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Citibank Consumer Banking Strategy Press Conference Prague, Novem b er 4, 2004 Citibank strategy Citibank and SME segment New commercial offer for SME segment Rajeev Chalisgaonkar, Retail Banking Head Ladislav Kročák, Head of CitiBusiness Sales

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Citibank Consumer Banking Strategy

Press Conference

Prague, November 4, 2004

agenda for today
Citibank strategy

Citibank and SME segment

New commercial offer for SME segment

Rajeev Chalisgaonkar, Retail Banking Head

Ladislav Kročák, Head of CitiBusiness Sales

Ladislav Kročák, Head of CitiBusiness Sales

Agenda for today
consumer bank history
Consumer Bank History
  • 1999*CitiBusiness -we started to finance and service small and medium sized companies
  • 2001Citibank launched personal banking including:
  • Deposit and payment products
  • Credit Cards
  • Personal Installment loans
  • Citibank Online Internet banking
  • 2003We launched CitigGold, a range of services for affluent clients

*Citibank’s corporate banking business has been present in Czech Republic since 1991

2004 position
2004 position
  • Our core business lines are:
  • CitiGold Wealth Management
    • We became an established market player in the affluent segment with unique range of deposit and investment product and financial planning tools
  • CitiBusiness
    • We have built a strong position in the SME segment, based on innovative credit products, and relationship based approach
  • Credit cards
    • We are the third largest local issuer with top rated products in terms of security, additional features and the length of interest free period
  • Consumer loans
    • We provide to our customers largest unsecured personal loans without guarantors or any other additional security for bank
2005 strategy

Wealth Management and CitiBusiness

      • 4 new branches to be opened in Prague, Liberec and Olomouc
      • Focus on providing value added advisory services and product innovations

Credit Cards

      • Expand sales network & introduce new sales channels
      • Even stronger focus on product development and security (Photo sign & extended fraud coverage)
  • Personal Instalment Loans
      • Expand distribution channels
      • Lending against investments in mutual funds or deposits
future vision
Future Vision
  • Leading Player in the market in Credit Cards
  • Leading Player in the market in Wealth Management
  • Key Player in SME segment - CitiBusiness
  • Key Player in Consumer Loans
focus on wealth management
Focus on Wealth Management
  • Superior service standards
  • Trained and internationally certified CitiGold personal bankers and investment consultants
  • Dedicated service areas for CitiGold clientele in branches
  • Global standard CitiPhone banking - dedicated CitiGold phone lines 24x7
  • Unique investment planning tools –> CitiGold Wealth Planner
  • Distribution of investment products of top rated providers
      • 20% of our client’s total savings in Citibank is in mutual funds and structured notes, compared to country average of 9%
      • More than 180 investment mutual funds and unique deposit products: market linked and premium deposits, CitiOne saving account
  • Free of charge banking services for customers that keep min. CZK 200 000 of their savings with the bank
focus on direct banking
Focus on direct banking
  • 94% of all transactions are initiated via internet, minimum goes through branches
  • 40% customers use both Citibank debit and credit cards
  • Most of our customers visited branch only once, some of our customers never visited our branches (everything was agreed on-line or during a personal visit of their banker)
  • All products including current account can be opened based on internet application
focus on credit cards
Focuson credit cards
  • Aggressively expand and diversify the Sales network to attain market leadership in cards
  • Recruit the best Sales Force talent in the country.
  • We already have the strongest product offering in the cards market.
    • Most secure card in the market!
      • Zero liability (free feature) for all reported lost/stolen cards
      • Unique Photo Sign feature - over 70% of our customers use it.
      • State-of- the-art anti-fraud management systems
    • Up to 55 days interest free period – Unique in the market!
    • 5% minimum payment facility – Best in the market!
    • Citibank individualni program splatek – Unique value proposition to manage ever better flexibility.
    • Unique promotional pricing to reward the customer based on usage.
  • Further innovations and development of new product features to continue our strong value proposition and image.
focus on personal loans
Focus on personal loans
  • Expansion of target market and refocusing on smaller loans below 80.000 Kc – today’s average installment loan is 120 000 CZK
  • 150% growth in number of consumer loans in 2005
  • Product innovations
    • secured overdraft - lending against investments in mutual funds or deposits
    • home equity loans - “American” mortgage
  • Expansion of distribution channels
    • Direct sales channels
    • Remote sales channels – phone selling
    • Dedicated loan specialists in branches
citibank and sme segment

Citibank and SME segment

Ladislav Kročák, CitiBusiness Head


Looking back…….We launched an SME Bank in 1999

Original research findings about Czech SMEs in 1999

The SME Bank Model


  • They will adopt new technology as long as it brings real benefits to them
  • They are professional businessmen and not banking experts – our products must add value to their business and be simple to use
  • Czech SMEs need capital to invest as much as to smoothly run current operations
  • Speed and predictability of credit approval process is key - their success is about long term strategy as much as being able to take up tactical opportunities.

Service & DistributionModel

New credit process

New Product Set

New dedicated service & distribution channels based on active direct banking principles

Internet Banking for SMEs + Special Business Debit Card

Relationship managers - mobile bankers

Phone based day-to-day service support

100% of CitiBusiness clients use internet banking

99.7% of all transactions are done on-line including cross border and loan transactions (many customers started to use internet because of CitiBusiness).

Over 70% of customers don’t need to use our branch at all in a year

High customer satisfaction rates - over 90%

Service & Distribution Model

Citibank´s SME clients belong to most active customers, they use Internet Banking extensively

Implemented program-based lending driven by customer needs– approval based on simplified documentation

‘pre-grading’ and indicative offers (free of charge) within 24 hours based on basic financials

Provide advisory to the customer to ensure we match needs by product solutions

We do not charge any commitment fee (zavazkovou provizi)

Our lending to SMEs has grown 57% in 2004

Simple loans are typically approved within 48 hours

PortfolioPerformance is very good despite largely unsecured portfolio

New credit process

Strong growth in SME lending

First to launch a simple unsecured Working Capital Loan up to CZK 1.3MM

Launched a pre-approved ‘Loyalty Overdraft’

A complete suit of loan products - building blocks for Individual Financing Solutions

Cross-border banking tools leveraging Citibank’s global reach and capabilities

Pricing programs for different business profiles

Almost 50% of our active customers are using financing products

69% take-up rate for Loyalty Overdraft – a pre-approved financing offer (bank does the paperwork - Client ‘approves’ the loan by signing a loan agreement.)

CitiBusiness also attracts exporting or importing customers that value reliable cross border services

New Product Set

A business built around the needs of SMEs


2005 StrategyContinue and expand our commitment to the Czech SME sector

  • Increase loans to the SME segment by over 50% in 2005
  • Come closer to the market - open dedicated CitiBusiness Branches – starting with Liberec and Olomouc in first half of 2005
  • Facilitate access to EU funded programs by providing special bridge loans (‘Eurocredit’) and other assistance including advisory
  • Continue to enhance active direct banking model – new version of CitiBusiness Direct to be launched in 1st quarter 2005.
  • Continue to support SMEs ‘beyond banking’ – sponsor SME education (seminars with AMSP and CzechInvest)

Special CitiBusiness Offer

  • We invite new customers to experience CitiBusiness through trial periods for business banking services.
  • A) For new customers that will open CitiBusiness account:
      • Banking services in the value of CZK 15.000

5-10 months free CitiBusiness account – depending on pricing program selected

  • ‘Free CitiBusiness Account’ includes:
        • Internet banking
        • account maintenance for unlimited number of accounts
        • Domestic payments incoming and outgoing
        • Up to 2 international payment cards
        • Up to 25 ATM withdrawals a month
        • Incoming cross-border payments
  • B) For customers that will choose & use any of our credit products we offer:
      • No loan approval fee(saving costs up to CZK 15000)+ free Citibusiness account for 1 year
  • Offer is valid till January 31st, 2005