Citibank Consumer Banking Strategy

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Citibank Consumer Banking Strategy
Press Conference
Prague November 4 2004
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Agenda for today

• Citibank strategy
• Citibank and SME segment
• New commercial offer for SME segment

• Rajeev Chalisgaonkar Retail Banking Head
• Ladislav Krocák Head of CitiBusiness Sales
• Ladislav Krocák Head of CitiBusiness Sales

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Citibank Consumer Bank strategy

• Rajeev Chalisgaonkar

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Consumer Bank History
1999 CitiBusiness - we started to finance and
service small and medium sized companies
2001 Citibank launched personal banking includ
ing Deposit and payment products Credit Ca
rds Personal Installment loans Citibank Onli
ne Internet banking 2003 We launched CitigG
old a range of services for affluent clients
Citibanks corporate banking business has been
present in Czech Republic since 1991
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2004 position

• Our core business lines are
• CitiGold Wealth Management
• We became an established market player in the
  affluent segment with unique range of deposit and
  investment product and financial planning tools
  
• CitiBusiness
• We have built a strong position in the SME
  segment based on innovative credit products and
  relationship based approach
  
• Credit cards
• We are the third largest local issuer with top
  rated products in terms of security additional
  features and the length of interest free period
  
• Consumer loans
• We provide to our customers largest unsecured
  personal loans without guarantors or any other
  additional security for bank

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2005 Strategy

• Wealth Management and CitiBusiness
• 4 new branches to be opened in Prague Liberec
  and Olomouc
  
• Focus on providing value added advisory services
  and product innovations
  
• Credit Cards
• Expand sales network introduce new sales
  channels
  
• Even stronger focus on product development and
  security (Photo sign extended fraud coverage)
  
• Personal Instalment Loans
• Expand distribution channels
• Lending against investments in mutual funds or
  deposits
  

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Future Vision

• Leading Player in the market in Credit Cards
• Leading Player in the market in Wealth
  Management
  
• Key Player in SME segment - CitiBusiness
• Key Player in Consumer Loans

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Focus on Wealth Management

• Superior service standards
• Trained and internationally certified CitiGold
  personal bankers and investment consultants
  
• Dedicated service areas for CitiGold clientele in
  branches
  
• Global standard CitiPhone banking - dedicated
  CitiGold phone lines 24x7
  
• Unique investment planning tools CitiGold
  Wealth Planner
  

• Distribution of investment products of top rated
  providers
  
• 20 of our clients total savings in Citibank is
  in mutual funds and structured notes compared to
  country average of 9
  
• More than 180 investment mutual funds and unique
  deposit products market linked and premium
  deposits CitiOne saving account
  
• Free of charge banking services for customers
  that keep min. CZK 200 000 of their savings with
  the bank

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Focus on direct banking

• 94 of all transactions are initiated via
  internet minimum goes through branches
  
• 40 customers use both Citibank debit and credit
  cards
  
• Most of our customers visited branch only once
  some of our customers never visited our branches
  (everything was agreed on-line or during a
  personal visit of their banker)
• All products including current account can be
  opened based on internet application

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Focus on credit cards

• Aggressively expand and diversify the Sales
  network to attain market leadership in cards
  
• Recruit the best Sales Force talent in the
  country.
  
• We already have the strongest product offering in
  the cards market.
  
• Most secure card in the market!
• Zero liability (free feature) for all reported
  lost/stolen cards
  
• Unique Photo Sign feature - over 70 of our
  customers use it.
  
• State-of- the-art anti-fraud management systems
• Up to 55 days interest free period Unique in
  the market!
  
• 5 minimum payment facility Best in the
  market!
  
• Citibank individualni program splatek Unique
  value proposition to manage ever better
  flexibility.
  
• Unique promotional pricing to reward the customer
  based on usage.
  
• Further innovations and development of new
  product features to continue our strong value
  proposition and image.
  

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Focus on personal loans

• Expansion of target market and refocusing on
  smaller loans below 80.000 Kc todays average
  installment loan is 120 000 CZK
  
• 150 growth in number of consumer loans in 2005
• Product innovations
• secured overdraft - lending against investments
  in mutual funds or deposits
  
• home equity loans - American mortgage
• Expansion of distribution channels
• Direct sales channels
• Remote sales channels phone selling
• Dedicated loan specialists in branches

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Citibank and SME segment

• Ladislav Krocák CitiBusiness Head

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Looking back.We launched an SME Bank in 1999
Original research findings about Czech SMEs in
1999
The SME Bank Model CitiBusiness

• They will adopt new technology as long as it
  brings real benefits to them
  
• They are professional businessmen and not banking
  experts our products must add value to their
  business and be simple to use
  
• Czech SMEs need capital to invest as much as to
  smoothly run current operations
  
• Speed and predictability of credit approval
  process is key - their success is about long term
  strategy as much as being able to take up
  tactical opportunities.

Service Distribution Model New credit proce
ss
New Product Set
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Service Distribution Model

• New dedicated service distribution channels
  based on active direct banking principles
  
• Internet Banking for SMEs Special Business
  Debit Card
  
• Relationship managers - mobile bankers
• Phone based day-to-day service support

• 100 of CitiBusiness clients use internet
  banking
  
• 99.7 of all transactions are done on-line
  including cross border and loan transactions
  (many customers started to use internet because
  of CitiBusiness).
• Over 70 of customers dont need to use our
  branch at all in a year
  
• High customer satisfaction rates - over 90

Citibanks SME clients belong to most active cus
tomers they use Internet Banking extensively

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New credit process

• Implemented program-based lending driven by
  customer needs approval based on simplified
  documentation
  
• pre-grading and indicative offers (free of
  charge) within 24 hours based on basic financials
  
  
• Provide advisory to the customer to ensure we
  match needs by product solutions
  
• We do not charge any commitment fee (zavazkovou
  provizi)

• Our lending to SMEs has grown 57 in 2004
• Simple loans are typically approved within 48
  hours
  
• Portfolio Performance is very good despite
  largely unsecured portfolio

Strong growth in SME lending
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New Product Set

• First to launch a simple unsecured Working
  Capital Loan up to CZK 1.3MM
  
• Launched a pre-approved Loyalty Overdraft
• A complete suit of loan products - building
  blocks for Individual Financing Solutions
  
• Cross-border banking tools leveraging Citibanks
  global reach and capabilities
  
• Pricing programs for different business profiles

• Almost 50 of our active customers are using
  financing products
  
• 69 take-up rate for Loyalty Overdraft a
  pre-approved financing offer (bank does the
  paperwork - Client approves the loan by signing
  a loan agreement.)
• CitiBusiness also attracts exporting or importing
  customers that value reliable cross border
  services

A business built around the needs of SMEs
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2005 StrategyContinue and expand our commitment
to the Czech SME sector

• Increase loans to the SME segment by over 50 in
  2005
  
• Come closer to the market - open dedicated
  CitiBusiness Branches starting with Liberec and
  Olomouc in first half of 2005
  
• Facilitate access to EU funded programs by
  providing special bridge loans (Eurocredit) and
  other assistance including advisory
  
• Continue to enhance active direct banking model
  new version of CitiBusiness Direct to be launched
  in 1st quarter 2005.
  
• Continue to support SMEs beyond banking
  sponsor SME education (seminars with AMSP and
  CzechInvest)

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Special CitiBusiness Offer

• We invite new customers to experience
  CitiBusiness through trial periods for business
  banking services.
  
• A) For new customers that will open CitiBusiness
  account
  
• Banking services in the value of CZK 15.000
• 5-10 months free CitiBusiness account depending
  on pricing program selected
  
• Free CitiBusiness Account includes
• Internet banking
• account maintenance for unlimited number of
  accounts
  
• Domestic payments incoming and outgoing
• Up to 2 international payment cards
• Up to 25 ATM withdrawals a month
• Incoming cross-border payments
• B) For customers that will choose use any of
  our credit products we offer
  
• No loan approval fee (saving costs up to CZK
  15000) free Citibusiness account for 1 year
  
• Offer is valid till January 31st 2005