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KBC Group Central Europe - Agoria by wufengmei007


									International Strategy of KBC

Networking event Agoria Banking Club
        December 18th, 2007

           John Hollows
      Senior General Manager
     Centra and Eastern Europe
              & Russia
                         KBC Group aims to be an independent,
                medium-sized bancassurer for private persons and
                medium-sized enterprises in selected European
                countries, with expertise in asset management and the
                financial markets. It endeavours to achieve high
                profitability targets through efficiency, customer-
                centricity, employee-friendly policies and sound risk
    Mission     management.

                         Through our customer-friendliness, efficiency,
    KBC         enterprising spirit and capacity for innovation, we will
                provide the best solutions for our customers, earn the
                loyalty of our employees, guarantee a high return to
                our shareholders and contribute towards the economic,
                social and cultural development of the community to
                which we belong

                  KBC Group
    Key financials (31-12-2006)
    Balance sheet total:     EUR 325.4 billion
    Net profit:              EUR 3 430 (ROE : 24%)
    Solvency levels:         Tier 1, banking: 8.7%
                             Solvency margin, insurance: 374%
    Customers:               11 000 000
    Headcount:               51 000

    n   Number 3 financial group in Central & Eastern Europe (consolidated
        assets, branches and employees)
    n   KBC is number 2 bankassurance player in Belgium, with strong
        presence in the prosperous and Northern region of Flanders
    n   Number 18 bank in Europe

                         KBC’s Banks and Insurance co’s
    Czech Republic                          Serbia
    ü CSOB Bank (100%)                      ü A Banka (100%)
    ü CSOB Insurance (100%)
    Slovakia                                ü Absolut Bank (95%)
    ü CSOB Bank (100%)
    ü CSOB Insurance (100%)                 Bulgaria
                                            ü DZI Insurance (89.7%)
    Hungary                                 ü EIBANK (75%)
    ü K&H Bank (100%)                       Romania
    ü K&H Insurance (100%)                  ü Romstal Leasing
                                            ü INK Insurance broker
    Slovenia                                ü Swiss Capital stock broker
    üNLB Bank (34%)                         Serbia
    üNLB Life Insurance (67%)               ü KBC Securities Serbia:
    * financial participation               Senzal, Hipobroker and Bastion
    Poland                                  ü Equitas stock broker
    ü Kredyt Bank (80%)
                                            ü Baltic Investment Company
    ü Warta Insurance (100%)                (BIC)
    Percentages concern direct + indirect
                    KBC: an important player in
                    Central and Eastern Europe & Russia

                                        L/ NL
    Poland Ranking           8th        th
                                       7 / 2nd
             Market share* 3.6%       2% /10%
             Clients       0.9 m.      2.5 m.
             Branches       376
    Czech    Ranking         2nd      3rd / 5th
    Republic Market share* 21%     10% /4.5%                                                            Insurance
                                                                                                          L/ NL
             Clients       2.9 m.    0.75 m.       Serbia   Ranking                   34th
             Branches       273                             Market share
                          (+3350 points of sale-                                     0.4%                   -
                          PO)                               Clients                55,000
    Slovakia Banking         4th      5th / 6th             Branches                  44
             Market share* 6%        4% / 3%       Bulgaria Ranking (**)              9th                 1st /1st
             Clients       0.2 m.     0.2 m.                Market share            3.1%              28.5% / 17.6%
             Branches       100                             Clients               225,000                 510,000
    Hungary Ranking          2nd      7th / 6th             Branches            91 (+120 ‘outlets’)        200
             Market share* 10%       3% / 4%
             Clients       0.9 m.     0.3 m.        Russia Ranking                26th (2005)
             Branches       170                             Market              0.86% in loans,
    Slovenia Ranking         1st     Life : 4th                                                             -
                                                           share               0.50% in deposits
             Market share* 42%      Life : 8%               Clients                108,000
             Clients       1.0 m.    0,03 m.                Branches                  39
             Branches       220                    ** 31-12-2006
     *01-04-2007                                   Market share total assets
                  Key elements of KBC’s strategy
    n   KBC will strenghthen its position in
        CEER via
        l   Distribution: Focussing on the retail segment and small
             -   broaden customer base by expanding branch and agent
                 networks in banking and insurance
             -   Intensify use of other distribution and service channels
             -   Intensify the corporate businesses in a number of
                 countries, targeting profitable growth

        l   Bancassurance: Enhancing the bancassurance
            concept, built on strong local brands

               Pursuing distribution excellence

    n   Survey results show that, in forthcoming years, new client
        acquisition and maintenance of the actual customer base
        will be based predominantly on traditional sales channels in
        the retail market (branches, agents etc.)

    n   The experience of the last few years show a strong
        correlation between retail market share and branch density

    n   We therefore upgrade our networks of bank branches and
        insurance agents (using the bancassurance model)

                  By expanding the bank branch


    n   Branch-Opening Program is on track:
         l In 2006-2007, 180 new branches were opened

         l 190 to be opened in 2008 and 2009

    n   Expansion of the branch networks will enable us to reach more
        customers and service existing customers better

             Bank Branch-Opening Program –
             example (Poland)
    n 100 new branches
    n Further locations
      identified for potential
      new KB branches

                       By increasing the number of tied
                       insurance agents

                     No. of active Tied Agents                     Number of inhabitants per KBC Tied Agents

                                            4 000
     4000     3 190
                                                    Sk                                                         Sk
     3000                                                                                                      Hu
                                                    Hu    50.000
                                                    Cz                                                         Cz
                                                    Pl                                                         Pl

       0                                                      0
              2007            2008          2009                        2007         2008          2009

      n     The number of (active) insurance
            agents will be expanded from 3 190 to
            4 000 by 2009 (+25%)                                                     Agent           Bank

      n     Recruitment of new high-quality
            agents is main challenge
     By reinforcing direct distribution

                        Intensifying the corporate business
                        through network desks in each country
                                              Network Bank       13 Corporate Banking
            KBC Group in Poland                                  Centers

                                                                 336 branches and sub-

                                              Staff Bank         6,565

                                              Staff Insurances   3,357

                                              Activities         Corporate and Retail
                                                                 Banking, Investment
                                                                 Banking, Asset
                                                                 Management, Insurance
                                                                 (life & non-life),
                                                                 Brokerage, Leasing, …

           Philip Van Ginderachter
             Head Network Desk
              ( 48 22 63 48 362
                       KBC Group in the Czech
                                             Network Bank   11 corporate branches

                                                            234 retail branches + 3,350
                                                            points of sale located in post

                                             Staff Bank     6768

                                             Staff Insurance 710

                                             Activities     Corporate and Retail Banking,
                                                            Financial Investment, Treasury,
                                                            Leasing, Factoring, Asset
                                                            Management, Insurance (life &
                                                            non-life), …
        Lucie Trnkova-Pazderova
            Jolana Knoppova
               Nicol Fabbio
      International Corporate Desk
( +420 224 114 171/
     ( +420 224 114 169/
      ( +420 224 114 993/            

                     KBC Group in Slovakia
                                    Network Bank      3 corporate branches

                                                      105 retail branches

                                    Staff Bank        1,496

                                    Staff Insurance   249

                                    Activities        Corporate and Retail Banking,
                                                      Financial Investment, Treasury,
                                                      Leasing, Factoring, Asset
                                                      Management, Insurance (life &

           Marcel MARKUS
     International Corporate Desk

         ( 421 2 59 66 83 49
         2 421 2 54 41 48 06


                       KBC Group in Hungary
                                     Network Bank     20 corporate branches
                                                      168 retail branches
                                     Staff Bank       3,804

                                     Staff Insurance 261

                                     Activities       Retail and Corporate
                                                      Banking, Treasury, Asset
                                                      Management, Investment
                                                      Consulting, Leasing,
                                                      Insurance (life & non-
                                                      life),Private Equity
                                                      Investment Services, …

        Oluremi Durosaiye
 International Corporate Desk
       ( 00 36 1 328 90 06
       2 00 36 1 328 96 95


                       KBC Group in Russia
                                        Network Bank:     39 branches

                                        Staff Bank:       1,416

                                        Activities:       Trade Finance, Corporate
                                                          Lending, SME banking &
                                                          Retail Business

            Eugenia Zhiglova
             Network Desk
     ( +7 (495) 777-71-95 ext. 515-35
          2 +7 (495) 777-71-60


                     KBC Group in Serbia
                                    Network Bank 18 branches, 26 sub-branches

                                    Staff Bank    356

                                    Activities    Corporate and Retail banking;
                                                  deposits, loans and payments

           Mirko Golijanin
     Director Corporate Segment
         ( +381 11 30 50 321
         2 +381 11 35 40 830


                  KBC Group in Bulgaria
                                  Network Insurance    200 outlets
                                  Network Bank         17 regional offices, 91
                                                        branches, 129 other

                                  Staff Insurance      10,200 Insurace Agents
                                                       217 Brokers
                                  Staff Bank           1,472

                                  Activities           Non-life/ life Insurance;
                                                       retal and corporate

        Alexandra Bacheva
     Head of Corporate Clients
        ( +359 2 9399 116


                 Further enhancing the
                 Bancassurance concept
n    “Integrated distribution” principle, applied for bank and insurance
      l   Unified management
      l   Centralised marketing
      l   Integrated customer databases
      l   Remuneration schemes
n    “Micro-Markets” approach:
      l   Tied Agents: exclusive, self-employed agents linked to the local bank
      l   Local insurance agents and local bank outlets work together (“act as
          one company”)
      l   Bank branches sell standardised insurance products, and refer more
          complicated products to the agents
      l   Agents refer customers to the bank branches and deal with after-
19        sales service
              Further enhancing the
              Bancassurance concept (2)
     n   Further enhancing the bancassurance concept
         l Completing  the development of shared
           customer databases
         l Expanding insurance agent networks

         l Upgrading of the agent networks: “Tied
           Agents project” focusing on specialisation,
           sales support, training, review of incentive
           system, segmentation etc.

                    KBC will develop the bancassurance
                    to the highest level
     n   KBC is stepping up from a ‘Level-2’ to a ‘Level-3’ bancassurer
     n   The Belgian model is the reference, implementation in CE will take the local situation into account
     n   The shared marketing and distribution function, as well as the local micromarket concept, are the
         cornerstones of the model

                                   Level 3: Integrated distribution
                 Acting as a single company: bank and insurance operations working
                  under unified governance, with integrated distribution channels &
                               FCCE external benchmarking?
                 centralised marketing, integrated customer databases & centralised
                          IT platform and streamlined remuneration schemes

                                   Level 2: Exclusive distribution
                        Bank branches sell insurance products from intra-group
                        insurance company as additional source of fee income

                                Level 1: Non-exclusive distribution
                                Bank branches selling insurance products
                                of third-party insurers as additional source
                                 of fee income. This is the model of most
                                              European banks.

     Using secondary channels to reach
     additional market segments
                m   Zagiel Consumer Finance: 220 sales offices and 35 000
                m   Ongoing project to increase number of Sales Points
                    (average initial investment: 10 000 EUR, break-even after
                    11 months)
      Czech Republic:
                m   Postal Bank: 3 400 outlets and 31 financial centres,
                    another 30 financial centres to be opened by 2010;
                    special attention on Consumer Finance – consumer loans
                    and cards
                m   Hypotecni Banka (monoline mortgage lender): 30 sales

                m   CMSS: monoline “building savings” company providing
                    savings accounts and subsequently, housing loans
                    through 2 400 exclusive agents
                m   Sale of retail insurance via brokers
                m   Retail banking products via 2 200 non-exclusive banking
                Using strong local brands

     Czech                  Pre- 2005

     Slovakia               Pre- 2005

                            June 05

     Poland                 Sept. 05

     Bulgaria               Sept. 07

     Using strong local brands (2)


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