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BancAnalyst Association of Boston November 7, 2003 Jack L. Kopnisky President Key Consumer Bank Michael Orsino National Sales Manager Retail Banking, KeyCorp.

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Presentation on theme: "BancAnalyst Association of Boston November 7, 2003 Jack L. Kopnisky President Key Consumer Bank Michael Orsino National Sales Manager Retail Banking, KeyCorp."— Presentation transcript:

1 BancAnalyst Association of Boston November 7, 2003 Jack L. Kopnisky President Key Consumer Bank Michael Orsino National Sales Manager Retail Banking, KeyCorp

2 PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 FORWARD-LOOKING STATEMENT DISCLOSURE The presentation and discussion, including related questions and answers, and presentation materials, contain forward-looking statements about issues like anticipated fourth quarter and full-year 2003 earnings, anticipated level of net loan charge-offs and nonperforming assets and anticipated improvement in profitability and competitiveness. Forward-looking statements by their nature are subject to assumptions, risks and uncertainties. Actual results could differ materially from those contained in or implied by such forward-looking statements for a variety of factors including: changes in interest rates; continued weakness in the economy, which could materially impact credit quality trends and the ability to generate loans; failure of the capital markets to function consistent with customary levels; delay in or inability to execute strategic initiatives designed to grow revenues and/or manage expenses; consummation of significant business combinations or divestitures; new legal obligations or restrictions or unfavorable resolution of litigation; further disruption in the economy or the general business climate as a result of terrorist activities or military actions; and changes in accounting, tax or regulatory practices or requirements.

3 Net Income by Line of Business Corporate & Investment Banking 40% Consumer Banking 50% Investment Management Services Net Income - 3Q03 Retail Banking Small Business Consumer Finance Corporate Banking KeyBank Real Estate Capital Key Equipment Finance 10% 1

4 Deposit growth Increase cross-sell New client acquisition Adding new KeyCenters and RMs Consumer Finance: reposition and improve cross-sell Business Banking: focus on business development Business Initiatives Business Scale 900 KeyCenters - 2,200 ATMs On-line Clients: 722,000 (37% Penetration) Small Business: 10th largest in loan balances Retail Banking Small Business Consumer Finance Consumer Banking 2

5 Consumer Bank Financial Performance Financial Performance ($ millions) Q303Q203Q302 % Growth Q303 vs. Q302 Revenue Provision for Loan Losses Expenses (Incl Ovhd) Net Income Loans Deposits Transaction MM/Savings CDs 616,102 69, , ,791 29,100 34,999 10,367 10,913 13, ,997 64, , ,969 28,874 34,780 9,902 10,697 14, ,864 70, , ,605 28,243 33,580 9,054 8,949 15, % -0.4% 5.4% 12.4% 3.0% 4.2% 14.5% 21.9% -11.9% 3

6 Progress on Relationship Development Q303Q203Q302 Checking Balances ($ in Millions) Retail Banking Business Banking Net New Checking Accounts Retail Banking Business Banking MM/Savings Balances ($ in Millions) Retail Banking Business Banking Home Equity Balances ($ in Millions) Retail Banking Net New Clients Retail Banking Business Banking Accounts per Customer Retail Banking Business Banking $6,871 $3,116 30,174 (469) $9,687 $1,217 $7,900 10,766 1,030 Relationship Development and Client Acquisition $6,707 $2,865 10,071 (556) $9,531 $1,160 $7,614 3,480 1, $6,074 $2,652 (9,336) (738) $8,029 $916 $6,956 (16,047) % 13% 17.5% NM 57% 21% 33% 14% 26% 2% 7% NM 4

7 Keys Relationship Approach Foundation Elements Human Capital = + Products Geography Segmentation Channels Distinctive Elements Client Knowledge Service & Advice Multiple Solutions Future State Unique Client Experience Consistent Shareholder Return 5

8 Keys Relationship Approach Foundation Elements Human Capital Products Geography Segmentation Channels 6

9 Keys Relationship Approach Market Share Objective: Top 4 Market Share Position Retail Infrastructure Investments $162 Million Acquisition Strategy Measures of Success Market Share Growth Market Earnings Growth Foundation Elements Geography Market Share 7

10 Keys Relationship Approach Profit Tier Segmentation Movement to Life Stage Segmentation Measures of Success Profitability/Client Profitability/Segment Net Client Growth Foundation Elements Segmentation Customers June 1998 Dec 1999 Profitability/Customers June 1998 Dec 2000 ($121) $394 ($104) $532 P1 P2 P3 P4 P5 Dec 2000 $679 ($143) Dec 2002 Dec 2001 Dec 2001 Dec 1999 Dec 2002 $458$618 ($111)($133) Sept 2003 Sept 2003 $727 ($129) 8

11 Client Choice of Channel Key Centers / McDonald Offices ATM Call Center Key.com Keys Relationship Approach Measures of Success Productivity Service Levels Client Satisfaction Foundation Elements Channels Current Scale The scale is 1-10: 1 = Very Dissatisfied 10 = Very Satisfied Client Satisfaction 9

12 Keys Relationship Approach Broad Product Solutions for Consumers and Institutions Loan, Deposit, Investments, Fee-Based Services Relationship Pricing and Packaging Measures of Success Profitable Balance & Fee Growth Product Economic Value Added (EPA) Foundation Elements Products 48% Increase this year New DDA Account Opening 10

13 Keys Relationship Approach Competency-Based Hiring Significant, Continuous Learning and Training Environment Differentiating for High Performance Meritocracy -- Financial Objectives -- Behavior Expectations -- EPA Driven Rewards Measures of Success Employee Satisfaction Retention/Turnover Diversity Foundation Elements Human Capital Retail Turnover Ratio 11

14 Keys Relationship Approach + Distinctive Elements Client Knowledge Service & Advice Multiple Solutions Foundation Elements Human Capital Products Geography Segmentation Channels 12

15 Keys Relationship Approach Client Knowledge Investments in Enterprise Turn Data to Actionable Information CRM System Measures of Success Sales Productivity Conversion Metrics Distinctive Elements 22% Increase During 3 rd Quarter 3Q023Q03 Retail Profit Production 13

16 Keys Relationship Approach Defined Service Behaviors Relentless Consistency Proactive Advice Measures of Success Client Acquisition/Attrition Client Satisfaction Annualized Attrition/Acquisition Grows Service & Advice Distinctive Elements 14

17 Keys Relationship Approach Aggressive, Results Oriented Proactively Acquire Major Share of Wallet Measures of Success Defined Sales Activities Cross Sell Ratio Share of Wallet Multiple Solutions Distinctive Elements Cross Sell Ratio 15

18 Keys Relationship Approach + = Distinctive Elements Client Knowledge Service & Advice Multiple Solutions Future State Unique Client Experience Consistent Shareholder Return Foundation Elements Human Capital Products Geography Segmentation Channels 16

19 Keys Relationship Approach Future State Consistent & Distinctive Service Experience Aggressive, Unrelenting Sales Culture Consumer Banking Growth Supporting Consistent Shareholder Returns 3-5% Revenue Growth 10%+ Earnings Growth ROE 21%+ 17

20 BancAnalyst Association of Boston November 7, 2003 Michael Orsino National Sales Manager Retail Banking, KeyCorp

21 Retain Expand Acquire Relentless Accountability - Daily reports Leaner more efficient structure More one-on-one coaching Retain/Recruit High Performers 18

22 Results DDA Growth 5X Bank Avg. KeyCorp Central New York Loan Growth 2.9X Bank Avg. 12% Net Income Growth 19

23 Question & Answer Session Jack L. Kopnisky President Key Consumer Bank Michael Orsino National Sales Manager Retail Banking, KeyCorp


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