FöreningsSparbanken Birgitta Johansson-Hedberg - President and CEO
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FöreningsSparbanken
Birgitta Johansson-Hedberg
President and CEO
2
Customers - the most valuable asset
Private individuals Municipalities (289)/County
• FSPA 4.2 million customers councils (21) in Sweden
• Jointly owned 0.4 million customers • FSPA 215 municipalities *
• Independent 1.3 million customers • Jointly owned 20 municipalities
• Hansabank 3.6 million customers • Independent 93 municipalities
• FSPA 21 county councils
FöreningsSparbanken
Small/midsized companies Nationwide organizations
• FSPA 238,000 companies • Union, cooperative and religious
• Jointly owned 25,000 companies organizations
• Independent 93,000 companies
• FI-Holding 5,000 companies
• Hansabank 141,000 companies
Large companies
* Several municipalities are customers of both FSPA and jointly owned or
independent savings banks3
A strong market position – Sweden
Savings and investments Salaries and payments
1st household deposits 1-2nd direct salary deposits
1st mutual funds 1-2nd giro payments
3rd fund-allocated insurance, 1st card clearing
(new policies) 1st debit cards
1st individual pension savings
3-6th stock trading
Meeting places
1st premium pension savings
1st branches
1st internet banking
1st telephone banking
Corporate market 20-30 percent 1st ATMs
• deposits
• lending Housing
• instalment financing 1-2nd mortgage loans
and leasing
1-2nd real estate brokerage4 Nordic/Baltic region • 1,171 branches • 2,001 ATMs • 348 in-store banks • 9.5 million retail customers • 500,000 corporate customers • Banking by Telephone 2 million customers are connected • Banking by Internet 1.9 million customers are connected (Figures include independent and partly owned savings banks in Sweden)
5
Business going in the right direction
despite economic turmoil
• Lending • Telephone bank
– Strong increase in household – Sales focus - increase in
mortgage lending, + SEK 5 bn number of transactions and
in Q3 customer contacts, settled
transactions up 15 percent
• Payments
• Internet bank
– Card purchases rose by 21
percent, cleared card – Continued growth in number of
transactions up 28 percent customers and transactions
• Savings • Alliances
– Income rising and costs
– market share for new declining at Hansabank
household deposits rose to 23 – Stable development at FIH
percent in Jan-Jun (12)6
Financial targets
• Return on equity to exceed the weighted average for SEB,
Handelsbanken, Nordea, Danske Bank and Den Norske
Bank (currently yes)
• Capital adequacy ratio of at least 10.5 %
(currently 10.9%)
• Primary capital ratio between 6.5 and 7.5 %
(currently 7.1%)
• Average loan loss ratio of not more than 0.5 % over
a normal business cycle (currently 0.24%)
• C/I ratio of not more than 50 % (currently 62%)
• Dividend payout ratio shall amount to at least
30 % of net profit (56% in 2001)7
Vision 2005
• To be a leading universal bank in the Nordic-Baltic region
with growing economies of scale across national borders
• To be the natural banking choice for most businesses and
people throughout their lives
• To be regarded as a “bank of opportunities.” Easy to reach,
competent financial advisors and customer-oriented, easily
accessible range of financial services
• 99% of business decisions to be made locally
• Combine a long tradition with a strong innovative drive
• Continue to pursue long-term cooperation with partly owned
and independent savings banks. Increased focus on
business collaborations and joint marketing efforts8
FöreningsSparbanken’s priorities
1. Satisfied
customers
5. Competence 2. The branches
3. Cost
4. Growth
efficiency9
Priorities
5. Competence 1. Satisfied 2. The branches
customers
3. Cost
4. Growth
efficiency10
Important improvements
• Day-to-day needs
– Sweden’s best salary account
– Competitive interest rates on deposits
– New e-savings account
– e-card
– Elimination of withdrawal fees
• FöreningsSparbanken Privat
– Advisory services currently offered in
30 locations
– New segment head appointed
• Corporate sector
– Focus on midsize corporates
– New segment head appointed11
FöreningsSparbanken is the best in
meeting day-to-day financial needs
Basis: Main bank’s customers, cumulative three-month data
Monthly results June-September 2002
100%
90% 80% 79%
80% 75%
71%
70%
60%
50%
40%
30%
20%
10%
0%
FSPA Nordea SHB SEB12
We are now rated best in
savings/investments
Basis: Main bank’s customers, cumulative three-month data
Monthly results June-September 2002
100%
90% 84%
80% 78%
80% 74%
70%
70% 62% 61%
60% 53% 53%
49%
50%
40%
30%
20%
10%
0%
FSPA Nordea SHB SEB Others
Best savings/Investment terms Main bank/company for savings13
Customer commitment profile
FSPA ranks second in Europe in SSSB survey
SHB
FSPA
HSBC
SEB
Nordea
Dexia
BoIreland
RBOS
ING
Danske
Lloyds
DnB
Fortis
Soc.Gen.
60 40 20 0 20 40 60 80 100
Convertible Shallow Average Entrenched
Source: Taylor Nelson Sofres and Schroder Salomon Smith Barney14
Number of products per customer
– private customers
Number of customers
1 000 000
Avg. no. of
800 000 products in
Sweden
12/00 – 3.44
600 000
3/01 – 3.69
6/01 – 3.68
9/01 – 3.74
400 000
12/01 – 3.84
3/02 – 3.84
6/02 – 3.89
200 000
9/02 – 3.98
0
1 2 3 4 5 6 7 8 9 10 > 10
6/02 9/02 Number of products per customer15
Good foundation for continued
success
• Strong local presence and high level of
accessibility
• Good reputation through active participation in
community and business development locally
and nationally
• Improved customer satisfaction16
Priorities
1. Satisfied
customers
5. Competence
2. The branches
3. Cost
4. Growth
efficiency17
The branch network
• The hub of our operations
• From back office to front office
• Personal service is everything
• Closeness to the customer a key in
uncertain times18
The Bank in Sweden
The widest branch network of
any Swedish bank
• 857 (870) branches
• 328 (305) in-store banks
• 1,203 (1,310) post offices
• 1,129 (1,125) ATMs
Including jointly owned and independent
savings banks (Figures in parentheses
refer to December 2001)19
FöreningsSparbanken is Sweden’s
most accessible bank
1 000 936
857
800
600
459
400
270
207
200
0
FSPA* SHB SEB Nordea S+S+N
Number of branch offices
*) including independent savings banks20
FöreningsSparbanken’s customers
are changing the way they act
January-September 2002
• Number of teller transactions
– 15.5 million (18.3) – a decrease by 15 percent
• Number of card purchases
– 110.8 million (68.4) – an increase by 62 percent
• Number of internet payments
– 34.8 million (16.9) – an increase by 106 percent
(Figures in parentheses refer to January-September 2000)21
Branch strategy
• Meet more customers - the mass-affluent should have a
contact person and have received financial advice
before year-end
– All customers with over SEK 250,000 in investments
– Half of all with monthly incomes over SEK 20,000
• Long-term focus and persistance
– Systematic approach to sales and marketing
– Segmentation and own developed CRMtools - business support
• Accessibility and personal service
– Extended branch hours
– Professionals with the right competence to assist customers22
Booked client meetings rise sharply
Booked meetings, weekly average
25 000
20 000
15 000
10 000
5 000
0
Q1 Q2 Q3 Q4E23
Market share of total new savings*,
Swedish market
20%
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
1999 2000 2001 200209
*) deposits from household customers, mutual funds, unit-linked insurance from
all customer categories, retail bonds and equity linked bonds24
Priorities
1. Satisfied
customers
5. Competence 2. The branches
3. Cost effiency
4. Growth25
Cost development
SEK M
4 500
Kopparmyntet 667 SEK M
4 000
3 500
3 000
2 500
2 000
Q3/00 Q4/00 Q1/01 Q2/01 Q3/01 Q4/01 Q1/02 Q2/02 Q3/02
Total expenses
Expenses excl. allocation to Kopparmyntet, surplus pension insurance
refund from Alecta, staff reduction and merger costs
Expenses excl. FI-Holding, Hansabank, allocation to Kopparmyntet, surplus
pension insurance refund from Alecta, staff reduction and merger costs26 Increased operational efficiency • Redistribution of resources from shrinking markets to growth markets and from administration to sales • Implementation of staff reduction program and central functions project • Standardization and systemization of retail procedures/routines • Activities to speed up transition from cash payments to card payments • More efficient processes in the interface between local banks and central units • Partnerships to enhance production efficiency
27
Cost efficiency
• Staff reductions
– 500 staff affected, SEK 200 M cost reduction on
annual basis as of 2004
– Central functions - head office, SEK 100 M on
annual basis
– Cost savings program at Swedbank Markets
• Migration of routine transactions to electronic
chanells
• Implementation of more efficient routines, eg
the handling of loan applications28
Priorities
1. Satisfied
customers
5. Competence 2. The branches
4. Growth
3. Cost
efficiency29 Growth in Swedish business • Payment services • Customer segment-focused sales efforts • Stockholm and other growth regions • Pension and insurance area, including small business segment
30 Segment-focused customer approach - Sweden • FöreningsSparbanken Privat (affluent customers) • Mass affluent customers • Mass market customers • Midsized corporate clients
31 FöreningsSparbanken Privat • Private banking services in 30 regional centers • 75 advisors in place - eventual target approx. 150 • 80% certified before March 2003 (rest by June 03) • Total no. of customers: 7,000 • Total business volume: approx. SEK 10 bn • Customer pays an annual fixed fee in addition to transaction fees
32 Focus on midsize corporates • Focus on prospecting • 100 new advisors for mid-corp clients and prospects • Team of specialists to support advisors • Launch in Q3, 2002
33
No. of cards in issue, purchases
No. of cards and acquiring Transactions,
thousands
5 000 000 90 000
4 500 000 80 000
4 000 000 70 000
3 500 000
60 000
3 000 000
50 000
2 500 000
40 000
2 000 000
30 000
1 500 000
1 000 000 20 000
500 000 10 000
0 0
Q3- Q4- Q1- Q2- Q3- Q4- Q1- Q2- Q3- Q4- Q1- Q2- Q3-
99 99 00 00 00 00 01 01 01 01 02 02 02
FöreningsSparbanken Hansabank
Purchases, thousands acquiring, thousands34
Purchasing factor - cards
Number of payments per card, customer and
month is rapidly increasing
8,0
6,9
7,0
5,9
6,0
4,9
5,0
4,1 4,3
4,0
3,0
2,0
1,0
0,0
1998 1999 2000 2001 2002E35
Focus on growth regions
in Sweden
• Stockholm
– Acquisition of HSB Bank strengthens market position
and reinforces focus on the country’s most important
mortgage market
– Enhance and recruit in branch operations
• Gothenburg and Malmö
– Concentration on branches for corporate client services
– Focus on advisory services in FöreningsSparbanken
Privat36
Continued growth -
Nordic/Baltic region
• Continued expansion in the region through a
combination of acquisitions and further development of
alliances
• Further development of existing operations has higher
priority than entry into new markets
• In Baltic states, the integration of Hansa-LTB is the
highest priority. The focus is on a growth strategy that
retains risk controls
• Ownership in FIH increases to 100% by 2005 in
accordance with current agreements
• Norway and Finland37
Hansabank - operating profit
SEK M
400
350
300
250
200
150
100
50
0
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2000 2000 2000 2001 2001 2001 2001 2002 2002 2002
Operating profit38
FIH - operating profit
SEK M
400
350
300
250
200
150
100
50
0
Q3 2000 Q4 2000 Q1 2001 Q2 2001 Q3 2001 Q4 2001 Q1 2002 Q2 2002 Q3 2002
Operating profit39
Priorities
1. Satisfied
customers
2. The branches
5. Competence
3. Cost
4. Growth
efficiency40
Competence scale-up
• Continuous upgrade of competence, primarily in
sales and professional skills
– licencing and certification
• Implementation of structured work routines and
clear professional roles in the Swedish branches41
Licensing
-An external quality assurance
Purpose: Scope:
• Ensure a high level of • 601 people will be
basic competence licensed by December
among employees in the 31, 2003
Swedish securities • 250 people currently
market have ”perpetual licenses”
• Adapt to demands that • 220 people to date have
apply in other countries completed approved
licensing test given by
SwedSec AB42
Certification
-An internal quality assurance
Purpose: Scope:
• Uniform level of • Initially advisors in
knowledge and FöreningsSparbanken
professionalism assured Privat
among the bank’s • Total of approx. 1,200
personal financial advisors in FSPA and
advisors in their dealings approx. 500 FSR
with customers • Certification for corporate
• Increased customer advisors begins during
satisfaction spring 200343 Total training costs 2000-2002 SEK M 2000 2001 2002E Total training 89 142 160 Overhead 29 47 50 Time 72 108 125 Total 191 297 335
44
Priorities
1. Satisfied
customers
5. Competence 2. The branches
Summary
3. Cost
4. Growth
efficiency45
A stable platform for future growth
and increased customer value
• Largest customer base of all Swedish banks
• Leading position in Sweden thanks to extensive
branch network and complete electronic channels
• Increasing customer satisfaction by efficiently
segmenting the customer base and improving
customer offerings
• Proven track record of cost control
• Improved competence among employees
• Good scope for continued growth in Sweden,
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