Baudouin Prot Bnp Paribas

30th Efma Convention: Leadership in retail finance L d hi i t il fi 13 p.m. & 14 March 2008 - Paris Baudouin Prot Chief Executive Officer BNP Paribas BNP Paribas Retail Strategy 1

BNP Paribas Retail Strategy in Mature & Emerging countries Baudouin Prot March, 14th 2008 2

The importance of retail banking & SFS in BNP Paribas’ universal bank offering Driving organic growth through customers centricity Comparing value creation strategies in mature & emerging markets 3

Retail banking & SFS The highest revenue pool from 2005 to 2015 Estimated revenue pool from 2005 to 2015 (constant $Bn) Europe Rest of Japan Rest of APAC Rest of Americas 19 US China 5 AMS Top5 EMEA 23 47 27 21 30 12 33 CAGR 4,3% US Europe Rest of Japan China Rest of APAC Rest of Americas 34 Top5 EMEA CIB 82 46 41 23 62 47 30 0 CAGR 4,1% 4 1% 37 Rest of Rest of Retail US Europe Japan China Rest of Americas Top5 EMEA APAC 24 & SFS 98 47 56 44 45 62 5 CAGR 3,1% 0% 20% 40% 60% 80% 100% Source : BCG EMEA = Europe, Middle East & Africa Total = 910 Retail: 1st contributor to revenue growth with more than 40% of the revenue pool Emerging markets : 45% of revenue pool growth BNP Paribas Retail Strategy 4

Retail banking & SFS: a major business in BNP Paribas’ universal bank offering Retail banking in 2007: 55% of group revenues Retail b ki t k R t il banking networks S i li d Fi i lS i Specialised Financial Services Emerging g g Personal Equipment q p F France It l Italy USA Finance Solutions markets 2 230 branches 730 branches 740 branches 1705 branches • Cetelem #1 in • #2 in Europe in 6 mn customers 3 mn customers 4 mn customers 4 mn customers continental Europe business equipment financing NBI 07: € 5,7 Bn NBI 07 : € 2,6 Bn NBI 07 : € 2 Bn NBI 2006 : € 1 Bn • UCB #3 in France • Top 3 in Europe in leasing • # 1 in France in leasing A complete set-up to leverage product factories and distribution platforms BNP Paribas Retail Strategy 5

2007 results: Robust growth and market outperformance French Retail Banking : Strong sales and marketing drive: record number of customers won (230,000)and sustained growth in volumes Despite a difficult market environment, revenue growth outperforming Revenues (€m) the market, with a 1.1 pt positive jaws effect BNL bc: 2006 2007 +7.9% Integration ahead of schedule 7,955 Robust revenue growth thanks to enhanced commercial efficiency +4.4% 7,374 Strong improvement of the cost/Income ratio: from 70,6% to 66,2% g p , , 5,671 5,919 , over one year +6.5% IFRS : 2,473 2,634 Continued to pursue sustained business development in emerging markets i k t Won 1.5 million new customers in 2007 in the retail banking networks Opened 189 branches in 2007 Acquired in 2007 Sahara Bank in Libya and consumer lending companies in Brazil and Bulgaria FRB* BNL bc** IRFS BancWest: good sales and marketing drive despite the downturn Consumer Finance: Growth in outstandings: +17%/2006 *Including 100% of French Private Banking and excluding PEL/CEL effects ( g (+4.1% at Equipment solutions: Good operating momentum constant scope) **2006 full year pro forma; including 100% of Italian Private Banking BNP Paribas Retail Strategy 6

The importance o retail ba e po ta ce of eta banking & S S g SFS in BNP Paribas’ universal bank offering Driving organic growth through customers centricity Comparing value creation strategies in mature & emerging markets 7

Our priority: Organic Growth with 4 key levers Convergence for Growth g Extended Customer Best-in-class distribution Cross-selling satisfaction Offers channels • Maintain our • p p Develop /improve our • Sell branch banking g • Systematic competitive existing networks services to SFS measurement advantage in our customers businesses • Develop state of • Develop alternative • Increase revenue per • Anticipate customer the art Industrial networks customer needs platforms Share Platforms and Best Practices Share Customers knowledge BNP Paribas Retail Strategy 8

Customer Satisfaction at the heart of BNP Paribas strategy and organisation BNP Paribas recognized know-how: anticipate customer needs State-of-the-art products St t f th t d t and services offer Partnerships Innovation Customer satisfaction Efficient processes Multichannel distribution Efficient CRM & Marketing A few examples of 2007 initiatives: BDMV2: enhancement of the multichannel offer (NetEpargne, NetImmo…) Roll-out of Lean Six sigma g Mobile banking: partnership with Orange Customer centricity, a Key Success Factor for BNP Paribas BNP Paribas Retail Strategy 9

The importance of retail banking & SFS in BNP Paribas’ universal bank offering Driving organic growth through customers centricity Comparing value creation strategies in mature & emerging markets 10

Retail banking & SFS: Differentiated value creation path 2 key Development Paths : 1. « Branch Banking » Model: build on networks and leverage customer base 2. « Specialists» Model: broad development on a proven platform of Credit products, financial services or Savings products What we bring : g Products and sales Know-how Management / best practice Rating Brand B d What we seek : Access to customer Base Local Human Resources Deposits A differentiated roll-out in mature & emerging markets BNP Paribas Retail Strategy 11

Branch Banking in Mature markets: Implementation of the integrated model Outperform the market Create value by applying Implementation of a new our integrated model business model French Retail Banking It li retail market Italian t il k t W t t il k t Western US retail market French domestic bc: A strong potential of growth FBR : A model of commercial and BNL market BancWest: A significant franchise on industrial organization and restructuring, in a dynamic retail the world biggest market banking market Roll-out of BNPP’s Revitalize BancWest Innovation integrated model network Private banking business Multi-channel model « Bear Plan » Cross-selling C lli Retail Banking Initiative “Business Centers” model Product innovation Commercial Banking Initiative Be ahead on the internet: Modernization of the branches Netepargne, Netcredit Immo Efficiency improvement BNPP’s integrated model. Strengthen our Strengthen the cross Strengthen cross-selling competitive position selling Increase # products by customers Example : Corporate Accelerate the integration plan customers With the rest of the group : g p F Future consolidation: lid i CIB: ECEP, syndication FRB * {CIB, AMS, IRFS} opportunism and pragmatism AMS: Insurance IRFS: Leasing Maintain commercial outperformance outperformance, Leverage the commercial Priority to organic growth and preserve significant jaws effect momentum BNP Paribas Retail Strategy 12

Adaptation of our SFS business models PERSONAL FINANCE EQUIPMENT SOLUTIONS Merger of Cetelem and UCB Grouping of Arval and BPLG Develop direct channels and p Share know-how know how increase production via internet Increase international development Increased exposure to emerging markets An integrated value creation model A powerful client acquisition engine leveraging branch networks with specialised finance businesses A systematic and large scale industrial model large-scale BNP Paribas Retail Strategy 13

An absolute prerequisite: Keep on improving our operational efficiency Rationalization of networks • Centralization of back offices and branches • Lean organization in Front office • More Automation : quot; more time for sale quot; • Master plan OAV (FRB) Reorganization of functions Process Optimization p & Business lines • Roll out of Lean 6 sygma / ACE • Reorganization of functions • Optimization of procurement • Creation of Personal Finance and Equipment Solutions • Optimization of set-ups (one umbrella in Russia, one • Focus on the real-estate and IT single Treasury, Cetelem / Cofinoga) IT : Constitution of common platforms Sharing of developments BNP Paribas Retail Strategy 14

Emerging countries: two differentiated approaches to increase group exposure Mediterranean zone and Eastern Europe Brazil - India - China Densification of existing franchises Active growth strategy driven Development of cross-selling by a system of sponsoring 10% of the global revenue pool growth % f 20% of the global revenue pool growth 2006-2010 2006-2010 Organic growth strengthened by targeted Coordinated Strategy and adaptation of acquisitions in the Mediterranean zone the BNP PARIBAS integrated model in d in Eastern E and i E t Europe ti large emerging countries: l i Open 600 branches by 2010 to bring the total quot; retail light quot; experiment in Brazil, capitalizing on branch network to 2,600 the presence of Personal Finance Win over 6 million new customers in the retail Industrial Partnerships banking networks by 2010 Coordination of the Group strategy by a sponsor Grow revenues per customer member of the Executive Committee BNP Paribas Retail Strategy 15

BNP Paribas targets for Retail Businesses Estimation of annual evolution of revenues and jaws effect from 2008 to 2010 j Revenues Jaws effects 10% 6% 5% 4% 1% 1% FRB BNL bc IRFS Ambitious targets for 2010 BNP Paribas Retail Strategy 16

Conclusion Priority to organic growth with targeted acquisition policy In mature countries, leveraging our integrated business model Acceleration of growth in emerging markets Focus on operational efficiency to increase jaws effects in all retail businesses BNP Paribas Retail Strategy 17

Baudouin Prot Bnp Paribas

by Dennis Pereira on Mar 16, 2008

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Baudouin Prot Bnp Paribas — Presentation Transcript