Growth strategies in retail banking Study - Roland Berger

LJUBLJANA
BELGRADE
PRAGUE
TALLINN
RIGA
VILNIUS
WARSAW
BRATISLAVA
BUDAPEST
ZAGREB
BUCHAREST
SOFIA
Growth strategies in retail banking
Study
Zagreb, June 27 th , 2006
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1

Contents Page
A. Development of CEE banking market 3
B. Successful retail business models 12
C. Potential development of the Croatian retail banking 32
This document was created for the exclusive use of our clients. It is not complete unless supported by the underlying detailed analyses and oral presentation. It must not
be passed on to third parties except with the explicit prior consent of Roland Berger Strategy Consultants.
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LJUBLJANA
PRAGUE
BELGRAD
TALLINN
RIGA
VILNIUS
WARSAW
BRATISLAVA
BUDAPEST
ZAGREB
ZAGREB
BUCHAREST
SOFIA
A. Development of CEE banking markets
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The CEE banking market has experienced three
distinct phases
Banks
Customers
Foundation 1990-1995
Countries start building full
functioning banking sector
Foreign investors start
entering the market
Market focus on corporate
banking
Consumer banking market
still immature
Privatization 1995-2000 Consolidation 2001-...
Privatization of state
owned banks
Foreign banks start buying
local banks
Bankruptcy of some new
local banks
Competition in corporate
banking increases
Retail banking market
develops
Competition heats up, especially from
foreign players
Markets are "underbanked" in
capitalization and product penetration
International banks start to review
their CEE strategy
Corporate banking market becomes
mature
SME market segment starts fast
development
Huge potential perceived in retail
lending market and investment fund
business
Phase 1 Phase 2 Phase 3
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Bank privatization is almost complete in CEE
% banking assets controlled
by the state, 2005
23.9%
SE
21.0%
19.1%
PL SL RO
5.0% 4.5%
3.1%
2.0% 1.8%
0.0%
CZ
HR
BG
SK
Comments
Source: Central banks, ECB, Raiffeisen Research "CEE Banking sector report, 2005
HU
Poland: The state reduced its majority stake in PKO
through a public offering in 2004; sold stake in BGZ to
Rabobank and EBRD
Serbia: Privatization took off in 2005, 4 small banks
privatized din 2004/ 2005, Vojvodjanska (#4) up for sale
Bulgaria: Privatization complete in 2003
Romania: CEC privatization ongoing, BCR completed
Croatia: Croatia Banka and HPB - Postanska Banka
Notes: Updated to reflect BCR’s privatization in 2005: A stake of 62% of BCR was sold to ERSTE Bank
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Four groups of regionally-diversified CEE banks
can be distinguished
1
3
Local champions
OTP
PKO BP
Strong presence in
selected markets
KBC
Erste Bank
Banca Intesa
ING
= Asset share foreign banks,
as of end 2004
ERSTE
KBC
SocGen
BA CA
KBC
SocGen
BA CA
Overview foreign players
94%
UniCredito
BA CA
Citibank
ING
PL
CZ SK
68%
97%
80%
36% HU RO
SV HR 91%
UniCredito
Banca Intesa
Raiffeisen
89%
Foreign banks with market share of 77 % in CEE countries!
Banca Intesa
ERSTE
Raiffeisen
BG
75%
Banca Intesa
Bayern LB
ERSTE
KBC
ERSTE
Raiffeisen
SocGen
ABN
Amro
2
4
Comprehensive
regional players
UniCredito/ BA CA
Raiffeisen
Societe Generale
Citibank
Volksbank
Specialists and
opportunistic
players
Allied Irish Bank
BCP Millenium
Fortis
Credit Lyonnais
ABN Amro
BNPParibas
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A second wave of M&A activities is expected as
smaller foreign banks will review their CEE strategy
Banks
1)
2)
Countries
2005
9
7
5
7
1
2
1
1
Total Assets
in CEE, 2004
[EUR m]
15,600
4,100
5,500
16,500
6,500
5,300
5,100
1,600
Notes: 1) Focus Poland/only small subsidiaries in other countries 2) 2 as of 2005 (HU and BG)
Foreign players of small size/ with limited
presence review their CEE banking strategy,
might consider exit
Second wave M&A activities expected/
already happening (e.g. OTP’s appetite for
more CEE assets, divestments by Unicredit
in Croatia)
Consolidation within foreign banking players
expected
Opportunities for "late entrants" or further
consolidation of the banking sector
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CEE markets are attractive because they are
underbanked compared to the EU
Banking assets
% GDP, 2005
350
300
250
200
150
100
50
0
EURO zone
75.913 EUR
SV
14.658 EUR
CZ HU
PL
Croatia: level of financial intermediation
highest in CEE
Despite restrictive measures by the central
bank, continuing to grow powerfully
Level in Croatia still behind Euro zone,
leaving room for future expansion
Croatia
8.030 EUR
0 5 10 15 20 25 40 30
Notes: 1) 2002-2005 CAGR for banking assets; The size of the bubble represents the banking assets/capita
Source: Roland Berger Strategy Consultants, BA-CA CEE Report, ECB, Eurostat, Central banks
SK
BG
RO
CAGR 1) %
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Croatia is the leading CEE country on retail lending
– Even more than on retail deposits
Retail lending as % of GDP Retail deposits as % of GDP
4.4
15.3
10.0
4.5
2.1
0.5
18.2
10.9
5.9
5.0
2.8
0.7
24.0
12.4
8.8
6.5
3.7
1.4
28.5
12.6
12.5
8.3
3.8
6.2
31.5
14.9
9.9
4.6
13.1
10.4
37.8
16.5
12.0
2000 2001 2002 2003 2004 2005
52.6% EU 12 54.4% EU 12
7.7
1)
15.9
14.0
HR
BG
HU
PL
CZ
RO
Notes: For EU 12, retail lending and deposits include non profit institutions serving households
Source: ECB Monthly Bulletin, CEE Banking Sector Report 2005 by RZB Group,
1) Data for 2005 estimated – CAGR 20%
CEE Household Credit report by Unicredit
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31.3
27.8
13.4
36.6
24.4
9.8
43.8
37.5
29.5
24.9
17.0
10.6
41.1
41.9
42.8
35.8 35.2 35.1
30.1
23.9
17.6
10.5
26.1
24.7
19.9
10.1
25.4
23.7
23.2
10.2
44.0
38.2
27.8
22.9
10.9
2000 2001 2002 2003 2004 2005
1)
25.9
HR
CZ
BG
HU
PL
RO
9

Low mortgage penetration will drive growth in retail
lending, probably more than consumer finance
Mortgage lending as % GDP [%] 2005 Consumer lending as % GDP [%] 2005
EU 12
HR 1)
HU
CZ
PL
RO 2.0
5.3
BG 4.6
11.0
9.5
8.6
36.6
CAGR 2)
10%
18%
66%
50%
26%
124%
98%
EU 12
Notes: For EU 12, retail lending includes non profit institutions serving households 1) Data for 2005 estimated 2) CAGR 2000-2005
HR 1)
Source: Banking structures CEE (ECB), ECB Monthly Bulletin, CEE Banking Report 2005
BG
PL
HU
RO 5.8
7.4
CZ 6.2
9.5
11.2
16.0
24.0
CAGR 2)
4%
25%
65%
10%
32%
33%
102%
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Shrinking margins will force banks to increase
operational efficiency – Croatian banks already in
good shape
Average interest spread Cost-Income Ratio, [%]
25%
20%
15%
10%
5%
0%
20,6%
12,7%
7,6%
7,2%
17,2% 16,1%
11,1% 11,0%
8,8%
6,6%
7,7%
7,3%
14,7%
13,7%
9,1% 9,2%
11,5%
8.0%
7,0% HR
7.6%
6.4% BG
6,7% 6,6%
5,9% PL
2000 2001 2002 2003 2004 2005
Notes: 1) Calculated for top 10 banks
Source: National Banks, WOOD Company CEE Banks-" Managing South East"
RO
62.8%
RO 1)
61.0%
58.9%
56.7%
PL SK BG
53.3%
HR
50.5%
HU
46.3%
CU
45-50%
EU best
practice
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B. Successful retail banking business models
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CEE banking markets are selling markets, with a
focus on expansion and less on cost management
Key success factors
1
Strategy
Positioning: Universal or
niche bank?
2 Distribution
Alternative channels
Network optimization and
expansion
3 Marketing & Sales
effectiveness
Marketing/ Communication
Cross Selling
Sales empowerment
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Staff, strategy, marketing & sales, distribution are
seen as key success factors in CEE
Top success factors in CEE banking
Staff
Strategy
Marketing & Sales
Distribution network
Speed/Time to market
Pragmatism
Customer base
Risk management
Front office processes
Back office processes
Cost management
Products
Internal organization
IT
8%
8%
12%
19%
19%
25%
25%
25%
31%
38%
50%
58%
58%
Source: "Key factors for success of banks in CEE" by EFMA and zeb/
77%
Comments
Staff: management talent is scarce
Strategy: universal bank or niche
bank
Marketing & Sales: transform
branch staff from administrators
into sales-driven, customer oriented
Distribution:
– Usage of alternative channels is
high in CEE
– Modern trends regarding branch
locations: malls, supermarkets
– Invest in branch expansion to
close gap with EU in terms of
branch density
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STRATEGY
Most banks offer universal services, but specialist
and niche players have also proven successful…
Market Positioning– CEE examples
Broad
Product
portfolio
Narrow
Focused player Universal
C D
A B
Niche player Product Specialist
Narrow Distribution channel/segment Broad
Comments
A Niche player, with focus on few
products and/or distribution
channels with competitive advantage
B Product specialist, with focus on
few products, but extensive,
innovative distribution channels
C Focused player, on distribution
channel/client segments with broad
product portfolio
D Universal bank, with a wide range
of products and distribution channels
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STRATEGY
…which are sometimes interim stages on the
development path to become a universal retail bank
Examples of implementation strategies
Broad
Product
portfolio
Narrow
Focused player Universal
Niche player Product Specialist
Narrow Distribution channel/segment Broad
Implementation strategies
2003: Offer basic account, loan an
deposit through mini branches –
high marketing cost for branding
2004: Offer mortgage loan products of
other banks (3rd party provider)
2005: Develop internet offer, credit cards
Step 1: Consumer finance through POS
Step 2: Usage of intermediaries
Step 3: Own sales units/branches, offer
deposits, enter micro companies
segment
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STRATEGY EXAMPLE
Lukas bank of Poland focuses on consumer finance
to build up a large customer base
Product
Installment loans to individual customers, for
products and services purchase, cash and car
loans, mortgage loan with a free of charge analysis
of a loan application within short period
Target: mass clients, high number of clients over 50
years – low risk group as far as loan repayment is
concerned
Plans to enter the segment of small enterprises
Implementation of a new central IT system
Customer
Distribution
Consumer finance
(Credit Agricole)
large customer base
Branch location in the centers of large and smaller
towns, areas close to shopping centers and block
of flats settlements
Co-operate with more than 31,000 shops, service
points and networks of big department stores
where customers can buy and finance the goods
Extensive promotional campaigns and high
spending on marketing
Substantial increase of revenue and profitability in
2004; ROE 73%, net profit EUR 68 m
Results
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STRATEGY EXAMPLE
Provident Polska focuses on the low income
segment and delivers cash loans at home
Product
Cash loan up to 1.250 EUR for max. 1 year, pure
mono-line
Competitive interest rates, but very high
commissions; high effective interest rates (100-200%)
Fast turnover, high margin, low interest rate risk –
cash loans are small and short term
Target: low income segment
Value proposition: Easiness of getting the cash
loan – no bank account, no guarantors, relative fast
(in 48 hours), only guarantee is the confirmation
about salaries from last 3 months
Customer
Distribution
Cash loans for the low
income segment
Delivery and collection by representatives at
customers' home
Close contact with client through representatives
Representatives´ commission based on collection
Increasing network of small purely sales offices
(223) in the whole country
Alternative approach to credit standing evaluation,
base for the evaluation is the home of the client
Simple, but effective risk management process
(bad loans: market standard)
Bad loans sold to companies specialized in the
collection of receivables
Risk Management
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STRATEGY EXAMPLE
Polish credit unions (SKOKs) are also successful in
tapping the lower income segment
Strategy
Implementation
Results
Non-profit associations focusing on simple products targeted to low
income customers (members) and relying on personal relationships in local community
Favorable legal status for credit unions in Poland (no capital requirements, no income tax until
end 2006, etc.)
Fast service through decentralized and simple processes
Attractive pricing
Internal stabilizing fund and guarantee system
New services: investment funds, life insurance, mortgage products
Fast growth and increased profitability in recent years
One of the most successful concepts for providing services in savings and deposit segment
A new competitor for traditional banks
Assets of SKOK now account for over EUR 1 bn
The number of members grew by 29% annually reaching 1,3 m members at the end of 2005
The number of cash desks and branches at the end of 2005: > 1.500
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STRATEGY EXAMPLE
MultiBank built up its client base as an internet
bank only – Outlets to support client acquisition
Product
Very innovative solution in the mortgage loan
offer – mechanism of balancing the loan amount
with client savings within the Multiplan
High product flexibility – no fees required for early
repayment and currency change
Target: middle and affluent segment - clear
separation of VIP clients (Aquarius Club) and small
enterprises
Customer
Distribution
Internet bank with
branches for client
acquisition
Multichannel access to the current account –
internet, branches (51), telephone banking, SMS,
WAP
Attractive branch style and equipment give clients
the impression of high service quality and
„closeness" to client
Cooperation with the main intermediaries is
centrally coordinated – the bank cooperates mostly
with big intermediaries – Expander, Open Finance
Promotion
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STRATEGY EXAMPLE
GE Money exploits full potential of customer needs
via cross selling – Professional CRM program
GE Capital Multiservis Czech Republic
Basic Idea Realization by Multiservice
Customer applies
for sales finance
account at POS
to buy e.g.
washing machine
Once acquired
customer gets
"converted"
Cross selling
Customer life
cycle program
% of opening balance
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
1
2
3
Card issued: 4th-6th month
4
x-sell
loans
revolvers
0%
1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46
Month on file
1
2
3
4
Drive customer
acquisition by "sales
finance loan"
products
Drive high conversion
rate by automatic flip
to revolving credit
Drive revolving by
strong cash card
access functionality
Drive x-sell and reactivation
by targeted
offers/ products
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Key success factors
1
Strategy
Positioning: Universal or
niche bank?
2 Distribution
Alternative channels
Network optimization and
expansion
3 Marketing & Sales
effectiveness
Marketing/ Communication
Cross Selling
Sales empowerment
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DISTRIBUTION
Alternative distribution channels offer a faster
payback period with a lower investment
Products and distribution channels – Assessment CEE
Segments/
products
Investment/
Insurance
Mortgage loans
Car loans
Consumer loans
Credit cards
Deposits
Investment level
Size
Low
investments
POS 3rd party/
sales agents
Low
investments
Combinations are difficult Combinations are possible
Mini offices/
sales outlets
Medium
investments
Direct access
Large initial
investments
Standard
branches
Large
investments
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DISTRIBUTION
Eurobank has a "Supermarket-Banking" branch
format – small sales outlets in high traffic locations
Example "mini-office" Configuration "mini-office"
Information material
ATM Sales person
Needed space: 8-12 m 2
ATM (about 50% with deposit function)
2 work places with computer network access
Place to provide information material
Located in places with high visitor rate
(supermarkets, shopping centers …)
High marketing support of EUR 15 m (2004)
resulted in >300,000 clients in 2 years
Investments per "mini-office"
ATM with deposit function USD 15,000
ATM without deposit function about USD
5,000
Other equipment for the office about USD
15,000
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DISTRIBUTION
10% of all mortgage loans in the Polish market were
granted by intermediation of Expander in 2004
Expander: Independent Financial
Intermediary
Offer covers 90%
mortgage
loans in Poland
Cooperation with
20
banks and 70
investment funds
Value of loans in
2004 USD 400 m
21 branches
in 13 cities;
4 years on the
market
Average loan
USD 40.000
120 financial
consultants
Comments
Expander offers a full range of sales services
for deposits, insurance and mortgage loans:
in 2004 10% of all mortgage loans were
granted by Expander
It started in 2000 as an internet portal as the
only distribution channel, evolving into a
traditional branch network of 23 outlets in
2005
Expander was bought by the General Electric
group in 2003
Mainly middle class living in big cities has
used the services of Expander and its
competitor "Open Finance"; people with
average salary for Poland (about USD 600)
use their services
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DISTRIBUTION
Bank BPH is using franchising to expand its branch
network in suburbs and small towns
Outlets and
development
Product
offer
100 outlets mainly in three Voievodships (out of 16)
Bank intends to gain in this way a closer access to the clients in the areas where the
bank does not have its own branch network
350 new outlets by the end of 2005, total number of 600 outlets by 2006
90% of all retail products (savings account, term deposits, credit cards, (cash) loans)
Servicing small business beginning of 2006
Organization Partner incurs all the investment costs connected to setting up the branch
Partner employs staff and sets the level of salary
Bank offers the training for the partners opening the outlets
Break-even point reached as soon as after 3-6 months
Partner receives part of the transaction fees generated by the branch
Preferred locations: suburbs, large settlements of block of flats, shopping centers and
centers of small towns
All operations are carried out on-line and booked directly into the system of the Bank
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DISTRIBUTION
PKO BP, the large savings bank increases access
by the set up of agencies point of sale
Outlets and
development
Product
offer
Organization
Two types of agencies: so called ‘old’ type agencies – located in production plants
and ‘new’ type agencies accessible to all customers: approx. 3,000 agencies
Established mainly in small towns where PKO BP does not have their own branches
and bigger cities in block of flat areas
PKO BP plans to increase the number of products and services available trough
the agency (next to cash handling, opening accounts, loan applications, etc.)
Agencies realize around 20% of all cash operations within the bank, 7% of saving
accounts, intermediation in loan sale – 20,000 loans in value of EUR 70 m p.a. (2004)
Agency functions in the name of and on behalf of the bank PKO BP
A person interested in opening the agency has to be an entrepreneur (run a business)
Decision concerning setting up the agency is taken by the director of the
regional retail department
Agent must provide space for 1 cash teller, space for servicing client with adequate
safety measures (around 30 m 2 with 2 employees), and has to rent a POS terminal
The average investment in the outlet amounts to ca. PLN 10,000
PKO BP provides the agent with software, bank’s logo (free of charge), basic training
Agency cannot employ anyone without the bank’ s acceptance
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Key success factors
1
Strategy
Positioning: Universal or
niche bank?
2 Distribution
Alternative channels
Network optimization and
expansion
3 Marketing & Sales
effectiveness
Marketing/ Communication
Cross Selling
Sales empowerment
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MARKETING AND SALES EFFECTIVENESS
Lessons learned from Spanish banks: Marketing
expenditure is linked to sales success
Share of advertising and communication costs to
all non-personnel costs [in %] 1)
Average CIR
retail segment
Premises costs
100 100
17-23
IT costs 16-26
Advertising/
Communication
45% 76% 78% >80%
...
18-21
Spanish
banks
20-31
19-29
6-10
German
banks
Notes: 1) Sample of selected Spanish and German big banks, 2004
...
100
25-33
10-15
...
Polish
banks
100
15-20
8-12
...
1-4 10-15
Croatian
banks
Comments
Spanish banks have a high
share of marketing and
communication costs
Effective increase in brand
recognition and sales
(Product campaigns, special
offers for target groups, etc.)
Increase in marketing and
advertising costs in the last
few years (e.g. Santander
+8% since 2002) at the
same time decrease in
other non-personnel cost
(e.g. Santander -9% since
2002)
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MARKETING AND SALES EFFECTIVENESS
Cross-selling ratio is another important measure of
sales effectiveness
Cross-Selling Ratios of selected Spanish banks, 2004
[retail segment] 1)
3.3
Banco
Popular
3.4 2)
3.7
3.9 2)
Banesto Santander Banco BBVA
Sabadell
Notes: 1) Analyzed products: current account, deposits, mortgage loans,
credit cards, consumer loans, investment funds, insurance etc. 2) 2002
Source: Annual reports; Salomon Smith Barney
4.5
6.3
Bankinter
Average of
Croatian
banks: < 2.5
Comments
Mortgage loans as anchor
products for cross selling
Example: Santander
customers with mortgage
loans have six products in
average
Bankinter value proposition:
"Most innovative,
highest quality, multichannel
convenience,
personalized services"
based on anchor product
mortgage loans
Usage and development of
sophisticated CRM-Tools
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MARKETING AND SALES EFFECTIVENESS
Variable remuneration for sales employees is a
significant lever to support sales culture
Variable remuneration for sales employees –
EXAMPLES [%] 1)
15-45
Spanish
banks
Variable Fixed
Notes:1) Example of selected Spanish, Polish and German banks (retail segment)
2) Very few Polish banks have variable part up to 50% values only for full time employees
Source: Company's information
10-30
Polish
banks 2)
5-15
German
banks
15-25
Croatian
banks
Comments
Variable remuneration share
for sales staff at Spanish
banks is high (up to 45%) –
significant driver of sales
culture
Example Santander
– Collective targets (for
example market share in
target customer groups)
– Individual targets
(dependent on specific
employee profile)
– Customer satisfaction/service
(based on
customer surveys every
six months)
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LJUBLJANA
PRAGUE
BELGRAD
TALLINN
RIGA
VILNIUS
WARSAW
BRATISLAVA
BUDAPEST
ZAGREB
ZAGREB
BUCHAREST
SOFIA
C. Potential development of Croatian retail
banking
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32

Growth in retail lending is expected to slow down,
driven more by mortgage than consumer lending
Outstanding retail loans [EUR m]
CAGR
Retail
lending
% GDP
Mortage
Consumer
24,0%
5,787
1,661
4,126
2002
28,5%
7,190
2,202
4,988
2003
Source: CEE Banking Sector Report 2005
20% 17%
31,5%
8,533
2,797
5,736
37,8%
11,022
3,543
7,479
2004 2005E
44,2%
12,895
4,145
8,750
2006E
Comments
Mortgage loans account for only 32%
of retail loans in Croatia, while in the
EU the percentage 80%
Consumer finance boom fueled by
strong demand for durables is
expected to slow down due to
restrictive National Bank measures,
market saturation on certain
segments, slow down in white goods
demand
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Banks have to find the right strategic positioning;
not everyone can be a universal bank!
Competitive banking environment
Product
+
–
Croatia
–
Focus Universal
Banka Sonic
Cost Saver/ Niche Product specialist
= Asset size
Splitska Banka
OTP Bank
Auto Banks
Erste Bank
HAAB
Slavonska
Distribution
PB
ZABA
Raiffeisen
Building societies
Consumer finance
+
+
Product
–
Eurozone/ Global Retail Banking
Focus
Financial
advisors
Self
banking
Brokers
Mortgage
brokers Niche banks
–
= Asset size
Auto
bank
Universal
Universal banks/
financial
supermarket
Private
bank
Mortgage
banks
Niche Product Specialist
+
Distribution
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Branch density is at par with mature CEE banking
markets
Branch density [# per 100.000 inhabitants] 1)
H
PL
RO
CZ
HR
UK
FR
IT
DE
ES
11
12
15
16
18
19
44
Notes: 1) Incl. cooperative banks, 2005
52
Source: National Central Banks; Bankscope
58
99
Comments
Low branch density relative to EU
Plans for additional branches
announced for 2006
High potential to improve branch
density and increase revenue BUT
investment and innovative branch
concepts required
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Alternative distribution channels offer a faster
payback period with a lower investment
Products and distribution channels – Assessment Croatia
Segments/
products
Investment/
Insurance
Mortgage loans
Car loans
Consumer loans
Credit cards
Deposits
Investment level
Size
Low
investments
POS 3rd party/
sales agents
Low
investments
Combinations are difficult Combinations are possible
Mini offices/
sales outlets
Medium
investments
Direct access
Large initial
investments
High competition Low competition
Standard
branches
Large
investments
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Credit cards and mortgages will be increasingly
attractive for retail banks
Market segment attractiveness overview
Growth potential
50%
40%
30%
20%
10%
0%
Growing Attractiveness
Leasing
Deposits
Consumer lending
Non-life insurance
Corporate lending
Credit
Cards
Mutual Funds
Life insurance
Market
concentration
Notes: Bubble size represents size of the business. Size of the cards business not defined.
Market concentration measured by HHI (Herfindhahl – Hirschmann) index from 0 to 1; 0 Represents low market concentration.
Source: BACA, Roland Berger analysis
Mortgage lending
Low Medium High
Comments
Some product groups require
more specialist know how such
as investment products
Credit cards expected to boom
due to co-branded cards, an
increasingly attractive marketing
tool for retailers and banks;
smart cards and premium cards
are promising niche segments
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Levers to grow profitably – cheaper distribution,
product innovation, sales effectiveness
1. Choose the right
strategic positioning
2. Excellent client
segmentation/focus on
target groups
Positioning as a universal bank only if significant market share can be achieved;
otherwise pursue niches
Development of new segments (e.g. low income segment, agribusiness)
Focus on SME client segments
3. Product Innovation Using one product as an anchor, then cross sell
New innovative products (e.g. savings+ mortgage loan)
4. Optimize distribution Use alternative distribution channels via third party agents, mini offices
Customize branch format to target clients and location
Periodically reevaluate branch locations
5. Execution Increase of sales efficiency in integrated multi channel concept
Strengthening of marketing/communication
Increase of sales resources and cross selling leverage of sales channels
Sales focus on performance (Incentives, activity controlling, etc.)
Tight processes; shortening response time
Risk management
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10000 Zagreb
Croatia
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