Slide 1: FirstRand Wealth Segment
FirstRand Wealth Segment (4) FIRSTRAND
Slide 2: History
History 1995 FNB established FNB Private Bank 1997 RMB established ORIGIN 1999 FNB Private Bank changed to Henry Ansbacher April 2003 Ansbacher and Origin combined to form RMB Private Bank Oct 2004 “One FNB” and ONE Wealth Segment Executive committee RMB Private Bank FNB Private Clients
Slide 3: FirstRand's positioning
FirstRand’s positioning Focus of FNB Focus of RMB Private Clients Private Bank 30 000 FNB Clients Portfolio of brands enables niche focus.
Slide 4: The segment in context
The segment in context FNB main bank share (2004) Wealth 77,084 (Multi-banked) R750K + 20% 837,862 – Premier 250,593 previously Personal Banking R350K – R750k (Multi-banked) est. 400k- 18% 600k Upper middle 510,185 R200k – R350k (97% banked) 17% Lower middle 2,019,592 (97% banked) R60k – R200k 19% S
Slide 5: Total segment - client numbers
Total segment - client numbers 3 000 Net Asset Value (R Million) 50 ** 37 000 * 80 000 to 150 000 7 0.75 * Source: AMPS 2002 a – 2004, Market Tracker November 2004 ** 2005 Cap Gemini and Merill Lynch World Wealth Report
Slide 6: Total segment - product usage
Total segment - product usage Structured and Financial Planning and Asset Succession Corporate Finance Fiduciary Services Management Planning Net Asset Value (R Million) Structured Transactional Risk/ Lending Banking Assurance 50 Financial Planning and Asset Fiduciary Services Management Structured
Slide 7: Total segment - revenue distribution
Total segment - revenue distribution Transactional banking income Margin income Financial Planning and Asset Management fee income Lending Structuring fee income Based on RMB Private Bank actuals
Slide 8: Total segment - revenue potential
Total segment - revenue Net Asset Value (R Million) potential R 0.8 billion 50 R 3.0 billion 7 R 3.4 billion 0.75 3.4 6.4 7.72 Revenue (R Billion)
Slide 9: Competitive landscape
Competitive landscape Private Bank StockBrokers IFA’S Net Asset Value (R Million) PRIVATE BANK Private Bank 50 Private Bank StockBrokers IFA’S Priority Suite Personal Financial Services Private Bank 7 0.75 Priority Suite Personal Financial Services Private Bank
Slide 10: Other insights
Other insights 74% 30% is business is black Net Asset Value (R Million) owners 58% Fastest black is under growth segment 45 years of age Low penetration 7 Multi-banked of investment products 0.75
Slide 11: The key issues
The key issues • Client numbers are small and clients are multi- banked. • Fierce competition. • Biggest revenue potential is in lending and combined financial planning and asset management. • Most clients are business owners. • It is the fastest growing black sector.
Slide 12: The key issues
The key issues • Client numbers are small and clients are multi- banked. • Fierce competition. • Biggest revenue potential is in lending and combined financial planning and asset management. • Most clients are business owners. • It is the fastest growing black sector.
Slide 13: FirstRand – customer base
FirstRand – customer base FNB 30 000 Mostly using only transactional FNB banking at FNB 20% RMB PB RMB Private 10% Bank 15 000 Financial 150 000 planning, asset individuals management and structured finance in “seedling” phase FirstRand’s base provides huge opportunity
Slide 14: The key issues
The key issues • Client numbers are small and clients are multi- banked. • Fierce competition. • Biggest revenue potential is in lending and combined financial planning and asset management. • Most clients are business owners. • It is the fastest growing black sector.
Slide 15: RMB Private Bank – leader in structured lending
RMB Private Bank – leader in structured lending Natural Person CC Can be PTY in any Structured Facility legal Trust entity Partnerships Property Investments Can be in any legal entity
Slide 16: Strong growth in advances
Strong growth in advances 12 11.7 10 8.3 8 R billion 5.9 6 4.8 4 2.8 2.1 2 36% 53% 40% 39% 41% 0 2000 2001 2002 2003 2004 2005 Loan book growth
Slide 17: RMB Private Bank - leader in wealth management
RMB Private Bank - leader in wealth management Estate planning Investment planning Client needs Cash flow fulfilled analysis Income Defensive Growth Tax structure My wealth is Portfolio portfolio portfolio preserved Advice Succession planning Disciplined Asset Allocation My wealth is Investment grow
Slide 18: Good track record
Good track record 10 10 9 8 7 6.7 6.2 5.7 6 5.1 5 4 3 2 1 8% 17% 31% 50% 0 2001 2002 2003 2004 2005 Assets under management growth
Slide 19: The key issues
The key issues • Client numbers are small and clients are multi- banked. • Fierce competition. • Biggest revenue potential is in lending and combined financial planning and asset management. • Most clients are business owners. • It is the fastest growing black sector.
Slide 20: FirstRand well positioned
FirstRand well positioned RMB Private Bank FNB • RMB Private Bank is a • FNB’s 30 000 wealth leader in structured clients is not yet using lending. FirstRand for these offerings. • In financial planning and asset management, RMB Private Bank has a sound basis for growth. • Structured Finance will be
Slide 21: Key issues
Key issues • Client numbers are small and clients are multi- banked. • Fierce competition. • Biggest revenue potential is in lending and combined financial planning and asset management. • Most clients are business owners. • It is the fastest growing black sector.
Slide 22: FirstRand well positioned
FirstRand well positioned RMB Private Bank FNB • Structured lending is a key • Wealth Segment and value offering for business business segment has owners. agreed to service this segment with one combined • Successful history of offering. collaboration between RMB Private Bank and the • Launched Pers
Slide 23: The key issues
The key issues • Client numbers are small and clients are multi- banked. • Fierce competition. • Biggest revenue potential is in lending and combined financial planning and asset management. • Most clients are business owners. • It is the fastest growing black sector
Slide 24: FNB has strong pipeline
FNB has strong pipeline Race profile of market segments: Note: n = 1,650. Other banks = ABSA, Nedcor and Standard Bank Source: Consumer Tracker Research November 2004 and Amps 2004
Slide 25: Overall segment strategy
Overall segment strategy • Compete with 2 brands
Slide 26: Overall segment strategy
Overall segment strategy • Compete with 2 brands • Continue to enhance RMB Private Bank’s Value offering
Slide 27: Overall segment strategy
Overall segment strategy • Compete with 2 brands • Continue to enhance RMB Private Bank’s Value offering • White-label RMB Private Bank Products and introduce them to the 30 000 FNB Wealth segment clients.
Slide 28: Overall segment strategy
Overall segment strategy • Compete with 2 brands • Continue to enhance RMB Private Bank’s Value offering • White-label RMB Private Bank Products and introduce them to the 30 000 FNB Wealth segment clients. Share support infra- structure. Eliminate pricing arbitrage.
Slide 29: Implementing two brand strategy
Implementing two brand strategy FNB Private Clients RMB Private Bank All delivery Channels All delivery Channels Client facing Stratco Stratco Credit and valuations Contact centre Shared infrastructure Project implementation Financial planning, asset management and structured lending operations Weal
Slide 30: Go to market strategy for FNB Private Clients
Go to market strategy for FNB Private Clients Existing relationships • Someone in a branch • Leverage existing relationships • Relationships managers • No client migration • Structured lending • Revenue growth specialists • 10 to 50 • Wealth management specialists • 8 to 15
Slide 31: Strategy = growth
Strategy = growth RMB Private Bank is a FNB has 30 000 leader in structured Wealth Clients who have lending and limited comprehensive Wealth exposure to these value Management offerings Leverage RMB Private Growth Bank value offerings into out FNB performance Rand Merchant Bank is a Leverage RMB’s s