permanent%20tsb

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Creation of 3rd Banking Force

• Complementarity of TSB Irish Permanent
• Distribution reach product breadth
• Exclusively Ireland retail focus
• Opportunity to offer alternative to BOI/AIB
  duopoly

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A Powerful Competitive Force

• Mortgages 23
• Savings 12
• Current Accounts 10
• New Car Finance 20
• Life Pensions 20

Customer Base of over 1 million
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Multi-Channel Mortgage Distribution
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Creating a New Bank - Challenges

• Integration of I.T. platform
• Pace extent of HR change agenda
• Compatibility of cultures
• Customer retention service

Business as usual
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Implementation Plan - Timeline
To Launch
Steady State
End Game

• Rebranding
• Branch Amalgamations

PTSB

• Centralisation of broker business

• Organisation changes
• Infrastructure to support integration project

PTSB

• Self-service banking
• Single view of customer

Degree of Change
PTSB

• Centralisation of mortgage processing
• Piloting self-service banking
• Back book conversion to Unibanks

• Single product set
• New Business conversion to Unibanks system

IP
TSB
2003 and beyond
June 2002
2001
Dec 2002
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IT Integration - Timeline
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Integration Programme - Governance
Integration Steering Group
Integration
Executive
Branding Premises Transition IT Infrastructure IT
Applications HR Transition
Products Sales Distribution Customer
Services Risk Head Office Functions
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I.T. Agenda

• Single base platform - Unibanks
• real time
• customer centric
• single customer view
• Layered applications architecture
• independent of platform
• add applications / functionality
• CRM strategy
• single customer databases
• work to be done on cleansing data
• incrementally add cross-channel CRM capability

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H.R. Transition

• Population of new management structures
• Comprehensive training programme
• products
• systems
• Reduction of over 500 staff
• Harmonisation of TCs
• Buoyancy of business offsetting change fatigue

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

• Building branch consultant salesforce
• currently 65
• target 80
• Training of 800 branch staff
• competency testing
• licensing
• co-ordinators

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Bancassurance - Implementation

• Integrated technology support
• Siebel - consultants now - branch staff to
  follow
• open diary system for consultants
• ePoS to follow
• database (IL/ptsb) for marketing campaigns

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Bancassurance Performance

• Excellent 2001 outcome
• sales up 95 in combined / network
• despite major disruption uncertainty
• 2002 SSIA campaign - life product
• 36 of bank sales (versus 15-20 for market)
• Target to double (2001) volumes by 2004

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Mortgage Lending - Market

• Strong fundamentals
• Rebound from slowdown in H2 2001
• Increased competition between domestic players
• Margins stabilised
• No deterioration in credit quality

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Mortgage Lending

• Key product segment
• profitable
• low risk
• cross-selling opportunity
• Multi-channel distribution
• branches - leverage off Irish Permanent brand
• intermediaries - centralised/dedicated channel
• Targets
• business as usual during integration
• all branches up to I.P. level of productivity

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Other Lending

• Consumer Finance
• new car sales biggest component
• registrations down
• adding to distribution
• Business / commercial
• targeting smaller end of SME sector
• selective on commercial lending
• increasing capability

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Resources / Deposits

• Building on strong TSB franchise
• Benefit of inertia in low interest rate
  environment
• Targeting increased share of customer accounts
• Packaged offering to attract account transfers

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Cost Agenda

• Deliver merger synergies of 27m by 2003
• Target further cost reductions in 2004
• additional 10m in savings
• keep costs at 2002 level
• Continue to drive down costs towards target 50
  ratio

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Merger Cost Savings
2002 2003 2004 m m m Staff 9 18 23 Overheads
5 9 9 Depreciation on capital (4) (5) (5)
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27
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Banking Cost Ratios

• Actual Estimated Target
• 2001 2002 2004
• Cost/Income
• Reported 65 65 55
• Incl. bancassurance VNB 60 58 49
• Costs/assets 1.3 1.2 1.0

operating costs
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Banking Margins

• Residential mortgages - competitive
• Retail deposits - will benefit from increase in
  rates
• Consumer finance - steady
• Treasury - lower contribution going forward

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Summary

• Tremendous progress on merger of two banks
• On target to deliver synergies
• Challenging cost agenda
• Opportunities in banking and bancassurance

A LOT DONE, MORE TO DO