PA Banking Business Introduction PA Banking Business Introduction
November 2007November 2007
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AgendaAgenda
PA Banking Business Overview
Transition Plan and New Achievements
Vision of PA Banking Business
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AgendaAgenda
PA Banking Business Overview
Transition Plan and New Achievements
Vision of PA Banking Business
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BackgroundBackground
Integrated SZCB and Ping An Bank and renamed toIntegrated SZCB and Ping An Bank and renamed toShenzhen Ping An Bank (SZPAB) in August 2007Shenzhen Ping An Bank (SZPAB) in August 2007
Purchased Fujian Asia Bank Ltd. and renamed toPurchased Fujian Asia Bank Ltd. and renamed toPing An Bank in 2003 Ping An Bank in 2003
Unified banking brand
Successfully acquired Shenzhen Commercial Bank (SZCB) in 2006Successfully acquired Shenzhen Commercial Bank (SZCB) in 2006
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Achievements toAchievements to--datedate
u Professional management team in place
u New matrix based organization structure in place
u Bank merger completed, expanding foot print to 3 cities
u Launched Credit Card
u Launched Wealth Management
u Launched SME business
u Launched Cross-Selling campaign
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Main AchievementsMain Achievements
1. SZCB fully acquired/merged PAB and organization/staff integration is completed
2. The new bank is renamed as SZPAB, with a new brand image established
3. Established Shanghai and Fuzhou branches; realize a business presence across different regions
4. SH and FZ branches start to use uniform banking system and provide full-range banking services. Credit card launched in SH and Jixiang Debit Card launched in FZ
Banking Business Integration CompletedBanking Business Integration Completed
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Credit Card LaunchedCredit Card Launched
n Initial development stage in China
n Increased recognition and use of credit cards
n Gradual establishment of credit bureau system
OpportunitiesOpportunities StrengthStrength
The card with the best services and insurance protection
n Strong Ping An brand name
n Large existing customer base
n Extended distribution channels
WanLiTong CardPing An Card
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Wealth Management LaunchedWealth Management LaunchedØ Launched first Anchor WM center in Yitian branch (April.9th)Ø 5 Anchor WM Centers by end of OctoberØ Flagship Anchor WM Centre opening on Oct 15Ø Launched 8 kinds of WM products
SZPAB Anchor Wealth Management Center
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SME LaunchedSME Launched
Ø Launched SME business and “Yingdongli”
Ø Start with 3 SME pilot centers and 5 pilot sub-branches in Shenzhen
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Cross Selling Campaign LaunchedCross Selling Campaign Launched
ValueValuepropositionproposition
MarketMarketpositioningpositioning
TargetTargetcustomercustomer
n Fully leverage PAG’s resource advantages (customers, brands, management, IT, etc.) for fast expansion of market share, hence substantially improve profitability and market competitiveness
n Specialized and integrated financial services:
u Build one-stop and integrated financial service system
u Build all-around 24-hour service platform
u Build a team of management, operations and sales force with strong innovative and service-oriented mindset, and strong capabilities of management and business development, to fully implement customer-centred operation
n Diversified product: Rely on Group’s product resources to enrich product offering, continue product innovation, and provide diversified and integrated financial products to target customers
n Customer segments of Ping An Group (Life, P&C, pension, trust, security, asset management, etc.)
n Customer segments of Shenzhen Ping An Bank (all customers of Shenzhen Ping An Bank)
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(RMB million)
Net interest income
G&A expenses
Net profit
Net interest spread
Average interest earning assets balance
Average interest bearing liabilities balance
1H 20061H 20061H 20071H 2007
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(9)
1
0.6%
1,170
681
1,488
(900)
1,086
2.4%
118,411
110,507
Ø 1H 2007 operation results recognized some non-recurring items amounting to RMB 409 million, which mainly included gain from non-performing assets disposals and reversals of litigation provision
Significant Profit Contribution to the Group
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Cost-to-income ratio
Loan to deposit ratio
Non-performing loans ratio
Loan loss provisions/non-performing loans ratio
Capital adequacy ratio
1H 20061H 20061H 20071H 2007
46.3%
52.6%
1.1%
66.0%
10.6%
Ø The drop in non-performing loans ratio was mainly due to the disposal of RMB 2.8billion non-performing assets package to Cinda Asset Management Company in the second quarter of 2007
35.5%
72.6%
8.2%
39.1%
4.9%
Note: The 1H2006 ratios are unaudited proforma results as if SZCB and Ping An Bank were merged in the first half of 2006
SZPAB Key Financial Ratios
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AgendaAgenda
PA Banking Business Overview
Transition Plan and New Achievements
Vision of PA Banking Business
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Transition Plan ObjectivesTransition Plan ObjectivesWe have a very detailed two year transition plan which has the following key objectives
n Establish and build a clear market position leveraging inherent advantages
Market Position
n Establish and develop strong innovation culture and create clearindustry leadership in a number of areas
Innovation
n Establish and maintain a strong Operational Risk and Control environment
Operational Risk
n Build and maintain a high quality Portfolio and Portfolio Management processes
Portfolio Quality
n Achieve superior financial performance and increased market shareFinancial Performance
n Maintain capital levels above all regulatory requirementsCapital
n Establish and maintain a world class Corporate Governance culture and infrastructure
Corporate Governance
n Establish a management team that is able to create and operate aworld class infrastructure to very high standards
Management
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RiskManagement
ØCorporate credit risk
ØRetail credit risk,
ØMarket risk
Transition Plan PillarsTransition Plan Pillars
HRManagement
ØOrganization transformationØHR policy and systemØCommunicationØCompensation, benefits, and incentiveØPerformance mgmtØTraining
5 Finance
ØOrganization centralization
ØFinancial management processes
ØMIS system
IT
ØOrganization centralization
ØCore banking system
ØCard system
ØOther applications to support HR/Risk/MIS, etc
Operations
ØStandardization
ØCentralization
ØOperation risk
ØProductivity
ØService Quality
Audit andCompliance
ØOrganization centralization
ØCulture
ØCapability building
6 7 8 9 10
InfrastrInfrastr--uctureucturepillarspillars
BusinessBusinesspillarspillars
Credit CardØPing An card
ØWanLiTong card
Corporate BankingØDepositØCorporate loanØSME loanØBillsØTrade financeØFX productsØInternational business
TreasuryØBalance sheet management
ØCustomer sales
ØProduct innovation
ØTrading
Retail BankingØDeposit
ØConsumer loan
ØInvestment product
ØWealth management
1 2 3 4
Distribution Management ØChannel integration and strategy ØSales distribution
Corporate Governance ØRules and processes ØCommittees
Re-branding ØBrand strategy ØTiming
PAB Integration
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Key Transition Plan AchievementsKey Transition Plan Achievements
nTransition communication programs developedCorporate CulturenPAB mergerMarket Position
nWM/SME/Credit card launchednCash management business roadmap completednSyndicated loan policy implemented
Innovation
nIT remediation well underway nBranch operations diagnostic completednOperation centralization roadmap completed
Operational Risk
nIndependent risk management establishednCredit policy for corporate customers finalized and implementednMarket risk management system and policy established nNew post-loan management system and policy established
Portfolio Quality
n1H budget achievednRemarkable Loan growth achievednCAR maintained at 10%
Financial Strength
nALCO process revised and implementednCompliance department established and key processes establishednMIS infrastructure established (with much more to do)nAll policies within the bank sort out and new policy system of the new bank established
Corporate Governance
nHQ organization change completednManagement team additions completednCorporate/retail segmentation finished
Management
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AgendaAgenda
PA Banking Business Overview
Transition Plan and New Achievements
Vision of PA Banking Business
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Our VisionOur Vision
n Becomes a major contributor to Group growth and profitability by leveraging the Ping An brand, customer base, operational efficiency, culture, talent base and corporate governance
n Delivers market leading integrated financial advice, product and services to consumers; asset based finance and other services to small & medium sized companies; and a full range of banking services to selected large companies
n Is recognized for world-class risk management, control and corporate governance standards
n Is able to attract, retain, train, develop and motivate the strongest talent base in the Chinese banking industry and a company in which employees feel a strong sense of pride
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上海上海ShanghaiShanghai
福州福州FuzhouFuzhou
深圳深圳ShenzhenShenzhen
Nationwide Expansion under One Unified Banking Brand
Thank You!Thank You!
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