The Co-operative Financial Services

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Ariel Underwood
8 years ago
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1 The Co-operative Financial Services 16 June 2009 Bob Burlton, Chair of CFS UK Principal, ACT! Addressing the Climate Threat, Co-operatives Europe

2 Content Our performance and the economic climate Our difference purpose and vision CFS ethics and brand Looking ahead - merger with Britannia Building Society 2

3 Weathering the Storm Over the second half of 2008, financial markets have experienced the most turbulent conditions for 70 years but we are much better placed than many competitors to weather the storm Consumer trust No shareholders Funding lending through deposits 3

years but we are much better placed than many competitors to

4 2008 Performance - Key Vision Measures Sustainable Business Customer Satisfaction Profits Costs Colleague Satisfaction Income Corporate social responsibility Bad Debt Sales Membership growth 4

5 2008 Performance - Key Vision Measures CFS produced a solid set of results for 2008, positive outcomes across all our key vision measures Sustainable Business CFS shareholder profit was 147.0m (2007: 155.4m) L&S new business profit on plan Customer satisfaction Retail Bank and GI beat top 5 and L&S in line with industry Colleague satisfaction L&S maintenance costs better than plan Record dividend to Co-operative Group of 72.1m to support member dividend and social goals programme 64% engagement score (2007: 53%) Social responsibility BiTC company of the year highest ranked FS company in Sunday Times Best Green Companies Award Membership Growth 144k new CFS members (33% on 2007) Members central to our relationship model

4m) L&S new business profit on plan Customer satisfaction Retail Bank and GI beat top 5 and L&S in line with industry Colleague satisfaction L&S maintenance costs better than plan

6 Awards 2008 Moneywise Mortgage Awards Best Remortgage & Best First Time Buyer Highly commended for Best flexible mortgage BBC Watchdog Consumer Survey on customer satisfaction 2 nd smile 3 rd The Co-operative Bank Which? smile Best buy current account provider and highest customer satisfaction score JD Power The Co-operative Bank, Best Customer Service Provider The Co-operative Insurance, Best Online Motor Insurance Provider at the Your Money Awards The Co-operative Financial Services took the Financial Innovation Award for Best Corporate Social Responsibility Programme The Co-operative Financial Services was named Company of the Year at the Business in The Community (BiTC) awards

smile Best buy current account provider and highest customer satisfaction score JD Power The Co-operative Bank, Best Customer Service Provider The Co-operative Insurance,

7 Q sales Strong start to the year, with many product lines ahead of Q1 plan. Current Account -> 233% (49% growth on Q1 2008) Packaged Accounts -> 129% Fixed Term Deposits -> 183% Cash ISA -> 214% Personal Loans -> 130% Visa Cards -> 111% Mortgage Applications -> 145% Motor Policies -> 138% The Bank The best bank Home Policies -> 112%

Deposits -> 183% Cash ISA -> 214% Personal Loans -> 130% Visa Cards -> 111% Mortgage

8 The crises we face What (economic) climate are we in? Economic! Climatic!

9 The crises we face have common roots What (economic) climate are we in? Economic! Climatic! Living beyond our resources Greed, short-termism and a lack of social responsibility

10 The Co-operative Financial Services - Purpose To be a growing, pioneering financial services business delivering benefits to customers, members and communities through commitment to value, fairness and social responsibility 10

delivering benefits to customers, members and

11 Our Vision and Measures To be the UK s most admired financial services business Profitable and sustainable business UK s most satisfied customers UK s most satisfied colleagues Market leader in social responsibility Membership growth 11

business UK s most satisfied customers UK s most satisfied

12 Achieving the Vision Base Camp Sept 2006 Single employee package Joined organisation structure Colleague developed values Modernised insurance sales, claims & procedures New bank branches and products Group brand pilots Camp Two Dec 2009 Group brand established Effective selling to tcg members Customer experience transformed Cross-selling culture established Camp One Dec 2007 New Customer Database Customer Promise New Systems for customerfacing colleagues Performance Management embedded Relationship Sales increasing Product & Customer proposition 12

selling to tcg members Customer experience transformed Cross-selling culture established Camp One Dec 2007 New Customer Database Customer

13 The Co-operative Financial Services 13

14 The Co-operative Group Family of Businesses 14

2m member dividends donated to the Community Fund in 2006 Exclusive Members Deals Bringing together regional and

15 Membership Scheme Link minds, acting together and sharing the rewards Payout Pounds for points. Earning memebership CFS rewards through trading with The Co-operative businesses. Sharing your Share - 1.2m member dividends donated to the Community Fund in 2006 Exclusive Members Deals Bringing together regional and national networks of members Member Democracy encouraging members to get involved in running our business. The Co-operative Group has 3 million members. 15

16 Encouraging Members Loyalty Earning membership rewards through doing business with The Co-operative Financial Services 1 point for every 5 held or borrowed on average in Co-operative Bank current or credit card accounts 1 point for every 5 outstanding on a Co-operative Bank loan 1 point for every 10 held on average in a Co-operative Bank savings account 1 point for every 20 outstanding on a Co-operative Bank mortgage 1 point for every 5 borrowed on average in Co-operative Bank flexible loan accounts 500 points for holding a Co-operative Insurance (CIS) home or motor insurance policy 16

every 10 held on average in a Co-operative Bank savings account 1 point for every 20 outstanding on a Co-operative Bank mortgage 1 point for every

17 Membership Payout Trade Points earned Amount earned Spend 10 a week in a food store over a year CFS Spend 1,000 on a holiday with The Co-operative Travel Have a mortgage of 90,000 with The Co-operative Bank 4, Have a motor or home policy with The Co-operative Insurance Total share of Profits* * This example is for illustrative purposes and shows what a member will have typically received for all their 2007 trade when a point was valued at 2.63p. 17

68 Have a mortgage of 90,000 with The Co-operative Bank 4,500 118.

Ethical Values We allow customers to have their say on the issues that matter to them, such as human rights, animal welfare, fair trade, the environment and genetic modification.

18 Ethical Values We allow customers to have their say on the issues that matter to them, such as human rights, animal welfare, fair trade, the environment and genetic modification. Ethical Policy The Co-operative Bank launched its Ethical Policy in A first amongst UK high street banks (and still unique today). The bank will not invest in businesses that operate in areas of concern to our customers. Ethical Engagement Policy The Co-operative Insurance launched its Ethical Engagement Policy in A world first for the insurance industry. As a corporate shareholder the insurance business using its influence to change big companies from the inside 18

The bank will not invest in businesses that operate in areas of concern to our customers.

buildings energy efficient buildings - Solar panel clad tower & Micro

19 Environmental Commitment green products eco insurance, green mortgages, think card green power supply to all major occupancy buildings energy efficient buildings - Solar panel clad tower & Micro windturbines green bank branches beyond carbon neutral Customers Who Care campaign 19

20 The Co-operative Bank Retail Banking Customers 2 million customers 1.49 products held per customer Low risk, affluent over 35 year olds. 60% of customers have been with the Bank for 5+ years. Number 1 High Street Bank for Customer Satisfaction. Products Current Accounts Savings Accounts Loans Credit Cards Mortgages Business Banking 20

60% of customers have been with the Bank for 5+ years.

21 The Co-operative Bank Branches 21

22 smile.co.uk Customers Over 350,000 customers smile customers tend to hold more accounts with us than Bank only customers. Good quality affluent customers. Fun modern brand image appeals to younger age profile. Products Current Accounts Savings Accounts Loans Visa Smile invest High levels of satisfied customers 22

23 The Co-operative Bank Corporate Banking 5,000 relationship managed customers 260 FTE staff 17 Corporate Banking Centres Corporate Business Centre Proposed new sites Customer lending 3.6Bn Customer deposits 2.2Bn 30% market share of the Local Authority Sector 23

24 The Co-operative Insurance Customers Over 3.5 million customers 1.46 policies per customer High proportion of older customers 70% of customers have been with us for 10+ years Products Home Insurance Motor Insurance Protection Life Assurance Pensions Investments Bonds & With Profits ISA s and Unit Trusts Child Trust Bonds Commercial Insurance 24

25 Working with the Food Business A pilot scheme was launched in May 2008 to test banking facilities in The Co-operative Food stores. Each of the four pilot sites offer a combination of the following. The Co-operative Bank Contact Point ATM * Self serve deposit machines * Free phone banking kiosk * Product leaflets * Electronic information kiosks Staffed meet & greet presence * All pilot stores 25

26 Britannia Merger Most diversified mutual Scale & financial strength Member-led business Strategic & culture fit 26

27 CFS purpose & vision used to assess merger

28 Coverage by the Financial Times Plenty of shareholders in storm-tossed banks must look to the calm waters of mutuality with envy. Just as they seem to face a choice between oblivion or disaster, Britannia Building Society and Co-operative Financial Services have laid out plans for a merger to create a so-called "super-mutual", immune to the vagaries of the stock market. If the mutuals weren't so nice about it, you might accuse them of deliberately mischievous timing.

29 ..and by..the Sun

Transforming our customer experience. The Co operative Financial Services Building a better society Financial Statements 2010.

The Co operative Financial Services Building a better society Financial Statements 2010 Transforming our customer experience. Part of The Co operative Group good with money To me the compelling co-operative