The Canadian Landscape

Transcription

1 The Canadian Landscape Jim Rager Vice-Chairman

2 Undisputed lead provider of integrated financial services in Canada Ensure strong revenue growth in Canada Create a differentiated customer experience Continue and reinforce our cost management and risk mitigation focus Leverage cross-platform synergies 8

3 Customer demographics and industry trends Aging population with increased longevity Canadian customers are increasingly sophisticated and financially savvy customers and are early adopters of technology Small business is the engine of growth in the Canadian market Increasing specialization of financial services providers New technologies provide leading edge banking infrastructures Globalization and changing regulation increasing competition Volatility of business and economic environment 9

4 RBC Banking challenges Key challenges facing RBC Banking Mature, competitive environment in Canada Strong competition from traditional domestic and increasingly mono-line and global competitors Market is relatively undifferentiated in customer satisfaction and loyalty 10

5 RBC Banking Canadian distribution ON-LINE BANKING 1.8MM Internet clients BRANCH NETWORK 1,120 branches 7,100 Personal Financial Service Representatives / Managers and Account Managers - Personal Banking and Investments 1,500 Business Account Managers 9,500 Customer Service Reps/Assistance Officers FINANCIAL ADVISORS 1,100 in-branch Financial Planners 550 Investment Retirement Planners 700 Commissioned Mortgage Reps TELEPHONE BANKING 7MM calls per month 2,300 telephone representatives 11 ATM / POS 2,500 on-site ATMs 1,650 off-site ATMs 75% of clients with client cards

6 Channel preference Transaction volume by channel Almost 95% of transactions now occur outside the branch network and are conducted through lower cost channels Transactions / year (MM) Annualized Branch ABM Telephone Internet Credit Debit Note: 2002 transaction volumes are based on annualized information not a forecast. 12

7 Valued branch network Over 70% of our customers still visit the branch at least once every quarter Branches remain particularly important to our premium customers Front-line staff count has remained stable as we moved to improve efficiency with any employee reductions being concentrated in backoffice functions RBC has committed to adding 450 new employees to the branch network by early 2003 in addition to an investment of $35MM in branch upgrades over 3 years 13

8 RBC Banking competitive net income performance Q Highest retail banking earnings $400 $377 $54 Net Income ($MM) $300 $200 $100 $179 $255 $262 $282 $323 $0 CIBC BMO BNS TD RY Total RBC Banking Canada Other RBC Banking (U.S. & Carribean) All figures in Canadian GAAP. CIBC includes Retail Products, Retail Markets and Amicus (which excludes GICs which are included in Wealth Management and are not broken out separately). BMO includes Personal & Commercial Client Group (which includes Harris Bank). BNS includes Domestic Banking (which includes Wealth Management). TD includes TD Canada Trust (which includes Insurance). Net income reported on cash basis. Excludes special items. 14

9 RBC Banking - Canadian performance Efficiency (%) 68.4 $1.52 Revenue ($B) $ NIE ($B) $0.95 $0.86 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q NIAT ($MM) Av. Equity ($MM) ROE (%) $166 $173 $206 $219 $228 $243 $257 $300 $271 $301 $257 $301 $314 $295 $328 $3,974 $4,003 $4,119 $4,394 $4,801 $4,688 $5,093 $4,858 $4,761 $4,756 $4,953 $4,945 $4,196 $3,992 $3, % 16.6% 18.7% 18.7% 17.8% 20.0% 18.9% 23.5% 21.5% 24.9% 19.5% 23.1% 29.2% 30.0% 33.5% U.S. GAAP 15

10 RBC Banking strengths Full service distribution channels Bundled product capabilities Cross platform referrals create unique customer-centric solutions Proven cost reduction and large project management capabilities with the best domestic efficiency ratio of the major Canadian banks Our customer centric model: focused on profitably serving the customer relationship as opposed to a product centric view based on traditional market share measures 16

11 RBC Banking strategic vision To grow profitable relationships with each one of our business and personal clients by: Creating a tailored client experience with our customers across North America Reducing costs Effectively managing risk and capital 17