1. Commercial strategy in Slovakia
RETAIL BANKING
Banca viitorului într-o Europa largita Strategii pentru inovatie si crestere
Commercial strategy in Slovakia
Marc Lauwers
Bucuresti, 29 iunie 1

2. Agenda Dexia Dexia Banka Slovensko (Turbo) Retail Strategy Conclusions
Questions

3. Agenda Dexia Dexia Banka Slovensko
(Turbo) Retail Strategy: key elements
Conclusions
Questions

4. Dexia at a glance Total Assets (31.12.04) €389.0bn
Total Shareholders’ Equity
€10.5bn
Tier 1 Ratio
Net Profit
€1.8bn
ROE
Based on 2004 consolidated financial statements (under Belgium GAAP)
CAGR Earnings Per Share
11.5 %
19.8%
10.7%
AA+
Rating
€20.6bn
Market Capitalization ( )
20.6
13.8
9.7
23.8
36.0
HVB
Erste Bank
KBC
Deutsche Bank
# 14
Comparison on european level

5. Dexia at a glance # employees 24,019 Presence in # countries
also in Romania 22
As at
Business portfolio
Net income for 2004 (excl. central Assets)
Public/Project
Finance & Credit
Enhance-
ment
53%
Treasury & Financial Markets
11%
Investment Mngt
& Insurance Services 14%
Personal Financial Services
22%

6. Agenda Dexia Dexia Banka Slovensko (Turbo) Retail Strategy Conclusions
Questions

7. Dexia Banka Slovensko General Profile Governance Staff Financials
Strong focus
Retail : not actively developed
municipalities
utilities / project finance
Branch network
retail
Market share : 3,25%(end 2004) rank 7
Governance
Individuals 2 %
Slovak
municipalities
19 %
Dexia KB 79 %
Staff
Employ.
Branch.
687 50
Financials
Net profit
Total assets
ROE
2002
7.8
628
31.7
2003
8.4
642
20.3
2004
6,8
980
20,0
mio EUR %

8. actively develop retail market
Dexia Banka Slovensko
Turbo Retail
Project
Front-to-back (F2B) =
more time
on commercial
activities
Retail Reflection
redefine
business,
marketing &
distribution
strategy
Objectif 2006
Financial control
First impressions
5 % market share
Retail strategy
Credit Risk Mgt
F.O. / B.O.
ALM
Segmentation
competencies
organization
ABC
margin
missing
instruments
administration
what ?
corporates
in BL2
actively develop retail market

9. Agenda Slovakia Dexia Banka Slovensko (Turbo) Retail Strategy
Conclusions
Questions

10. (Turbo) Retail Strategy
4 Lines
Client
orientation
Internal
organisation
Strategy
Shareholder
value
proposition
Financials

11. (Turbo) Retail Strategy
Line 1 Client orientation
Key observations
Customer value proposition
Customer segmentation
Distribution
Price structuring
Product offering
Brand reputation
Retail Strategy Slovakia 11

12. (Turbo) Retail Strategy
Line 2 Internal organization
Operational efficiency & IT
Key observations
Lack of commercial time
261 / 426 branch employees = active sellers
13 % of total time : commercial activities
47 FTE’s : payment orders
33 FTE’s : cash transactions
Causes of high administrative workload
centralization / decentralization
internal checks & paper load
level of automation

13. (Turbo) Retail Strategy
Line 2 Internal organization
Operational efficiency & IT
Goal
Time for sales activities attract new customers
Portfolio x impact on activities in servicing
How
Front to Back Project improve operational efficiency
more time on commercial activities

14. (Turbo) Retail Strategy
Line 2 Internal organization
Operational efficiency & IT
Time in branches
commercial time : %
13 %
24 %
31 %
100
time freed
by quick wins 11 % 80 87 80
time freed
by medium
term solut.
7 % 76 74 72 69 60 40
Current
Immediat.
centra-
lization
Controls
& paper
loads
Automat. in
MIDAS
Delayed
centra-
lization
Front
office
applicat.

15. (Turbo) Retail Strategy
Line 2 Internal organization
Employee value proposition
Key observations
Recruitment requirements : available
Previous reorganization : best sales moved to 1st BL
Goal
Freed up time for new customers & sales
but commercial staff needs
capacities
tools

16. (Turbo) Retail Strategy
Line 2 Internal organization
Employee value proposition
How
Branch managers & deputies : assessed on
- commercial
- coaching
skills
Recruitment requirements
Training programs
adapted & improved
Benchmark salaries
New commissioning system rewarding sales efforts
Current salary distribution
Individual 13 %
Team 11 %
Fixed 76 %

17. (Turbo) Retail Strategy
Risk
Competitive risk
Retail : competitive
investing from foreign banks
Shortage of available assets in Sl. Market margins
Risk : miss the business volume target
Sales capacity of branches : difficult to achieve
Risk : not to be capable of transforming the opportunity
Execution risk
Executing projects : parallel & successfully
How to mitigate these risks
Dedicated support on group level in all areas touched upon

18. Front Office Managers
Assessment & deputy branch
Qualitative assessment indicated potential problem in our
ambitious goals
Being entrepreneurial / initiative:
Ability to motivate & support
Customer-orientedness
Dexia
average
Clear communication
skills
Goal
orientation
A (16 %)
Ability to start
&
Stress
resistance
keep contacts
C* (11 %)
B (27 %)
Creativity
/ Innovativeness
Loyalty
C (46 %)
Analytical
Organizational
skills
skills

19. Agenda Dexia Dexia Banka Slovensko (Turbo) Retail Strategy Conclusions
Questions

20. Conclusions after 1 year
Competition proved to be very fierce with pressure on margins
Systems to monitor branches largely in place
Training on new IT new products, procedures & organization proved to be main bottleneck

21. Conclusions after 1 year
However : commercial results are rocketing eg credits
production individuals
SME/Corp.
693
6011
163
412
Brand Awareness (BA)
Spontaneous BA DBS
Supported BA DBS
August 2004
May 2005
14%
34,6%
46%
72,4%

22. Conclusions after 1 year
Overall conclusion :
don’t waste time !

23. Agenda Dexia Dexia Banka Slovensko (Turbo) Retail Strategy Conclusions
Questions

24. Commercial strategy in Slovakia
RETAIL BANKING
Banca viitorului într-o Europa largita Strategii pentru inovatie si crestere
Commercial strategy in Slovakia
Marc Lauwers
Bucuresti, 29 iunie 24