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Postbanken Norway

Berlin 120308 Jarle Mortensen

A modern multi concept retail bank

Issues to be covered in today's presentation

· Background of Norwegian Postbank ­ the story · The evolution of Postbanken the last 10 years · Result and strategies

· · · · Sales development Transaction development Product and price strategy Marketing and branding

· Conversion of a traditional Post office into Post in Shop

Postbanken has a 55 year long history of cooperation with Norway Post

· 1950: Postsparebanken (Post Savings Bank) established as a part of Norway Post · 1993: Norway Post Bank established · 1995: Merger with Postgiro · 1999: Merger with DnB · 2003: Merger DnB and Union Bank of Norway

Postbanken and Norway Post have a strong relationship with well defined roles and interfaces

· ·

Key roles in the long lasting cooperation: Norway Post:

· · · Ownership physical distribution network Manages the Post employed sales organization Follow up results (sales, transactions etc)

·

Postbanken:

· · · · · Ownership of all customer banking relationships and customer service centers Develop and manage total banking concept IT- systems Directly manage own channels Training etc. of staff based on specific methods developed in cooperation with Norway Post

Source: DnB NOR

Today - Postbanken has 7 channels

Channel (#)

1 2 3 4 5 6 7 Post (303) Customer service centers (41) Call center (113 FTEs; 6,000 calls per day) Internet (1.6 million log-ons per week) Post in Shop, Bank in Shop and rural postmen ATM Real estate (30)

Product/service

All products and services, including payments All products and services All products and services All products and services Reference and transactions Withdrawal Reference for loans

Product range

Postbanken is the 3rd largest retail financial services provider in Norway and highly profitable

· Some key figures: · 1.1 million customers · 1.0 million current accounts · 590 000 Internet bank customers · Among the highest customer satisfaction scores in Norway · ROE through the whole period has varied between 20 ­ 40 % · High and stable market shares in the retail market, e.g: · Mortgage loan: 6,1 % · Deposit/saving: 7,8 % · Mutual funds: 9,5 %

Source: Annual reports; Posten; DnB NOR

The Postbanken concept is focused on simplicity and superior customer value

·

Basic product offering

· · ·

Comprehensive, but basic offering (loans, cards,investment products, mutual funds, non ­ life insurances, life policies) Non complex, "easy to buy" products, e.g., lifecycle product bundles as "Live" Low barriers of entry, e.g., low/no minimum savings amount

·

Personal touch service

· ·

Crisp, easy to understand communication Branches highly visible (dense branch network)

·

Multi-channel with high branch proximity

·

· ·

Norway's densest physical branch network · 42 customer service centers · 303 post branches · 1200 post-in-store (2500 mail carriers) Accessible call-center (6000 calls per day) Modern Internet bank (1.6 million log-ons per week)

·

Low, transparent pricing

· ·

Competitive pricing Transparent pricing structure (e.g., no alternative packages to choose between)

·

Trusted brand

· · ·

Modern Effective Righteous

The group has a multi-channel strategy, where Postbanken targets the mass market

· · · · · The customer chooses channel ­ but the choice can be influenced Changes in customer needs and behavior form the basis for our development of new solutions The distribution channels have different roles and offer customer service in different ways High quality customer service and efficient use of resources demands coordination The brands shall be communicated clearly in all channels

Private banking

4 04

Top segment

Product suppliers Support functions

Investment advisory centers

Product suppliers Support functions

r.n o

dn b

Branches

Norgesgruppen

Bank in Shop

Po

stb an k

Mass market

en .n o

no

80 0 0

on on r rs Pe

Affluent

Norwegian Post

Post offices, Post in Shop

i e ice rv er se

Mass market

Postbanken Branches

Postbanken has the most extensive branch network offered by financial services players in Norway...

Number of branches

Postbanken Sparebank1 DnB NOR* Nordea Fokus

344

1.160 (post in store)

1.504

290 187 135 69

Notes: *187 branches, 16 investment centers (Saga-units) Source: Annual reports

Development of postal network since Postbanken was established (number of branches) ...but the number of postal outlets has also increased since year 2000

6000 4771 1130 4853

5000

4527 1051

1197 3514 474 2909 185 2570 92 1523 3040 2724 1255 2478 378 877 1196 327 1463 1160 303

4000

3000

2000 3476 1000

3641

3656

Post in shops Post offices

0

1940

1950

1960

1970

1980

1990

2000

2005

2007

Norway Post has recently decided to reduce the number of offices with 124 the next three years. 179 Post offices in 2011 will be replaced with Post in Shops.

Transactions are reduced in the postal network...

Development in number of transaction (million transactions)

100 90 80 70 60 50 40 30 20 10 0 78 58 44 27,5 7,5 8,3 6,8 22,1 16 5,6 13,5

Postal offices Post in shops

1996

1998

2000

2002

2004

2006

2007

...while net granted loans through the postal network increased until 2006. 2007 was more troublesome.

Development in granted loans (retail) (number in bn NOK)

25

24,4

24,9 8,1

90 80

20

18,3 16,7 15,2

9,5 3,73 3,8

70 60

15

6,8

10

8,0

50 40 30

8,8 1,5 4,6

6 2,6 6,6 2,4 7,5 2,5

13,1 7,3 7,8 10,1

5

20 10 0

4,6

0

1996E

1998E

Customer centres

2000E

2002

Post

2004

2006

2007

Telephone/Internet

Million transactions (right axis)

Channel efficiency (I) Overall view

70 % 60 % 50 % 40 % 30 % 20 % 10 % 0% Loans Customer centres Financial instrument (savings) Telephone/internet Post

Channel efficiency (II)

80% of current accounts sold through post offices

Number of "LEVE" bundled current account

500.000 450.000 400.000 350.000 300.000 250.000 200.000 150.000 100.000 50.000 -

2002

2003

2004

2005

2006

2007

Channel efficiency (III)

60% of mutual funds sold through post offices

Mutual funds (sales pr year)

6.000 5.000 4.000 3.000 2.000 1.000 -

mill NOK

2002

2003

2004

2005

Norway Post

2006

2007

Postbanken (total)

Channel efficiency (IV)

75% of internet accounts sold through post offices

www.postbanken.no

600.000 500.000 400.000 300.000 200.000 100.000 -

2002

2003

Entered into agreement

2004

2005

2006

2007

Active customer of www.postbanken.no

One challenge is to attract young and modern customers

Postbanken won Gold Medal World Cup in advertising in Chicago 2007

Postbanken's product offering is among the most comprehensive offered by European post banks

Product available ­ Product not available

Loans Mortgages

Country Norway Austria Germany Spain Switzerland Belgium Portugal France Italy Poland Czech Republic Hungary UK Greece Sweden Turkey

Postal Operator Posten Post AG Deutsche post Correos Swiss post La Poste CTT Post La Poste Poste Italiane Poczta Polska Ceska Posta Magyar Posta Consignia Hellenic post Posten PTT

Current account

Savings account

Mutual funds

Pension funds

Life insurance

P&C insurance

Credit cards

­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­

Source: McKinsey (2002)

Thank you, any questions?

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Microsoft PowerPoint - 15a Jarle Mortensen

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