral Arrangements? IBOS is a many-to-many model with a single protocol, rather than multiple one-to-one arrangements To obtain the IBOS Association Service Levels from IBOS members, a bank can sign up via one Accession Agreement to all existing agreements. Administration of the IBOS Service Levels requires changes to one set of documentation only. There is a guaranteed level of service for all IBOS services, across the IBOS Membership.   Harmonised terms One process & service level to open an account with any IBOS Bank. One pricing tariff for select services in key Euro countries. One Euro cash concentration product for multiple countries. Focus is corporate customer, not the relationship between 2 banks IBOS products & related agreements have been designed to meet the needs of corporate customers. Pricing not dependent on interbank flows. No measurement of reciprocity, or revenue-sharing.

IBOS Value Proposition SERVICES Why is IBOS better than Bilateral Arrangements?   Commitment to cooperation IBOS Association Members have agreed to cooperate with all member banks not just one. The IBOS Service Level is the same for all members. New banks can be introduced to the existing IBOS services relatively quickly. Banks coordinate the full package: customer does not have to do it Customer can access full IBOS services via one member bank. Member banks co-ordinate all aspects & liaise with the receiving bank/s on behalf of the customer. Cuts implementation time. DZero service Movement of full end-of-day available balance. Cut-off time independent. Results posted on today’s statements.

IBOS Value Proposition SERVICES Why is IBOS different to Network Banks? Depth of in country network Full service branch network in the key countries of operation. Represented in key regional centres. Capabilities beyond payments (leasing, pensions, insurance).   Range of in-country services IBOS banks have ability to provide extended services in-country. Handling of paper instruments. Cash and ATM services. Can support both customer service models, decentralised & centralised Branch-level RMs available. Central service in each country. Fully centralized model through Host Bank & IBOS Representatives.

IBOS Value Proposition SERVICES Why is IBOS better than Network Banks? Specialists in country of operation Branch network. Service range. Local relationship management.   Direct integration of retail with treasury solutions DZero & day-to-day operations occur at same bank. No need for overlay. IBOS cross-border solutions as good as Network Bank ones. Every component has scale Banks rank in top 3 per country. Major local payments share. Balance by region & line of business.

IBOS Value Proposition SERVICES Members and Associates – Account-Opening, MT101/103/94ns Austria Bank Austria Belgium KBC Bank NV Brasil Santander Brasil Bulgaria CIBank Canada The Royal Bank of Canada Chile Santander Chile China Bank of Shanghai Czech Republic CSOB Czech Republic Denmark Nordea Bank Denmark A/S Finland Nordea Bank Finland plc France HSBC France Germany Unicredit Bank AG Hungary K&H Bank Ireland Ulster Bank Italy Intesa SanPaolo SpA Unicredit Corporate Bank Mexico Santander Mexico Netherlands KBC Bank NV Nederland Norway Nordea Bank Norge ASA Poland Bank Zachodni WBK Portugal Banco Santander Totta Romania Unicredit Bank SA Russia CJSC Unicredit Bank Slovakia CSOB Slovakia Slovenia Banka Koper Spain Banco Santander Sweden Nordea Bank AB (publ) UK Royal Bank of Scotland UK Bank of Tokyo Mitsubishi UFJ, Ltd US PNC Bank NA Silicon Valley Bank US Bank NA

IBOS Value Proposition SERVICES DZero Account-Holding Banks Live now: Austria Bank Austria Belgium KBC Bank NV Czech Republic CSOB Czech Republic Finland Nordea Bank France HSBC France Germany Unicredit Group Hungary K& H Bank Ireland Ulster Bank Italy Intesa SanPaolo SpA Unicredit Corporate Bank Netherlands KBC Bank NV Portugal Banco Santander Totta Slovakia CSOB Slovakia Spain Banco Santander Live but with “health warnings” on economics: Romania Unicredit Bank SA   Live shortly: Poland Bank Zachodni WBK

IBOS Value Proposition SERVICES What type of customers does it appeal to and why? Almost totally decentralised Full service branch network in the key countries of operation. Capabilities beyond payments (leasing, pensions, insurance). Central customer can get reporting and Relationship Management   Centralised Treasury/Decentralised AP & AR Comprehensive in-country payments service, and in-country liquidity solutions Maintaining central Treasury accounts Information reporting for Treasury through the Host Bank MT101 service or DZero to move funds from local accounts to Treasury Accounts Regional Shared Service Centre For Nordics, for Iberia, for Germany/Austria.. Using the file transfer mechanism of the local IBOS member Plus all that services Centralised Treasury

IBOS Value Proposition SERVICES Sales Process positioning Extension of our bank’s capabilities IBOS is a component of our Managed Network IBOS is structured along the same lines as a bank manages ICM though its own units Same processes and controls, and the same people in our bank do it   Use of IBOS as and when customer needs requires it Depends on customer business model and organisation The aim is to do everything within a single framework for electronic banking, Relationship Management and customer service Quality Assurance Detailed Service Level agreements on set-up processes and on all services once in production Non-Compliance Tool for instances of deviation from the Service Level Procedures for IBOS Office to pursue those deviations and resolve them Escalation to the IBOS Board Depth and breadth A lot of countries with large presence Full service with high scale for each component

IBOS Value Proposition SERVICES RFP Handling IBOS business model allows many parts of an RFP to be answered with a solid response Let’s refer to the AFP’s Standardized RFP for Global Treasury Services Certain elements will be for the Host Bank alone On the other hand there are many parts that relate to the international network of the Host Bank These can be filled in with confidence Because IBOS is robust Because the answer regarding IBOS from a Host Bank will be very similar (if not identical) to what it answers regarding its own units and how they are managed Which means IBOS partners fit seamlessly into the Host Bank’s ‘Managed Network’  

COVERAGE The IBOS global banking network provides international coverage with market-leading on-the-ground services in each country, through our unique alliance of some of the world’s largest banks. The IBOS service is growing all the time. We currently operate across 70% of the world, including throughout Central, Eastern and Western Europe, North and South America, and China.