best in france project, may 2003 – majeure management international abn amro the group’s...

Best in France Project, May 2003 – Majeure Management International

ABN AMRO

The Group’s development in France

Caroline du RusquecIris KoolhovenAntoine GérardLéonard Wapler


Methodology

Why ABN Amro?

Interviews: We are particularly grateful to: Anne Lise Bapst, VP Communication , ABN Amro France Philippe de Fontenay, Chairman & CEO of Fontenay Gestion,

former CEO of ABN AMRO Securities France

Web-based research


Structure of our presentation

ABN Amro worldwide

The development of ABN Amro in France

Difficulties, successes and challenges

What is next ?


ABN AMRO Worldwide

A leading European bank, with a global presence


ABN Amro worldwide: General overview

An originally Dutch company, stemming from the merger of 2 complementary banks in 1991. ABN: an already international retail bank. Amro: a Dutch investment bank.

Today, around 105 000 employees located in 70 countries. France: 2600 people, 2.4% of manpower. Next acquisitions ? Brazil, Germany


ABN Amro : a major European player

Source: Annual Report 2002

GDP and Profitability evolution

0

5000

10000

15000

20000

1998 1999 2000 2001 2002

24%

25%

26%

27%

28%

29%

30%

31%

32%

33%

Revenue

EBIT %

In m€


ABN Amro worldwide: scope of activities

Source: Annual Report 2002

ABN AMRO Group is mainly a retail bank

98% of the Group’s net profit stems from the retail activity

Its wholesale and private banking activities are Tier-2 activities on a global level


The restructuring: 2000

3 business units: Wholesale, Private Banking, Retail. Rationalizing the back-office.

• Downsizing: 450 people in France (of 2600 employees)

To better control the ROI of each unit Rationalization brand-BU Modernization of management tools. Global outsourcing of IT to EDS

No real geographic strategic organization


Three global Strategic Business Units

Consumer & Commercial Clients (C&CC) for individuals and small- to medium-sized

enterprises requiring day-to-day banking.

approximately 15 million clients, mainly in the three

“home” markets: the US Midwest, the Netherlands

and Brazil.

also expanding in selected countries such as India,

Hungary and Thailand.



Private Clients & Asset Management (PCAM) for individuals and institutional investors.

a leading player in private banking

Private Clients ranks among the world's top 10, with

EUR 96 billion in Assets under Administration.

Asset Management has a local presence in 30

countries and EUR 150 billion in Assets under

Management.



Wholesale Clients (WCS) for major international corporations and institutions.

One of the largest Europe-based wholesale banking

business with around 10,000 clients, 20,000 staff

and operations in over 40 countries.

With a global network, specialists in all major

industry sectors and a broad range of products,

ABN AMRO provides local and global expertise for

complex cross-border deals.


ABN AMRO in France

The development of the bank in France


ABN Amro France: Historical highlights

ABN first entered France in 1975 and established itself in 1977 by taking a majority share in NSM SA. This was part of ABN’s international development strategy.

1980: merger of the Jordaan bank and NSM

1988: acquisition of two listed companies: Massonaud-Fontenay and François Dufour-Kervern, which merge in 1992 to become MFK

1994: acquisition of the OBC bank

1996: establishment of ABN Amro Rothschild JV

1997: two acquisitions; of the Phénix bank and the Demachy bank

1998: MFK changes into ABN Amro Securities France, the Phénix bank merges with NSM

1999: NSM and the Demachy bank merge to become the NSMD bank

2001: joint venture Finaref - ABN Amro bank


ABN Amro in France: Structure

ABN AMRO France

ABN AMRO Group

Banque OBCBanque NSMD

Private Banking Wholesale

Corporate Finance

AA Capital France


ABN Amro in France: General Overview

2600 employees (2.4 % of worldwide manpower), 2.5% of worldwide GDP, about €630m.

3 business units:

Wholesale: Institutional customers and large corporate (3% of

Wholesale worldwide revenues)

'private clients & asset management‘: €20Bn Assets Under

Management (15% to 20% in terms of Private Banking worldwide

revenues)

Retail: Consumer and commercial customers (No significant

presence in France) In terms of breakdown of figures, the structure of the group in France is

just the contrary of the structure worldwide


ABN Amro in France: range of activities

Asset Management NSM Gestion OBC Gestion

Life insurance NSM Vie NSM Pensions

Stock market activities AA Securities France AA Contrepartie France AA Futures France AA Fixed Income France

Investment banking AA Capital France AA Corporate Finance

France Joint-Venture ABN AMRO

Rothschild

Other activities Leasing: Lease Plan IFN Finance


ABN Amro in France: organization

Each business unit has a country representative in France

All branches in France are autonomous, but any strategic decision must be approved by Amsterdam or London

September 2001: New joint venture: Banque Finaref - ABN Amro – savings, stock and life insurance


ABN AMRO in France

Difficulties, successes, and challenges


Strategy Analysis: Why France?

In 1975: no logical strategy in ABN ’s acquisition of NSM SA: ABN was not in the business of Private Banking No synergy between the two entities Hope of doing a profitable investment

In 1988, clear strategy of AMRO: take advantage of the market’s deregulation to internationalize its activities in its core business: Investment banking.


Strategy Analysis: The French exception

During the 90’s, ABN-AMRO rapidly developed in France through different acquisitions.

Strangely, most of the acquisitions were done in the business of Private Banking. This strategy was at the opposite of the group’s world strategy of developing Retail Banking : Banco Real and Sudameris in Brazil, Lasalle in the USA.

Reasons were good opportunities in the Private Banking sector (OBC, Demachy) and impossibility to start from 0 in Retail Banking.


The Human Resources strategy

NSM presents strong local particularities A strong corporate culture A very unionised organisation No real commercial approach towards new clients: “we are the

best and clients come to us”

Banking crisis required a new approach to the business The previous attitude is not sustainable in a market in crisis. Need for transforming the French bank into an international

bank using English as working language and cutting down on staff.


The Relationship Headquarters-Subsidiary

Difficult to build trust despite good relations

By nature, the Dutch adapt themselves very easily in foreign countries. In the French subsidiary, their integration was very discrete and they are appreciated for encouraging initiatives..

Mistrust of the Dutch headquarters towards the independence of some French branches.

The French managers must develop their relations with the group’s top managers in order to gain their trust.


The current strategy in France

Will of the headquarters to apply a strict control on the French operations Headquarters very demanding in terms of budget control and

internal and external auditing.

This is especially true in Wholesale. Private Banking, by nature, stays a little bit out of control.

Use of a few expatriates either to manage operations or to keep an eye on them:

This strategy, for instance, is different from the one applied in the US where no Dutch people are implied.


The restructuring plan in France

Implementation in 2001 of the new organization in

France: 3 main business units

A much better control of the French subsidiaries

Already visible effects: better management of

information, quicker and more efficient reporting

Downsizing: 400 people out of 2600 = 16% of staff

negotiation with unions is hard!


Today’s challenges

Will the restructuring plan be a success in France ?– Fitting the new organization is a challenge: 400 people out of

2600 will have to leave this year…

Will the OBC bank merge with the NSM bank ?– Probably not: OBC’s ROI is one of the largest in the group, it is

a very specific bank with a strong brand in the media business.

Will ABN Amro proceed to any acquisitions in France ?– Nothing planned for the time being, the main objective is to

complete the restructuring plan!


Thank you for your attention !

Q & A ?

best in france project, may 2003 – majeure management international abn amro the group’s...

Documents

global presenceabn amro

germanyabn amro

uil2feuil3abn amro

abn amro francephilippe

methodologywhy abn amro

franceabn amro france

global expertise

global outsourcing