Presentation on theme: "Group C5 / A14 Final presentation - Strategic Management Four-Continent Social Consulting Group B.V. USA – Japan – France - Brazil/Colombia Simi Gambhir."— Presentation transcript:
Group C5 / A14 Final presentation - Strategic Management Four-Continent Social Consulting Group B.V. USA – Japan – France - Brazil/Colombia Simi Gambhir Katsuya Nakamura Thierry Zedda Renata Peregrino de Brito Antonio Patron Technology StrategyImplementation
Group C5 / A14 Final presentation - Strategic Management Where will we draw the line?
Group C5 / A14 Final presentation - Strategic Management SUSTAINABLE BANKING Triodos Bank
Group C5 / A14 Overview Banking Industry OverviewBanking Industry Overview What is Triodos Bank?What is Triodos Bank? Financial AnalysisFinancial Analysis Strategic IntentStrategic Intent RecommendationsRecommendations
Group C5 / A14 Overview How do banks function? International Markets Financial Markets HouseholdsCompanies Imports Taxes Savings Exports Investments Consumptions Production Government The Changing Environment of Banks. M.H.A. Jeucken, J. J. Bouma. GMI Theme Issue: Sustainable Banking, 1999.
Group C5 / A14 Sources of Income for a Bank Interest EarningProvision Earning Work on its own behalf and risk. Interest income received on loans minus the interest expense for borrowed funds Works on behalf of and at the risk of its clients. Securitization and investment banking Banking Industry
Group C5 / A14 4 Main Functions of a Bank Transform money by scale Transform money by duration Banking Industry Creditors have short-term surpluses, while debtors have long-term needs Money surpluses of one person are not the same as shortages of another
Group C5 / A14 4 Main Functions of a Bank Banking Industry Transform money by location Bank brings money from a creditor in Rio to a debtor in Rotterdam. Risk Assessment Value the risks of various investments
Group C5 / A14 Overview Triodos (tree-odos): from the Greek “tri hodos” meaning “three way approach” Social Financial Ethical
Group C5 / A14 “The Triodos Bank aims to be a pioneering force in the world of sustainable banking … to contribute to a more decent, dignified and kinder society and a world that respects people, the environment and culture.” Mission
Group C5 / A14 Objectives Provides funds for entities that add value to society, culture or the environment Information Profit Funds Makes funding and investment decisions transparent to customers Funds are economically sound and positively impact the bottom line
Group C5 / A14 Key Dates in History 1971 Triodos Foundation established 1980 Triodos Bank fully licensed in The Netherlands 1990 First ¨Green fund¨ offered and listed on the Amsterdam Stock Exchange (AEX) 1993 Belgian branch opened 1995 UK branch opened 1997 Triodos Green Fund on AEX 1998 Solar Investment Fund introduced 2004 Spanish branch to be opened
Group C5 / A14 Products and Services Personal Savings Fairtrade Saver Medical Foundation Amnesty Saver Organic Saver Earth Saver Just Housing Dana Partnership Shares and Funds Cafédirect Share issue Ethical Property Company Golden Lane Housing
Group C5 / A14 Bank Borrowers Depositors Triodos Depositors Borrowers Transparency Financial Return Maximization Customer Characteristics Vision Financial & Social
Group C5 / A14 DepositsLoans Key Figures 20% in average (000s) Rapid growth (000s) 20% in average Data source: Triodos Annual Report
Group C5 / A14 Data source: Triodos Annual Report Loan Deposit 3years Key Figures Saving-lending mismatch due to rapid growth and time lag Ratio of Loans to Deposits % of Deposits (ABN AMRO:90%) (000s)
Group C5 / A14 ABN AMRO Bank Key Figures Pre-tax profits % of total assets Triodos potential (90% util of deposit) Social projects can be profitable Not only Financial, but Social Return Data source: Triodos Annual Report
Group C5 / A14 Sustainability & Strategy In the Banking Industry: Slow change Reduces Risk for Lending But also bring new opportunities The Sustainaility concept in Business: Long term strategy in a profit maximization world Being conscious of limited resources
Group C5 / A14 Sustainable banking Offensive banking Preventive banking Defensive banking Sustainability Typologies Four different attitudes commercial and investment banks have towards sustainability. Sustainability as a core strategy Look for highest sustainable rate of return Applicable to niche players The Changing Environment of Banks. M.H.A. Jeucken, J. J. Bouma. GMI Theme Issue: Sustainable Banking, 1999.
Group C5 / A14 Models of Sustainability Business Leaders Employees Business Policy Business Practise Bank Public Administration Regulations NGO´s Investors Sustainability as new banking strategy Sustainability as value driver O. Weber, R. Reiland and B. Weber, “Sustainability benchmarking of european banks and Financial Service organizations” 2002. ETH.
Group C5 / A14 “…seeks to restore a sense of relationship between depositor and borrower which […] tends to be broken in normal banking practice.” (C.J. Cowton, 2002) Affinity Finance
Group C5 / A14 Investments go beyond the usual risk and return analysis Specify more precisely the uses of funds Low annual expenses (overhead) Fee charges Diversification: Insurance products First mover advantage Few business sectors ValueValue CostCost Speed Costumers Competitor Company Value, Cost and Speed
Group C5 / A14 Strategy Implementation External: The bank only invests in social and environmental harmless business, projects and sectors. Annual Report The Meerwaarde Fund Internal: ISO 14001 certification for environmental management Gender equality regarding salaries
Recommendations Alliances & Partnerships Problem Recommendation: Valuable partner to other financial institution Exchange: sustainability expertise & brand recognition Access to new customers and markets. Opportunity
Group C5 / A14 Recommendations Sustainable Growth How to keep the same transparency level? Problem Recommendation: “Keep small” Change the current level of information Opportunity Problem
Group C5 / A14 Recommendations Ratio of savings to lending. Are sustainable initiatives limited? Problem Recommendation: Administrative speed to evaluate and reach new market Risk taking attitude - less mature projects Opportunity Problem
Group C5 / A14 Recommendations Customer Service Problem Recommendation: Inclusion of payment services: debit & credit cards, and internet banking Incorporate the banking facilities Opportunity Problem
Group C5 / A14 Recommendations European Focus Problem Recommendation: Local resistant to foreign bank Do not ignore US market. Opportunity Us Market US$ 2.16trn European Market € $ 336bi 18.7% Problem
Group C5 / A14 Conclusion So…what can you do to support sustainability?