Corporate Banking - Building on Strong Client Relationships by Peter Lennkh Board Member RI Group

Transcription

1 Corporate Banking - Building on Strong Client Relationships by Peter Lennkh Board Member RI Group Capital Markets Day, September 2008 Slide 1 Corporate Business Development Capital Markets Day, September 2008 Slide 2

2 Stable Backbone of RI s Profitability Profit before Tax Contribution (1-6/2007) Profit before Tax Contribution (1-6/2008) Treasury, Participations and Other 10% 63 mn Retail Customers 37% Treasury, Participations and Other 9% 71 mn Retail Customers 34% 223 mn 288 mn 321 mn 484 mn Corporate Customers 53% Corporate Customers 57% Total 607 mn Total 843 mn RI Group consolidated results. Based on IFRS aggregated business segments. Capital Markets Day, September 2008 Slide 3 Corporate Clients Strong Contribution to Results Average Volumes Corporate Lending ( bn) Average Volumes Corporate Deposits ( bn) 12.7 CAGR: +39% CAGR: +36% Profit Before Tax ( mn) CAGR: +43% RoE Before Tax 31.7% 29.4% 30.2% 28.4% 26.9% /2008 RI Group consolidated results. Based on IFRS aggregated business segments /2008 Capital Markets Day, September 2008 Slide 4

3 Corporate Client Portfolio Well Balanced 40,000 35,000 30,000 25,000 Number of Customers +23% 24,700 20, % 27,000 34,000 Segment Definitions: Large Corporates: companies with annual sales higher than mn Mid Market: companies with annual sales between 5 mn and mn 20,000 15,000 Increasing penetration into the Mid Market segment 10,000 5,000 Still low base in Mid Market, hence, high growth potential in this segment 0 Large Corporates Mid Market RI Network banks only; no other subsidiaries included. Capital Markets Day, September 2008 Slide 5 Corporate Credit Underwriting Capital Markets Day, September 2008 Slide 6

4 Credit Underwriting Principles Focus on customer relationship, domestic market deals, cross-selling and risk/return Defined credit policy for each market Concentration limits for unsecured exposure by Group of Connected Clients (GCC); levels depending on customer rating and GCC size Target portfolios for each market by industry, collateral, FX risk, tenor, etc. Special attention to customers exposed to high FX risk (stress testing) Prudent approach to collateral: conservative valuation, cross-checked by internal experts; internal haircuts depending on the type of collateral Capital Markets Day, September 2008 Slide 7 Diversified Corporate Portfolio Credit Risk Exposure by Region as of 30 June 2008 Number of Borrowers by Region as of 30 June 2008 SEE 22% SEE 31% CE 48% CE 51% CIS 30% CIS 18% Total 37 bn On- and Off-Balance Sheet Exposure Total 15,504 Borrowers RI Network banks; no other subsidiaries included. Only Large Corporate and Mid Market clients. Capital Markets Day, September 2008 Slide 8

5 Portfolio Granularity Improving mn Development of Average Exposure per Borrower 1Q Q Q Q Q Q 2008 On- and Off-Balance Sheet Exposure per Borrower (left scale) Exposure per Borrower as % of total Portfolio (right scale) % % % % % % % % % % % RI Network banks; no other subsidiaries included. Only Large Corporate and Mid Market clients. Capital Markets Day, September 2008 Slide 9 Balanced Industry Mix Corporate Exposure by Industry as of 30 June 2008 Financial 4% Others 8% Energy 1% Utilities 3% Real Estate 17% Consumer Cyclical 10% Industrials 7% Consumer Non-Cyclical 14% Materials 8% Trading 20% Construction 8% RI Network banks; no other subsidiaries included. Only Large Corporate and Mid Market clients. Capital Markets Day, September 2008 Slide 10

6 Prudent Maturity Profile Corporate Exposure by Tenor Bands as of 30 June 2008 > 5 years 17% 3-5 years 11% < 1 year 52% 1-3 years 20% RI Network banks; no other subsidiaries included. Only Large Corporate and Mid Market clients. Capital Markets Day, September 2008 Slide 11 High and Well Diversified Collateralization Corporate Exposure by Collateral Type as of 30 June 2008 Cash 3% Unsecured 37% Real Estate 28% Equipment 6% Inventory & Receivables 17% Guarantees 9% RI Network banks; no other subsidiaries included. Only Large Corporate and Mid Market clients. Based on weighted collateral value (i.e. value after haircuts) Capital Markets Day, September 2008 Slide 12

7 Commercial Real Estate Underwriting Real Estate Exposure by Region as of 30 June 2008 No speculative projects, but focus on: Solid Equity min % CIS 29% Level of pre-leases/pre-sales % Tight structure, prudent collaterals, stringent control throughout the project life-time CE 56% Prime locations, established developers, reputable tenants SEE 15% Balanced mix of Retail, Office, Industrial and Residential projects Total 6.4 bn Projects not only in capitals but also in smaller cities RI Network banks; no other subsidiaries included. Only Large Corporate and Mid Market clients. Capital Markets Day, September 2008 Slide 13 Strengthen the Corporate Business as RI s Backbone Capital Markets Day, September 2008 Slide 14

8 Strengthen the Corporate Backbone via.. FORMULA UNO ENHANCED CRM* TOOL LEASING & FACTORING CORPORATE INVESTMENT BANKING CORPORATE CASH MANAGEMENT CORPORATE TREASURY SALES INTERNATIONAL DESKS M I D M A R K E T F O C U S *CRM Customer Relationship Management Tool Details presented in the Appendix Capital Markets Day, September 2008 Slide 15 Appendix Capital Markets Day, September 2008 Slide 16

9 Formula 1 Project Performance Improvement 1 Preparing before the race: prioritize efforts and resources on most 2 attractive opportunities Developing and coordinating the team: improving tools and skills 5 test -test -test 4 Introducing flexible, performance-driven compensation 3 Monitoring performance Capital Markets Day, September 2008 Slide 17 Formula 1 Approach is Based on 4 Key Elements Project s objectives Propagate best practices in corporate banking across RI network by adapting F1 modules designed in one pilot country to the specifics of each country Ensure commercial success despite a business environment that is becoming ever more challenging Clients are getting more sophisticated Increasing competition from both local and international banks with strong skills and balance sheets Increasing retretion of employees Formula 1 consists of our inter-connected modules Planning and market sizing Fact-based forecast for market size and growth Basis for prioritizing focus sectors Objective measure for setting target Continuous Improvement Performance-driven compensation Motivating incentives linked to maximizing value for entire bank and reaching stretched targets (based on 1 ) Large differentiation between top and bottom performers 3 Sales coordination model Needs-/solution-oriented account planning Cooperation across sales, product experts, and other functions Performance monitoring Right focus on results ensured due to economic-profit KPIs, leading to alignment of bank profitability Account plan ensuring continuous tracking of activity Capital Markets Day, September 2008 Slide 18

10 One of the Leading Leasing Providers in CEE Continuing growth course in the first half of 2008 New business volume of 1.6 bn 30% up, compared to the first half of 2007; total assets reached 5.5 bn CE region with strongest contribution of 59% into the new business volumes growth; SEE and CIS regions contribute with 29% and 12% respectively Net interest income up by 29% to 61.4 mn Purely organic growth resulting in coverage of 17 countries with top three market position in nine countries Leasing Assets ( mn) 6,000 5,500 5,000 4,610 4,000 3,000 2,000 1, ,449 1,735 2,230 3, /06/2008 Capital Markets Day, September 2008 Slide 19 Leasing Portfolio Composition Low risk profile with standard assets dominating: Leasing Portfolio as of 30 June 2008 Real Estate; 14% Equipment; 17% New business lines being developed with higher level of sophistication: Renewable Energy main focus on wind parks in new EU-member countries; not only plain vanilla leasing but end-to-end project development, operation and management Business jets Vehicles; 69% Capital Markets Day, September 2008 Slide 20

11 Factoring 2007 factoring services offered in 8 countries: No. 1 position in one market TOP 3 position in 3 other markets 3 start-up operations in SEE new start-ups in CIS High growth of factoring market, especially in the countries where we are starting Factoring is: excellent mid market and SME penetration instrument perfect for corporate cross-selling a product with very good risk/return profile Capital Markets Day, September 2008 Slide 21 Corporate Investment Banking (CIB) Product Group Domestic Capital Markets Domestic Corporate Finance Specialized Finance Description Structuring, sales, and trading of cash and derivative financial products, i.e. FX Fixed income (FI) Equity Origination, execution, and placement (if applicable) of corporate finance deals, i.e. Equity capital markets (ECM) Debt capital markets (DCM) Origination, execution, and placement (if applicable) of specialized lending deals, including Project finance, Acquisition finance, Pre-IPO finance RI focuses on domestic CIB activities in the Mid Market Segment to be able to fulfill the clients needs across their whole life cycle (e.g. privatization efforts of former state owned mid-sized companies.) Capital Markets Day, September 2008 Slide 22

12 Leveraging the Network Foster X-Border Business INTERNATIONAL DESKS Single point of entry for international clients and intragroup clients Capital Markets Day, September 2008 Slide 23 Bank Cooperation RI as Gateway to CEE Capital Markets Day, September 2008 Slide 24