Build the Private Bank

Transcription

1 Build the Private Bank Hugues Delcourt Head of Antonveneta Private Banking ABN AMRO Antonveneta Investor Day Padua, 11 December 2006

2 Agenda Market outlook Description of Antonveneta business Ambitions Action plan 2

3 Italian Private Banking market sizable and growing faster than European average European Private Banking asset growth CAGR E Percent Assets* of individuals with > EUR 1.0 mln of Personal Financial Assets (PFA) EUR bln Spain Netherlands CAGR +6% ~415 Belgium 7 Italy 6 Germany E France UK 3 3 Average 5 Growth drivers Higher saving potential and aging of population New personal financial assets from IPOs and companies transfer Investments in higher return/more sophisticated products * Only onshore markets Source: Banca d Italia; Prometeia; Magstat (Il private banking in Italia); Merrill Lynch (World Wealth Report 2005) 3

4 In Italian Private Banking market high concentration of High Net Worth Individuals Market segmentation of individuals with > EUR 1.0 mln of Personal Financial Assets (PFA), 2005 Total PFA EUR bln Number of families UHNWI (>EUR 25 mln) VHNWI (>EUR 5-25 mln) HNWI (<>EUR 1-5 mln) % 36.0% 52.0% 198, % 92.0% High concentration on High Net Worth Individuals, representing 52% of total assets 92% of total number of families Note:UHNWI Ultra High Net Worth Individuals, VHNWI Very High Net Worth Individuals, HNWI High Net Worth Individuals Source: Banca d Italia; Prometeia; Magstat (Il private banking in Italia); Merrill Lynch (World Wealth Report 2005) 4

5 Italian Private Banking ROA lower than European average, despite similar asset mix Private Banking Return On Assets (ROA) decomposition* 2005, bps Italy European average Investment Lending 2 10 Insurance structuring 7 6 Total revenue margin * Investment includes funds, discretionary product mandates and securities; Lending includes mortgages and personal loan; Insurance structuring includes life and unit linked products. Source: Associazione Italiana Private Banking (AIPB) 5

6 5 different business models in the market Business model Retail Bank Description No differentiated PB service PB clients served in the retail bank Examples Universal Bank with specialised PB offer Niche Player Dedicated service model with different levels of specialisation (from a business unit to a separate private bank) Boutique with long sector experience, specialized in tailormade portfolio management International Bank FAs network with a PB division Source: Magstat Recent entry in the market with specialised service model, mainly focused on specific target clients (VHNWI or UHNWI) Aggregation of financial advisors focused on HNWI segment 6 PB specialized players

7 The market share of specialised private banking players has exploded in the past years PB specialised players, % 100% 100% 30% 64% Retail bank 97% 11% 70% 18% 7% PB players 3% 1998 Assets* 2005 Assets* Assets of PB players Universal banks with specialised PB offer International banks Niche players** FAs networks with a PB division * Calculated considering clients with >EUR 500,000 assets ** Including Family Offices Source: Magstat 7

8 Recap of top 10 competitors in the Italian Private Banking market 2005 Rank Player Total assets EUR bln Assets/RM EUR mln Assets/client EUR mln Average # clients/rm Number 1 Unicredit PB Sanpaolo PB Banca Intesa PB BPU PB Fideuram 19.0 N/A N/A N/A 6 MPS Banca Intermobiliare N/A N/A 8 UBS Deutsche Bank Credit Suisse N/A 91 Source: Magstat 8

9 Agenda Market outlook Description of Antonveneta business Ambitions Action plan 9

10 Antonveneta presence concentrated in the top 5 regions accounting for ~60% of the market Italian Private Banking market asset distribution Percentage of total market <1 8 3 Piemonte <1 Lazio Lombardia 2 Veneto Emilla Romagna % of Antonveneta assets in top 5 regions of which, 75% in the North, where core Private Banking market is PB Division will build on strengths it already has in the North 2 5 Wealth concentrated in top 5 regions However, within regions, wealth is not as concentrated in towns as it is in the rest of Europe leading to coverage model issues Source: Associazione Italiana Private Banking (AIPB) 10

11 Antonveneta has potential to increase its revenue margin Italian Private Banking asset mix and profitability 2006, EUR bln, percent, Bps AuC AuM Cash % 49% 12% Italian market % (3.6) 33% (2.6) 22% (1.8) Antonveneta Estimated Antonveneta revenues margin Bps Weighted average Italian Private Banking revenues margin on assets 2006, Bps 72 Italian market average 52 Antonveneta Several levers to exploit in order to increase Antonveneta revenue margin Re-alignment of asset mix to market average Re-alignment of rebate from asset management products to market average Increase of asset rotation via structured investment advisory process Source: Antonveneta P&C, AAA Bank P&C 11

12 Antonveneta qualifying Private Banking base accounting for 3,800 clients and EUR 8.0 bln of assets 2006, pro-forma Antonveneta* assets and clients Key indicators UHNWI (>EUR 25 mln) VHNWI (>EUR 5-25 mln) HNWI (<>EUR 1-5 mln) 100% = 8.0 5% 23% 72% 3,800 0% 6% 94% Return On Asset (ROA) ~ 52 Bps Asset mix more skewed on AuC (45%) than market average (39%) Total qualifying assets of EUR 8.0 bln, of which EUR 7.0 bln initially served by PB Division Total qualifying households** of ~3,800, of which ~3,500 initially served by PB Division Assets EUR bln Number of clients** * Includes also AAA Bank assets and clients ** Households, i.e. individuals or groups with PFA > EUR 1.0 million 12

13 Agenda Market outlook Description of Antonveneta business Ambitions Action plan 13

14 Ambitious but realistic growth target for Antonveneta Ambition and mission Strategic aspirations Ambition: Mission: To be one of the most recommended private banks in Italy To grow wealth and wellbeing for our clients and our employees Growth target Reach ~EUR 15.0 bln of total assets within 5 years organically Distinctiveness Deliver a true client-centric model founded on A dedicated Client Service Team approach A distinctive Investment Advisory Process leveraging cooperation among Divisions and taking advantage of ABN AMRO Private Banking global experience Talents Invest in developing in-house talents (and few selected professionals recruited from the market) by offering unique career and development opportunities whilst applying the highest standards of compliance in line with ABN AMRO Group 14

15 ~EUR 15.0 bln of assets organic growth target by 2011 Total assets, EUR bln Base case Inertial growth driven by the market* Optimization Increment from Return On Asset (ROA) increase Share of wallet** (SOW) increase Organic growth Target Increment from Client acquisition*** Recruiting of Private Bankers Opening of new branches Base case Inertial growth driven by the market* Optimisation Increment from Return On Asset (ROA) increase Share of wallet** (SOW) increase Organic growth Target Increment from Client acquisition*** Recruiting of Private Bankers Opening of new branches * Assuming an average asset growth of 4% over the period and EUR 7.1 bln initially served in 2007 ** Assuming increase of 6% SOW on existing clients over the period , driven by dedicated service model and structured investment advisory process *** Assuming ~ 3,700 new clients acquired over the period

16 Private Banking key P&L indicators RoA Bps Operating income* EUR mln x x E 2006* 2008E Note: All P&L of PB clients to PB Division from Jan 2007 only for areas directly served by PB Division, accounting for EUR 6.4 bln of PB clients assets corresponding to 3,224 households * 2006 is September 2006 YTD (EUR 25 mln) annualised 16

17 Agenda Market outlook Description of Antonveneta business Ambitions Action plan 17

18 4 pillars at the base of our growth strategy 1 Client 2 Offer and delivery Client focused approach Main target clients EUR 1-5 mln of assets Dedicated Private Wealth Management Team for serving clients with PFA >EUR 25 mln Client service team approach Dedicated Private Banking Units Wide range of Private Bank products and services Open architecture 3 Group synergies Importance of feeder channels through Consumer and Commercial Divisions Best evidenced by ABN AMRO Private Clients Netherlands 4 Customer experience Leverage on Antonveneta and ABN AMRO brands heritage Enhancement of client reporting and communication 18

19 Client service team: The pillar of our model 1 Relationship Manager Fully responsible for client relationship/satisfaction Investment Advisor Relationship Manager Client Investment Advisor Responsible for translating strategic guidelines into client s portfolio solutions Account Manager Account Manager Supports Relationship Manager in daily business 19

20 Our client served via dedicated Private Banking Units 2 Proposed Private Banking units PB units characteristics Monza Milano Torino Genova Bologna Roma Cittadella Udine Vicenza By Dec, 2007 Potentially in 2009 Treviso Padova Ancona Venezia Bari Separated and exclusively dedicated to Private Banking clients Located close to consumer branches (and to commercial offices, when possible) in order to leverage existing infrastructure On top of pure PB services, offering of all basic banking services with the support of the close-by consumer branch Lead by 1 Branch Manager also acting as a Relationship Manager Napoli Taranto Catania 20

21 How to make synergies work? Benefits PB Division provides to Antonveneta Benefits PB Division receives from the Group 3 To Antonveneta as a whole Increased visibility and reputation Specific expertise delivered via training Additional career opportunities for Group staff To the Consumer Division Investment perspectives and recommendations Product development To the Commercial Division Extension of products/services scope to business owners Feeding of PB client base by providing access to other prospect clients Transactional services from Consumer Division Strong positioning of the Group in selected areas/markets Access to global ABN AMRO network and capabilities Synergies stimulated and monitored via specific incentives Referral incentives programme with other Divisions >100 clients/year from Consumer Division >70 clients/year from Commercial Division Buddy programme between Private Banking and Commercial Divisions Intensive internal training and road show 21

22 Private Banking units reflecting ABN AMRO Private Banking look and feel 4 22

23 Reasons underpinning our future success 1 Relationship manager Client Investment advisor Account manager Drivers of success Client-centric view Team approach Innovative service model balancing both international best practices and local needs ABN AMRO Private Banking Well-recognized brand combining both local and international flavour Market leadership in key areas of the country Strong relationship with business owners Right people with right skills (coming from Antonveneta, AAA, ABN AMRO and market) Strong investments in human capital 4 5 Culture and reward system designed around the client and its profitability for the Bank Disciplined execution and rigorous monitoring of processes Well-defined implementation roadmap Leverage of capabilities and best practices of ABN AMRO Private Banking Full exploitation of Group synergies via incentive programs Share of goals with Consumer and Commercial Divisions Structured internal communication plan 23

24 Phased approach at implementing the plan Establish division and basic footprint Expand footprint and optimise existing customer base Drive for market leadership Step-by-step approach in order to concentrate efforts, test solutions, reduce risks, consolidate results, and adequately train people Strategy consistent with the progressive staffing of PB division overhead 24

25 Conclusions 1 Sizeable and growing market 2 Antonveneta has strong starting position, which will enable us to capture a part of this market 3 Phased and structured implementation 25

26 Cautionary Statement regarding Forward-Looking Statements This announcement contains forward-looking statements. Forward-looking statements are statements that are not historical facts, including statements about our beliefs and expectations. Any statement in this document that expresses or implies our intentions, beliefs, expectations, forecasts, estimates or predictions (and the assumptions underlying them) is a forward-looking statement. These statements are based on plans, estimates and projections, as they are currently available to the management of ABN AMRO Holding N.V.. Forward-looking statements therefore speak only as of the date they are made, and we take no obligation to update publicly any of them in light of new information or future events. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could therefore cause actual future results to differ materially from those expressed or implied in any forward-looking statement. Such factors include, without limitation, the conditions in the financial markets in Europe, the United States, Brazil and elsewhere from which we derive a substantial portion of our trading revenues; potential defaults of borrowers or trading counterparties; the implementation of our restructuring including the envisaged reduction in headcount; the reliability of our risk management policies, procedures and methods; changes resulting from the acquisition of Banca Antonveneta, including the risks associated with its business, as well as the difficulties of integrating its systems, operations functions and cultures with ours; and other risks referenced in our filings with the U.S. Securities and Exchange Commission. For more information on these and other factors, please refer to our Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission and to any subsequent reports furnished or filed by us with the U.S. Securities and Exchange Commission. The forward-looking statements contained in this announcement are made as of the date hereof, and we assume no obligation to update any of the forward-looking statements contained in this document. 26