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Published byPreston Knight Modified over 9 years ago
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Irish Life & Permanent Acquisition of TSB Bank December 2000 www.irishlifepermanent.ie
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Acquisition of TSB Bank Brand New Bank Permanent TSB Our Vision No. 1 Personal Financial Services Provider in Ireland Acquisition creates a Powerful Competitive Force
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Strategy u“Ireland First” uPersonal Financial Services Sector uCustomer Focus uMulti-channel access uBest in class Bancassurer High quality retail bank a key element
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Acquisition Criteria uBuild retail market position uComplete full retail product range uShared vision uComplementary uAdds to Shareholder Value
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Transaction Highlights Financial uConsideration of €430m –1.9 times NAV –P.E. of 13* uEPS enhancing uRevenue and Cost Synergies *2000 estimated net operating profit
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Transaction Highlights Business uCombined customer base of 1million uLeader in Mortgages - 25%+ Life & Pensions - 20% + uLeading positions in Savings, New Car Finance, Current Accounts uUnrivalled Distribution Mix
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uFull Clearing Bank uStrong positions in Savings & Personal Banking u300,000 customers u1,300 employees u82 bank branches u13 in-store TUSA outlets (JV with leading retailer) u120 own ATMs and reciprocity with over 1,500
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uMarket leader in mortgage lending uStrong positions in Savings, Bancassurance & Car Finance uCapital Markets expertise u450,000 customers u1,500 employees u70 branches and c.90 agencies/franchises uExcellent credit ratings - S&P: A+, Moodys: A1
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Permanent TSB Brand New Bank!
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Permanent TSB - Product Range uCombined product range for combined customer base uBest of both: –Mortgages –Life, Pensions & Investments –Current Accounts –Car Finance –Savings –Money Transmission –Credit Cards
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Permanent TSB Branch Distribution uKey to success uCombined network of c. 110 uOverlap of 40/45 branches uEvaluate branches for best fit uRe-engineering programmes in place –“Vision 21” (IP) –“Branch Reformat” (TSB)
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Permanent TSB non-Branch Distribution Brokers 600 supporting Mortgage Brokers & Intermediaries Agencies 90 agencies & franchises Salesforce 320 strong Irish Life Salesforce In-Store Outlets 13 In-Store outlets, rising to 18 Telephone 24 Hour Telephone Banking Internet Online Mortgages & Personal Banking
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Permanent TSB - Customers uImproved Market Offering –Wider product range –More competitive product offerings –More access points –Improved service levels –New Services Customer base of 1 million within enlarged Group
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A Powerful Competitive Force uMortgages25%+ uSavings12% uCurrent Accounts10% uNew Car Finance20% uLife & Pensions20%+ uTotal Assets>€30bn
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Management & Organisation uHarry Lorton & TSB Trustee (non-exec) to join main Board Group CEO David Went Bank CEO Harry Lorton Dep. CEO & COO Diarmuid Bradley Director of Integration Billy Kane
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Integration Process uJoint Steering Committee chaired by David Went uDirector with responsibility for Integration: Billy Kane uFair, objective and transparent process u“Best of Both” principle will operate uGrowth opportunities for merged organisation Build on success of Irish Life and Irish Permanent merger
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Bank Financials* TSB IP uTotal Assets €2.6bn€9.9bn uLoans & Advances €1.7bn€7.6bn uMortgage Loans€1.3bn€7.0bn uCustomer Accounts €2.3bn€4.7bn uPre-tax profit €39.0m€80.8m uNet assets on transfer €227m *1999 other than net assets
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Financial Benefits uEarnings Enhancing –pre-goodwill –pre-synergies uCost Savings –Branch closures –Integration of group functions –Combined cost base €188m uRevenue Synergies –Sale of life products –Sale of banking products
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Transaction Structure uTransfer of TSB Bank undertaking into IL&P uConsideration of €430m: –85.1% in cash –14.9% in IL&P shares u14.9% in shares allocated to ESOP –Average closing price over last 10 days
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Impact on Capital €m TSB Risk Assets1,400 Support Capital (10%) 140 Goodwill 203 Total Capital Required 343
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Capital Funding €m Capital Required343 Share Buy-back150 493 Financed from: Tier 2 Issue288 Excess Capital140 ESOP Share Issue 65 493
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Completion Process Binding contract with Trustees, subject to: uMinister for Finance approval uEnabling legislation to allow sale uRegulatory clearances Target completion end Q1 2001
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Summary uPermanent TSB - a powerful personal retail bank –More customers –More products –Better access uIL&P - an important strategic step –Best in Class Bancassurer –Powerful competitive force –Increased financial strength –Growing shareholder value
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Brand New Bank Best in Class Bancassurer
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