Fokus Bank - Den Danske Bank in Norway

Transcription

1 Capital Market Day, Copenhagen, 29 June 2000 Fokus Bank - Den Danske Bank in Norway Svein Sivertsen Managing Director of Fokus Bank

2 Agenda ❶ Introducing Fokus Bank ❷ The Norwegian banking industry ❸ Fokus Bank as part of Den Danske Bank

3 Introducing Fokus Bank: Facts and history A regionally based commercial bank Total assets of NOK 45.7 billion Fully privatised in acquired by Den Danske Bank in 1999 Ten Region Banks and 66 branches Established in 1987 as the result of a merger between seven regional commercial banks Operates in markets where the bank has long traditions and a strong market position Emphasises long-term customer relationships Aims to offer a broad range of financial services and solutions

4 Introducing Fokus Bank: Strategic elements Regional banking Relationship banking through combining decentralised customer contact and a broad product range Professional and international through adapted and available competence Low costs through clearly defined roles and being in the forefront in the use of IT Being or having the possibility to become the leading commercial bank in each target region Professional and regionally based banking are to give growth and strengthened market positions Combining a decentralised organisation and local decision making powers with a broad and international product range Sales-oriented organisation in order to retain and develop the customer base and attract new customers Customer contact in the region banks Adapted and available competence locally and regionally Access to international solutions and competence Financial strength and stability - Nordic group Clearly defined roles - market operation, back-office and production, management, control and development In the forefront in using IT in order to gain advantages in terms of quality and cost-efficiency

5 Introducing Fokus Bank: Strong regional market positions Share of Share of Region Bank corporates corporates individuals individuals Tromsbanken Nord-Trøndelagsbanken Forretningsbanken NordVestbanken Vestlandsbanken Vestlandsbanken Bergen n.a. n.a. Sunnhordlandsbanken Rogalandsbanken Telemarksbanken Bøndernes Bank

6 Introducing Fokus Bank: The restructuring of Fokus Bank New strategy in 1991 Cost reductions Concentrating the operation to regions where the bank had a leading market position Cultivate the Region Banks as units for sales and marketing - centralisation of back-office and production Expanding the product range - capital markets, asset management and insurance Management and control New credit organisation and credit policy Improve risk management and Management Information Systems

7 Introducing Fokus Bank: Development of main Balance Sheet items Total assets Net lending Customer deposits

8 Introducing Fokus Bank: Operating principles All customer contact in the Region Banks All back-office functions and production to be performed centrally Centralised corporate development as well as management and control The subsidiaries main task is to support the Region Banks operations with products, services and expertise Offer a broad range of financial solutions to corporates and individuals in the targets regions

9 Introducing Fokus Bank: Organisation - roles and tasks Top Management/ Group Staff Management, control and development Strong management and control Fokus Service Centre Production and back-office functions Low costs through centralisation Region Banks Sales and customer contact Market focus through decentralisation

10 Introducing Fokus Bank: The Norwegian operation The Norwegian Market Den Danske Bank Oslo Region Banks Fokus Finans AS Nordenfjeldske forsikring Fokus Capital Markets Fokus Asset Management Fokus Kreditt AS Danske Securities Wholesale Banking Den Danske Bank Investment Banking

11 Customers 20,000 corporate customers 200,000 private customers Products Broad product range Distribution Introducing Fokus Bank: Current position Emphasis on development of web-based banking services for individuals and corporates Competence Invested in building formal competence A good foundation to build on

12 The Norwegian Banking industry: The Norwegian banking market DnB/Postbanken, Christiania og Union Bank of Norway are the three dominating banking groups in Norway with almost 65 per cent of the market (measured as share of total assets) Norway is predominantly a retail banking market 0 DnB/Postbanken CBK UBN * Sparebank 1/Vår Fokus Bank * Including co-operating banks

13 The Norwegian Banking industry: Macroeconomic development Marked upturn in Norwegian economy Higher net export - oil Higher market growth abroad gives higher export Mainland demand is growing Low level of investments in will be the bottom year Investments will grow in both in the oil sector and in the mainland economy Marked upturn in aggregated demand... % y/y GDP Private consumption UKEFOKUS.KNR0011nok$..and investment bottoms out this year UKEFOKUS.KNR0012nok$ % y/y Total investment Investment in mainland industry

14 The Norwegian Banking industry: Macroeconomic development Higher general pressure in the Norwegian economy Tight labour market High credit growth Weak krone Inflationary pressure Increased interest rates More aggressive monetary policy Too expansive budgetary policy will lead to further tightened monetary policy Weaker krone adds to inflationary pressure.. NOK/EUR NW.KALLE.VALUTA.KURS$ Trade-weighted exchange rate>> << NOK/EUR Index 112 % % NW.KALLE.VALUTA.FOLIO$..and central bank tightens up 1999 Deposit rate New forecast Previous forecast

15 The Norwegian Banking Industry: International developments Increased internationalisation and globalisation - international flow of goods and capital EMU amplifies the development - Norway will have to adjust Cross-border competition - the demand for high yield on investments is high and rising - reflected in the equity and bonds markets Norwegian banks experience increased competition from foreign players - the competitive climate has changed - reduced interest margins Increased economies of scale and new IT enable mass production of financial services and lower-cost distribution Mergers between financial institutions give larger entities internationally Market domination is becoming increasingly more important

16 The Norwegian Banking Industry: The Banks role The banking industry is an important part of the corporate infrastructure An internationalisation of the corporates demands an internationalisation of the Norwegian banking industry A global economy demands banks that are characterised by: Professionalism Competence regarding the Norwegian market combined with international solutions, competence and network Information technology expertise

17 The Norwegian banking industry: Consolidation necessary The largest Norwegian banks are becoming increasingly smaller compared to their Nordic and European counterparts Difficult to compete in markets where size matters Wholesale banking Investment banking Asset management International cash management Retail banking is still highly profitable - requires strong market positions Regional consolidation Norway is overbanked

18 Fokus Bank as a part of Den Danske Bank: A new phase for Fokus Bank Fokus Bank is at the beginning of a new phase : Strategic aim to become nation-wide, Norwegian economy in difficulties, banking industry crisis : Survival strategy, trimming and cultivation of the operation : Privatisation, strong regional banking focus, structural activities in order to solve future challenges New phase: Fokus Bank is to strengthen its position in the Norwegian market

19 Fokus Bank as a part of Den Danske Bank: The work so far Fokus Bank has been a part of Den Danske Bank Group for thirteen months The integration has so far focused on Routines Reporting Risk Management Introducing group values and culture Joint design IT-integration - joint platform from October 2001

20 Fokus Bank as a part of Den Danske Bank: Increased income and efficiency Preparing for a new growth phase Product range Asset management Corporate and retail real estate Internet banking - corporate and retail Geographical expansion Areas with high population density and high level of economic activity In the short term - increased costs In the long term - increased income and efficiency

21 Fokus Bank as a part of Den Danske Bank: International solutions combined with regional market focus Fokus Bank has Long traditions as banking partner for the regional corporates Local competence and decisionmaking Local and regional market focus Focused marketing strategy emphasising the strong relations between customer and bank Den Danske Bank has International network Broad range of products and solutions for corporates International cash management solutions Strength within the capital markets and asset management Modern and customer-oriented ITsolutions Internationally competitive product range combined with regional and local distribution and market focus equals a strong banking partner

22 Fokus Bank as a part of Den Danske Bank: Cost of distribution The development of new distribution channels must be financed through reduced cost of traditional channels. Total distribution cost Express banking Other face-to-face Cost Challenge Telephone ATM/PC based Branch (Source: Coopers & Lybrand, illustrative)

23 Fokus Bank as a part of Den Danske Bank: Future challenges and growth areas Strengthen regional market positions Gain market shares within traditional banking Develop the Region Banks Emphasis on the large markets in Greater Oslo, Bergen and Stavanger Enter new markets New geographical areas Strengthen our position within asset management The main growth area in the Norwegian market Combine international and Nordic products with domestic distribution Develop and market competitive WEB solutions Use Den Danske Bank Group solutions where applicable Establish core values as an integral part of the organisational identity and culture, develop a communication platform and increase the marketing effort

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