Growth strategies in retail banking Study - Roland Berger

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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 VIE-1789-90000-017-415 18
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 VIE-1789-90000-017-415 19
Page 1 and 2: LJUBLJANA BELGRADE PRAGUE TALLINN R
Page 3 and 4: LJUBLJANA PRAGUE BELGRAD TALLINN RI
Page 5 and 6: Bank privatization is almost comple
Page 7 and 8: A second wave of M&A activities is
Page 9 and 10: Croatia is the leading CEE country
Page 11 and 12: Shrinking margins will force banks
Page 13 and 14: CEE banking markets are selling mar
Page 15 and 16: STRATEGY Most banks offer universal
Page 17: STRATEGY EXAMPLE Lukas bank of Pola
Page 21 and 22: STRATEGY EXAMPLE GE Money exploits
Page 23 and 24: DISTRIBUTION Alternative distributi
Page 25 and 26: DISTRIBUTION 10% of all mortgage lo
Page 27 and 28: DISTRIBUTION PKO BP, the large savi
Page 29 and 30: MARKETING AND SALES EFFECTIVENESS L
Page 31 and 32: MARKETING AND SALES EFFECTIVENESS V
Page 33 and 34: Growth in retail lending is expecte
Page 35 and 36: Branch density is at par with matur
Page 37 and 38: Credit cards and mortgages will be
Page 39: Roland Berger Strategy Consultants

Growth strategies in retail banking Study - Roland Berger

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