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Irish Life & Permanent Acquisition of TSB Bank December 2000

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Presentation on theme: "Irish Life & Permanent Acquisition of TSB Bank December 2000"— Presentation transcript:

1 Irish Life & Permanent Acquisition of TSB Bank December 2000

2 Acquisition of TSB Bank Brand New Bank Permanent TSB Our Vision No. 1 Personal Financial Services Provider in Ireland Acquisition creates a Powerful Competitive Force

3 Strategy u“Ireland First” uPersonal Financial Services Sector uCustomer Focus uMulti-channel access uBest in class Bancassurer High quality retail bank a key element

4 Acquisition Criteria uBuild retail market position uComplete full retail product range uShared vision uComplementary uAdds to Shareholder Value

5 Transaction Highlights Financial uConsideration of €430m –1.9 times NAV –P.E. of 13* uEPS enhancing uRevenue and Cost Synergies *2000 estimated net operating profit

6 Transaction Highlights Business uCombined customer base of 1million uLeader in Mortgages - 25%+ Life & Pensions - 20% + uLeading positions in Savings, New Car Finance, Current Accounts uUnrivalled Distribution Mix

7 uFull Clearing Bank uStrong positions in Savings & Personal Banking u300,000 customers u1,300 employees u82 bank branches u13 in-store TUSA outlets (JV with leading retailer) u120 own ATMs and reciprocity with over 1,500

8 uMarket leader in mortgage lending uStrong positions in Savings, Bancassurance & Car Finance uCapital Markets expertise u450,000 customers u1,500 employees u70 branches and c.90 agencies/franchises uExcellent credit ratings - S&P: A+, Moodys: A1

9 Permanent TSB Brand New Bank!

10 Permanent TSB - Product Range uCombined product range for combined customer base uBest of both: –Mortgages –Life, Pensions & Investments –Current Accounts –Car Finance –Savings –Money Transmission –Credit Cards

11 Permanent TSB Branch Distribution uKey to success uCombined network of c. 110 uOverlap of 40/45 branches uEvaluate branches for best fit uRe-engineering programmes in place –“Vision 21” (IP) –“Branch Reformat” (TSB)

12 Permanent TSB non-Branch Distribution Brokers 600 supporting Mortgage Brokers & Intermediaries Agencies 90 agencies & franchises Salesforce 320 strong Irish Life Salesforce In-Store Outlets 13 In-Store outlets, rising to 18 Telephone 24 Hour Telephone Banking Internet Online Mortgages & Personal Banking

13 Permanent TSB - Customers uImproved Market Offering –Wider product range –More competitive product offerings –More access points –Improved service levels –New Services Customer base of 1 million within enlarged Group

14 A Powerful Competitive Force uMortgages25%+ uSavings12% uCurrent Accounts10% uNew Car Finance20% uLife & Pensions20%+ uTotal Assets>€30bn

15 Management & Organisation uHarry Lorton & TSB Trustee (non-exec) to join main Board Group CEO David Went Bank CEO Harry Lorton Dep. CEO & COO Diarmuid Bradley Director of Integration Billy Kane

16 Integration Process uJoint Steering Committee chaired by David Went uDirector with responsibility for Integration: Billy Kane uFair, objective and transparent process u“Best of Both” principle will operate uGrowth opportunities for merged organisation Build on success of Irish Life and Irish Permanent merger

17 Bank Financials* TSB IP uTotal Assets €2.6bn€9.9bn uLoans & Advances €1.7bn€7.6bn uMortgage Loans€1.3bn€7.0bn uCustomer Accounts €2.3bn€4.7bn uPre-tax profit €39.0m€80.8m uNet assets on transfer €227m *1999 other than net assets

18 Financial Benefits uEarnings Enhancing –pre-goodwill –pre-synergies uCost Savings –Branch closures –Integration of group functions –Combined cost base €188m uRevenue Synergies –Sale of life products –Sale of banking products

19 Transaction Structure uTransfer of TSB Bank undertaking into IL&P uConsideration of €430m: –85.1% in cash –14.9% in IL&P shares u14.9% in shares allocated to ESOP –Average closing price over last 10 days

20 Impact on Capital €m TSB Risk Assets1,400 Support Capital (10%) 140 Goodwill 203 Total Capital Required 343

21 Capital Funding €m Capital Required343 Share Buy-back150 493 Financed from: Tier 2 Issue288 Excess Capital140 ESOP Share Issue 65 493

22 Completion Process Binding contract with Trustees, subject to: uMinister for Finance approval uEnabling legislation to allow sale uRegulatory clearances Target completion end Q1 2001

23 Summary uPermanent TSB - a powerful personal retail bank –More customers –More products –Better access uIL&P - an important strategic step –Best in Class Bancassurer –Powerful competitive force –Increased financial strength –Growing shareholder value

24 Brand New Bank Best in Class Bancassurer

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