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Harry Lorton, CEO. zComplementarity of TSB & Irish Permanent zDistribution reach & product breadth zExclusively Ireland & retail focus zOpportunity to.

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Presentation on theme: "Harry Lorton, CEO. zComplementarity of TSB & Irish Permanent zDistribution reach & product breadth zExclusively Ireland & retail focus zOpportunity to."— Presentation transcript:

1 Harry Lorton, CEO

2 zComplementarity of TSB & Irish Permanent zDistribution reach & product breadth zExclusively Ireland & retail focus zOpportunity to offer alternative to BOI/AIB duopoly Creation of 3rd Banking Force

3 zMortgages23%+ zSavings12% zCurrent Accounts10% zNew Car Finance20% zLife & Pensions20%+ Customer Base of over 1 million A Powerful Competitive Force

4 Multi-Channel Mortgage Distribution Branches 43% Agents 7% Brokers 45% Life Salesforce 5%

5 zIntegration of I.T. platform zPace & extent of HR change agenda zCompatibility of cultures zCustomer retention & service Creating a New Bank - Challenges Business as usual

6 Implementation Plan - Timeline IP TSB zSelf-service banking zSingle view of customer PTSB Degree of Change 2001 June 2002 zOrganisation changes zInfrastructure to support integration project 2003 and beyond To Launch zRebranding zBranch Amalgamations Steady State PTSB End Game Dec 2002 zCentralisation of broker business zCentralisation of mortgage processing zPiloting self- service banking zBack book conversion to Unibanks zSingle product set zNew Business conversion to Unibanks system

7 IT Integration - Timeline

8 Integration Programme - Governance Integration Steering Group Integration Executive Programme Management (Incl. Benefits Tracking & Communications) Branding Premises Transition IT Infrastructure IT Applications HR Transition Products Sales & Distribution Customer Services Risk Head Office Functions

9 I.T. Agenda zSingle base platform - Unibanks real time customer centric single customer view zLayered applications architecture independent of platform add applications / functionality zCRM strategy single customer databases work to be done on cleansing data incrementally add cross-channel CRM capability

10 H.R. Transition zPopulation of new management structures zComprehensive training programme products systems zReduction of over 500 staff zHarmonisation of T&Cs zBuoyancy of business offsetting change fatigue

11 Bancassurance - Structures CEO Bank Regional Managers CEO Life Branch Managers Branch Staff Head of Bancassurance Bancassurance Consultants

12 Bancassurance - Implementation zBuilding branch consultant salesforce currently65 target80 zTraining of 800 branch staff competency testing licensing co-ordinators

13 Bancassurance - Implementation zIntegrated technology support Siebel-consultants now -branch staff to follow open diary system for consultants ePoS to follow database (IL/ptsb) for marketing campaigns

14 Bancassurance Performance zExcellent 2001 outcome sales up 95% in combined / network despite major disruption & uncertainty z2002 SSIA campaign - life product 36% of bank sales (versus 15-20% for market) zTarget to double (2001) volumes by 2004

15 Mortgage Lending - Market zStrong fundamentals zRebound from slowdown in H2 2001 zIncreased competition between domestic players zMargins stabilised zNo deterioration in credit quality

16 Mortgage Lending zKey product segment profitable low risk cross-selling opportunity zMulti-channel distribution branches - leverage off Irish Permanent brand intermediaries - centralised/dedicated channel zTargets business as usual during integration all branches up to I.P. level of productivity

17 Other Lending zConsumer Finance new car sales biggest component registrations down adding to distribution zBusiness / commercial targeting smaller end of SME sector selective on commercial lending increasing capability

18 Resources / Deposits zBuilding on strong TSB franchise zBenefit of inertia in low interest rate environment zTargeting increased share of customer accounts zPackaged offering to attract account transfers

19 Cost Agenda zDeliver merger synergies of 27m by 2003 zTarget further cost reductions in 2004 additional 10m in savings keep costs at 2002 level zContinue to drive down costs towards target 50% ratio

20 Merger Cost Savings 200220032004 mmm Staff91823 Overheads599 Depreciation on capital (4)(5)(5) 102227

21 Banking Cost Ratios ActualEstimatedTarget 200120022004 %% Cost*/Income Reported656555 Incl. bancassurance VNB605849 Costs*/assets1.31.21.0 * operating costs

22 Banking Margins zResidential mortgages - competitive zRetail deposits - will benefit from increase in rates zConsumer finance - steady zTreasury - lower contribution going forward

23 Summary zTremendous progress on merger of two banks zOn target to deliver synergies zChallenging cost agenda zOpportunities in banking and bancassurance A LOT DONE, MORE TO DO


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