Standard Bank Group Limited · JSE:SBK
Standard Bank — Investor Presentation (October 2002)
14 slides from Standard Bank's investor presentation, October 2002
Slide 1: The Challenge of Revenue Growth
The Challenge of Revenue Growth OCTOBER 2002
Slide 2: Retail Banking revenue strategy
Retail Banking revenue strategy • Revenue growth driven by: • Simple, clean pricing approach giving customer value • Emphasis on cross-selling • Focus on customer service • Good foundation for a long-term CRM strategy • Sensible investments in people, process and product
Slide 3: Global Retail Banking - major trends
Global Retail Banking - major trends Consolidation New Entrants • An on-going trend, Key Financial Trends • Stand-alone internet coupled with banks diversification • Industry trend on declining product • Retailers margins • Non-financial • Increased focus on non-interest income institutions, Telco’s
Slide 4: Domestic Retail Banking - major trends
Domestic Retail Banking - major trends New Entrants Consolidation • Dis-intermediation • On-going trend in Key Financial Trends • Retailers financial services • Non-financial institutions • Increased • Increased focus on non-interest income oligopolistic growth (long term savings, securities) compet
Slide 5: Fee/Funds Distribution - more fees than funds
Fee/Funds Distribution - more fees than funds (Overall Group – Including Retail) Greater emphasis on fees as a means to increase income … Less reliant on Net Interest Income (NII) Non-Interest Income : Net Interest Income Ratio 3.0 2.5 US/UK/EU US 1997 1997 2.0 US 1991 US/UK/EU 1991 1.5 1.0 e l vail
Slide 6: SBK fee/funds improved despite increased funds margins
SBK fee/funds improved despite increased funds margins RETAIL BANKING 20.0% 15.0% 10.0% 5.0% 0.0% NET INTEREST INCOME NON-INTEREST REVENUE TOTAL NET INCOME SBSA GROUP 2001 HY2002 - YOY 30% 25% 20% 15% 10% 5% 0% NET INTEREST INCOME NON-INTEREST REVENUE TOTAL NET INCOME 2001 HY2002
Slide 7: Good increases have been driven by…
Good increases have been driven by… • Focusing price changes on channels to differentiate • e.g cheque encashment, cash withdrawal, etc • Removing cross subsidisation within products • Removing cross subsidisation across products, segments and channels • Dealing rigorously with revenue leakage • Avo
Slide 8: And this has been driven by simple and clean pricing principles
And this has been driven by simple and clean pricing principles • Pricing must be simple, reduce the number of prices within each product style • Pricing managed at product level (consistent with international best practice) • Pricing rules set for products based on each product’s key segment focus
Slide 9: Product Pricing Guidelines give clear direction to pricing proposals
Product Pricing Guidelines give clear direction to pricing proposals Product Pricing Guidelines – Based on Key Segment Focus Segment Pricing BUSINESS TEEN/ Principles MASS STUDENT AFFINITY PRIORITY PRIVATE SME COM AGRIC Differential Pricing Fixed Fixed Fixed/Simple Fixed/Simple Fixed/Simple Fixed/Si
Slide 10: Cross-sell growth primarily from mass market embedded products
Cross-sell growth primarily from mass market embedded products... Funeral Plan Penetration in the Mass Market Base 3,000 14.6% 15.0% 13.1% Account Base ['000] 2,000 10.0% Penetration [%] 8.4% 1,000 5.0% - 0.0% 2000 2001 HY2002 ACC BASE PENETRATION
Slide 11: ..and from the middle market
..and from the middle market There is potential to improve - a strategic focus area to grow revenue in the future Number of other SBSA products/100 cheque accounts (Achievers) 193 167 181 50 2000 40 2001 32 33 31 2002 30 23 21 20 19 19 20 17 13 14 15 9 9 10 10 0 CARD PRODUCTS PERSONAL LOANS INVESTME
Slide 12: Infrastructural investments have improved view of customer
Infrastructural investments have improved view of customer • Branch and Call Centre staff see total relationship with customer • Customers are able to discuss entire product set with Call Centre and make changes to their personal information once • Integrated front-end systems with lead management w
Slide 13: Cross-sell will improve with better insight
Cross-sell will improve with better insight • We are achieving cross-sell rates of over 20 products in the upper income brackets supported by relationship managers • Middle income customers frequently have in excess of 10 products • Mass customers have 3 or 4 products, focus is now on increased use
Slide 14: The Road Ahead
The Road Ahead • Sustainable fee increases only possible where there is a clear customer perception of value • Perception of receiving value for money in banking services can only be maintained by continued service excellence • Demonstrate increased understanding and knowledge of our customers in se
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