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Leading Growth in EuropeThe Executive Perspective
Dolf Collee
Member of the Managing Board
Annual Conference of the Foundation for European Leadership
Amsterdam, 23 September 2005
Leading Growth in Europe
1. The Road to Growth
2. Growth in Europe 3. Leading Growth
1
Leading Growth in Europe
ABN AMRO’s Road to Growth - in three phases
Making the organisation transparent
Creating focus
Formulating and realising a growth strategy
2
ABN AMRO’s Road to Growth – Phase I
Making the organisation transparent Before 2000 2000
Strategic Business Units
Client lead
Consumer & Commercial
Clients
Wholesale Clients
Private Clients & Asset Management
Divisions
Geography lead
Netherlands
Investment Banking & Global Clients
International
3
Introductionof
“Managing for Value”
Visible revenue streams and profitability
Allocate capital and (human) resources to activities with highest
(future) returns
ABN AMRO’s Road to Growth – Phase I
Making the organisation transparent
Consumer
“Playing to our strengths”
Mid-marketStrategy
Market lead
Commercial
Mid-MarketClients
Multi-NationalCorporations
TopPrivateClients
Mid-Market /Financial Institutions
Private Clients /Mass Affluent
Mass Retail Small Business
Transparency led to: Better and more open dialogues
– Based on facts
– Organisation and clients leading Better-founded follow-up action Started at the top
Reflected throughout organisationResulted in improved insight
into our performance in - specific client segments
- specific products
- product-market combinations
4
ABN AMRO’s Road to Growth – Phase II
Creating Focus
ABN AMRO created focus supported by Managing for Value
Do activities add value in the short and long term?
– Reorganisations, e.g. “No Detours” in the Netherlands
– Divestments, e.g. WCS: From 10 to 3 BU’s and withdrawal from 10 countries
Are activities focused on our strengths?
– Divestments and investments, e.g. US: Sale of European American Bank and investment in Michigan National.
Are activities part of our core business?
– Divestments, e.g. Sale of Leaseplan, Bank of Asia and Trust
As a result, focus on mid-market segment
of our consumer and commercial clients5
ABN AMRO’s Road to Growth – Phase III
Formulating a growth strategy
Financial ambition Financial target
To be in the top five An average Return on Equity of our self selected peer group of 20% over the period 2005 – 2008. in terms of total return to shareholders at the end of every four-year cycle.
Our ambition and target
The conditions: Client Intimacy and loyalty is key
The value proposition for our mid-market customers:
Professional employees who create a long term partnership through innovative and competitive products and services.
– Innovation example: Private Investor Products
Making more possible
6
Our Growth Strategy
Growth in Europe
7
Growth in Europe
Europe as single market from a banking perspective
Europe: Is the sum of several countries
– Each country has own banking rules, authorities and competitors
– Strong local markets, e.g. co-operatives
Growth in Europe: Is investigating your opportunities in every single country
8
Growth in EuropeSustainable growth opportunities in Europe
based on our growth strategy:
1&2. Grow existing clients and new clients in existing markets
- Is business as usual and limited by country boundaries
Conclusion: Tough competition
9
3. Organic growth
- On average the European markets are too mature for organic growth, but markets like Romania are interesting growth markets
Conclusion: Few opportunities4. Acquisitions
- Depend on life cycle of a country’s banking industry and protection measures Conclusion: Fragmented view
Leading Growth
Sustainable Growth and Values
Our Corporate Values and Business Principles are key in realising sustainable growth
10
Growth in Europe
THE EUROPEAN DREAM
Sustainability & quality of life
“Thick” enough?
Enough drive?
Source: Het Financieele Dagblad
11
Leading Growth
Continual and Cyclical Process with Value Focus
1 Clear Focus…
2 – 4 …
Customer-
Driven Plans…
5 – 6 ...
Turning
Plans Into
Results…
Select Growth
Platforms
Build Deep
Customer
Insight
Remove
Organisational
Growth Barriers
Target Headroom For
Profitable Growth
Aligning Operations
Address
Growth
Priorities
1
2
3
4
5
6
Deliver Growth Strategies
Develop Growth Strategies
ValueFocus
12
Leading Growth
Leading growth through people and leadership
13
Leading Growthin Europe
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