Fifth Third Bancorp · NASDAQ:FITB
Fifth Third Bancorp — BAAB 23rd Annual Fall Conference (November 2004)
33 slides from Fifth Third Bancorp's conference presentation, Nov 4, 2004
Slide 1: BAAB 23rd Annual Fall Conference: New Opportunities
BAAB 23rd Annual Fall Conference “New Opportunities” Neal E. Arnold Executive Vice President Fifth Third Bancorp Charles Drucker President, Fifth Third Processing Solutions November 4, 2004
Slide 2: Fifth Third Business Mix
Fifth Third Business Mix 2003 Revenues Processing Solutions 12% Investment Advisors 9% Commercial 29% Retail 50% Five-Year CAGR Processing Solutions 30% Retail Banking 15 % Commercial Banking 12 % Investment Advisors 10% Total 15%
Slide 3: Overview
Overview I. Overview V. Transaction & Revenue History II. Business Mix VI. Check 21 Implications III. Product Delivery VII. Industry Opportunity IV. Investing in People
Slide 4: Fifth Third Processing Solutions (FTPS)
Fifth Third Processing Solutions (FTPS) Wholly owned division of Fifth Third Bank Three primary business lines: Merchant Services Card Services Financial Institution Services Headquartered in Cincinnati, Ohio Over 125,000 merchant locations and financial institutions world-wide Almost 11 Billion tra
Slide 5: Total FTPS Revenue Mix
Total FTPS Revenue Mix FTPS Revenue 2002 2003 % Growth Financial Institutions $ 206 $ 216 5% Merchant Services 261 306 17 Card Services 76 87 14 TOTAL $ 543 $ 609 12 % 14% 50% 36% ($ in millions)
Slide 6: Delivery to Market
Delivery to Market Tenacious, Professional, Value-Adding Selling Product Innovation and Operating Excellence Unparalleled Processing Reliability Packaging Bank Products and Services Best-in-Class Fraud Protection Industry-Leading Back Office Support Financial Institution Ownership & Perspective Tech
Slide 7: Expanding the Sales Force
Expanding the Sales Force SALES FORCE EXPANSION Merchant Processing Expanding Sales and Relationship Management personnel to drive growth through vertical markets Growth in Commercial sales personnel to leverage Fifth Third Bank customer base Growth in Telesales personnel to leverage banking center
Slide 8: Transactions Processed
Transactions Processed Transactions in Billions 12 10 8 6 4 2 0 Compound Annual Growth Rate 10-year = 23 % 5-year = 24 % 1.4 1.7 1.8 2.1 2.9 3.7 4.8 6.6 8.2 9.0 10.7 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004* * Projected
Slide 9: FTPS Revenue History
FTPS Revenue History $ Millions 650 600 550 500 450 400 350 300 250 200 150 100 50 0 Compound Annual Growth Rate 5-year = 30 % 68 81 95 125 159 204 272 372 543 609 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Fin. Inst. & Card Merchant
Slide 10: Processing Distinctions
Processing Distinctions Visa® U.S.A.: Member Service Quality Performance Awards Highest Copy Fulfillment Rate, 1995-2003 Lowest Assured Transaction Rate, 2002 Lowest Chargeback to Sales Ratio, 1995-2002 4th Largest Bankcard Acquirer by the Nilson Report 5th Largest ATM network by ATM & Debit News 7t
Slide 11: Check 21
Check 21 Fifth Third has the banking and payments expertise to deliver value-added service to new and existing customers Personal and Small Business Debit or Credit Card Online Bill Payment Overdraft Protection Statement and Check Safekeeping Commercial Debit and Credit Card Processing and Issuance
Slide 12: Payments Opportunity
Payments Opportunity U.S. Consumer Payment Volume 2001 $5.4 trillion Electronic 6% Credit 26% Checks 42% Cash 16% Debit 10% Source: The Nilson Report 2007 $7.0 trillion (est.) Electronic 11% Cash 12% Debit 20% Checks 29% Credit 28%
Slide 13: Debit Transaction Growth
Debit Transaction Growth 5-Year CAGR Online = 21 % Offline = 24 % Both Signature and PIN-based Debit are expected to grow in excess of 20% in 2004 Online and Offline Transaction Growth 1,942 2,901 4,062 5,295 6,683 8,155 9,784 11,741 1,600 2,000 2,500 3,138 4,136 4,300 5,300 6,550 1997 1998 1999 200
Slide 14: Merchant Services
Merchant Services I. Product Offerings II. Integrated Provider III. Distribution IV. Merchant Partners V. Performance History VI. Opportunity
Slide 15: Merchant Services: Superior Processing Solutions
Merchant Services PARTNERING TO DELIVER SUPERIOR PROCESSING SOLUTIONS FOR ANY SIZE MERCHANT Core Services For All Merchants Credit Card, Debit Card and Electronic Benefits Transfer (EBT) Acceptance (Visa®, MasterCard®, American Express®, Discover®, JCB®) Premier Issue® Gift Card Acceptance Comprehen
Slide 16: Single Source Solution
Single Source Solution In-house support for all critical support functions, from application development to relationship management In-house authorization, settlement, signature capture and gateway interface support Fifth Third DirectSM-Interactive, Internet-based, back office management support sys
Slide 17: Selling Through All Channels
Selling Through All Channels Merchant Services Product Offerings Specialized Services Meeting the Needs of High-Volume Transaction Customers For B2B Customers Needing to Electronically Capture Additional Details About Purchase Transactions Core Services for ALL Customers Dynamic Currency Conversion
Slide 18: Major Merchant Partners
Major Merchant Partners Abercrombie & Fitch AutoZone Bed Bath & Beyond Barnes & Noble Belk Stores BJ’s Wholesale Club Bob Evans Circuit City CVS Pharmacy Macy’s/Federated Department Stores Kohl’s The Kroger Company MAPCO Express Nordstrom Office Depot Publix Supermarkets Saks Incorporated T.G.I. Fri
Slide 19: Merchant Sales Volume & Growth Rate
Merchant Sales Volume & Growth Rate Merchant Sales Volume $ Billions 140 120 100 80 60 40 20 0 Compound Annual Growth Rate 10-year = 32 % 5-year = 30 % 7.410.5 13.9 21.2 26.3 32.9 45.9 62.0 83.4 101.0 122 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004* * Projected Sales Volume includes Ameri
Slide 20: Merchant Revenue Growth
Merchant Revenue Growth Compound Annual Growth Rate 5-year = 37 % $ Millions 350 300 250 200 150 100 50 0 21 30 36 52 64 79 104 150 261 306 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Slide 21: 2005 Merchant Processing Services
2005 Merchant Processing Services External Products & Systems Development Within Vertical Markets Maintain and Enhance Core Competencies Retail & Supermarket Enhance Gift Card product Enhance Reporting product Dynamic Currency Conversion Expand to New Vertical Markets by Priority Opportunity Risk Pr
Slide 22: Financial Institutions & Card Services
Financial Institutions & Card Services I. Correspondent Banking II. EFT Processing III. Single Source Provider IV. Performance History V. Opportunity
Slide 23: Financial Institution Services
Financial Institution Services WE BANK BANKS 1,341 Financial Institution Relationships Correspondent Banking Cash Letter Clearing Cashiering Services Treasury Management International Business Services Investment Management Lending Check 21 Readiness
Slide 24: Financial Institution Services: EFT Processing
Financial Institution Services Over 25 Million Debit/ATM Cards Issued 12,215 ATMs 50 states 16 countries EFT Processing Card Authorization and Issuance Support ATM, Debit and Credit ATM/Terminal Support Network Gateway Access PRISM Fraud Monitoring Business Debit Card Home Equity EFT Training Fee In
Slide 25: A Single Source Provider
A Single Source Provider Network Reliability Financial Institution Viewpoint with Global Payment Advisory Capability Unique Vertically Integrated Processing Capabilities Unmatched Technical Expertise Superior Back Office Support: Fifth Third DirectSM Economies of Scale “Proactive” Relationship Manag
Slide 26: Financial Institution & Card Revenues
Financial Institution & Card Revenues Compound Annual Growth Rate 5-year = 27 % $ Millions 335 285 235 185 135 85 35 47 51 59 73 95 125 168 222 282 316 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003* * Excludes $13 million impact of August 2003 VISA/MC Settlement
Slide 27: 2005 Financial Institution Services
2005 Financial Institution Services 1,341 Current EFT Customers GOAL = 1,000 New Financial Institutions in Three Years Expand card issuer base through upstream participation of large institutions Explore opportunities to leverage Jeanie® network Focus on additional product sales to current EFT clien
Slide 28: Retail Partnership
Retail Partnership I. Sales Campaigns II. Affiliate Revenue Opportunity
Slide 29: Sales Campaigns
Brian tried Bancorp Sales Campaigns @ ifth Third Bank 2004 Sales intatves Tee Te Te Te Te eT te Pe et Te Te INCREASE Marchar eee Pndtabon ang ul Dosis AND Expang Commer Resonate ‘Operation Opportunity Mining ‘August 25- November 20 Fropet eng $9 BOA Casati rat reese FIPS Wrapping Up 2004 Commercial
Slide 30: Affiliate Merchant Sales Focus
Affiliate Merchant Sales Focus Affiliate Sales Scorecard
Slide 31: Affiliate Card Product Sales
Affiliate Card Product Sales Stretch Goals: 1 million 5/3 card accounts on file by year end 2005 Card Fees = Consumer Service Charges for each Affiliate in five years BY: Building Relationships with every Retail Head within the Affiliates Brand Decision Pre-approved Credit Cards through Banking Cent
Slide 32: Conclusion
Conclusion Fifth Third Processing Solutions Will: I. Expand into New Market Verticals II. Cross-Sell Additional Products and Services III. Expand and Enhance the Sales Force IV. Leverage Fifth Third Affiliate Network
Slide 33: Questions
Questions This presentation may contain forward-looking statements about Fifth Third Bancorp within the meaning of Sections 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and 21E of the Securities Exchange Act of 1934, as amended, and Rule 3b-6 promulgated thereu
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