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BancAnalyst Association of Boston November 7, 2003 Jack L. Kopnisky President Key Consumer Bank. Michael Orsino National Sales Manager Retail Banking, KeyCorp. PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 FORWARD-LOOKING STATEMENT DISCLOSURE.

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slide1

BancAnalyst

Association of Boston

November 7, 2003

Jack L. Kopnisky

President

Key Consumer Bank

Michael Orsino

National Sales Manager

Retail Banking, KeyCorp

slide2

PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

FORWARD-LOOKING STATEMENT DISCLOSURE

The presentation and discussion, including related questions and answers, and presentation materials, contain forward-looking statements about issues like anticipated fourth quarter and full-year 2003 earnings, anticipated level of net loan charge-offs and nonperforming assets and anticipated improvement in profitability and competitiveness. Forward-looking statements by their nature are subject to assumptions, risks and uncertainties. Actual results could differ materially from those contained in or implied by such forward-looking statements for a variety of factors including: changes in interest rates; continued weakness in the economy, which could materially impact credit quality trends and the ability to generate loans; failure of the capital markets to function consistent with customary levels; delay in or inability to execute strategic initiatives designed to grow revenues and/or manage expenses; consummation of significant business combinations or divestitures; new legal obligations or restrictions or unfavorable resolution of litigation; further disruption in the economy or the general business climate as a result of terrorist activities or military actions; and changes in accounting, tax or regulatory practices or requirements.

slide3

1

Net Income by Line of Business

Net Income - 3Q03

  • Corporate Banking
  • KeyBank Real Estate Capital
  • Key Equipment Finance

Investment Management Services

Corporate & Investment Banking40%

10%

Consumer

Banking50%

  • Retail Banking
  • Small Business
  • Consumer Finance
slide4

2

Consumer Banking

Retail Banking

Small Business

Consumer Finance

Business Scale

900 KeyCenters - 2,200 ATMs

On-line Clients: 722,000 (37% Penetration)

Small Business: 10th largest in loan balances

Business Initiatives

  • Deposit growth
  • Increase cross-sell
  • New client acquisition
    • Adding new KeyCenters and RMs
  • Consumer Finance: reposition and improve cross-sell
  • Business Banking: focus on business development
slide5

3

Consumer Bank Financial Performance

Financial Performance ($ millions)

% Growth

Q3’03 vs. Q3’02

Q3’03

Q2’03

Q3’02

Revenue

Provision for Loan Losses

Expenses (Incl Ovhd)

Net Income

Loans

Deposits

Transaction

MM/Savings

CD’s

580,997

576,864

6.8%

616,102

64,754

70,171

-0.4%

69,857

353,093

336,343

5.4%

354,578

101,969

106,605

12.4%

119,791

28,874

28,243

3.0%

29,100

34,780

33,580

4.2%

34,999

9,902

9,054

14.5%

10,367

10,697

8,949

21.9%

10,913

14,182

15,577

-11.9%

13,719

slide6

4

Progress on Relationship Development

Relationship Development and Client Acquisition

%

Q3’03

Q2’03

Q3’02

Checking Balances ($ in Millions)

Retail Banking

Business Banking

Net New Checking Accounts

Retail Banking

Business Banking

MM/Savings Balances ($ in Millions)

Retail Banking

Business Banking

Home Equity Balances ($ in Millions)

Retail Banking

Net New Clients

Retail Banking

Business Banking

Accounts per Customer

Retail Banking

Business Banking

13%

$6,707

$6,074

$6,871

17.5%

$2,865

$2,652

$3,116

NM

10,071

(9,336)

30,174

57%

(556)

(738)

(469)

21%

$9,531

$8,029

$9,687

33%

$1,160

$916

$1,217

14%

$7,614

$6,956

$7,900

3,480

(16,047)

10,766

NM

26%

1,103

820

1,030

2%

3.03

3.00

3.05

7%

2.84

2.70

2.88

slide7

5

Key’s Relationship Approach

Foundation

Elements

Distinctive

Elements

Future State

Geography

Unique Client

Experience

Client

Knowledge

Segmentation

=

+

Channels

Service

& Advice

Consistent

Shareholder

Return

Products

Multiple

Solutions

Human Capital

slide8

6

Key’s Relationship Approach

Foundation

Elements

Geography

Segmentation

Channels

Products

Human Capital

slide9

7

Key’s Relationship Approach

Geography

Foundation Elements

  • Market Share Objective: Top 4 Market Share Position
  • Retail Infrastructure Investments 2000-2005 - $162 Million
  • Acquisition Strategy

Market Share

  • Measures of Success
    • Market Share Growth
    • Market Earnings Growth
slide10

8

Key’s Relationship Approach

Segmentation

Foundation Elements

  • Profit Tier Segmentation
  • Movement to Life Stage Segmentation

Customers

Profitability/Customers

June

1998

Dec

1999

Dec

2000

Dec

2001

Dec

2002

Sept

2003

June

1998

Dec

1999

Dec

2000

Dec

2001

Dec

2002

Sept

2003

P1

P2

P3

$394

$458

$532

$618

$679

$727

P4

P5

($121)

($104)

($111)

($143)

($133)

($129)

  • Measures of Success
    • Profitability/Client
    • Profitability/Segment
    • Net Client Growth
slide11

9

Key’s Relationship Approach

Channels

Foundation Elements

  • Client Choice of Channel
  • Key Centers / McDonald Offices
  • ATM
  • Call Center
  • Key.com

Client Satisfaction

Current Scale

The scale is 1-10:

1 = Very Dissatisfied

10 = Very Satisfied

  • Measures of Success
    • Productivity
    • Service Levels
    • Client Satisfaction
slide12

10

Key’s Relationship Approach

Products

Foundation Elements

  • Broad Product Solutions for Consumers and Institutions
  • Loan, Deposit, Investments, Fee-Based Services
  • Relationship Pricing and Packaging

48%

Increase

this year

New DDA Account Opening

  • Measures of Success
    • Profitable Balance & Fee Growth
    • Product Economic Value Added (EPA)
slide13

11

Key’s Relationship Approach

Human Capital

Foundation Elements

  • Competency-Based Hiring
  • Significant, Continuous Learning and Training Environment
  • Differentiating for High Performance
  • Meritocracy

Retail Turnover Ratio

-- Financial Objectives

-- Behavior Expectations

-- EPA Driven Rewards

  • Measures of Success
    • Employee Satisfaction
    • Retention/Turnover
    • Diversity
slide14

12

Key’s Relationship Approach

Foundation

Elements

Distinctive

Elements

Geography

Client

Knowledge

Segmentation

+

Channels

Service

& Advice

Products

Multiple

Solutions

Human Capital

slide15

13

Key’s Relationship Approach

Client Knowledge

Distinctive Elements

22%

Increase

During 3rd

Quarter

  • Investments in Enterprise
  • Turn Data to Actionable Information
  • CRM System

Retail Profit Production

3Q’02

3Q’03

  • Measures of Success
    • Sales Productivity
    • Conversion Metrics
slide16

14

Key’s Relationship Approach

Service & Advice

Distinctive Elements

  • Defined Service Behaviors
  • Relentless Consistency
  • Proactive Advice

Annualized Attrition/Acquisition Grows

  • Measures of Success
    • Client Acquisition/Attrition
    • Client Satisfaction
slide17

15

Key’s Relationship Approach

Multiple Solutions

Distinctive Elements

  • Aggressive, Results Oriented
  • Proactively Acquire Major Share of Wallet

Cross Sell Ratio

  • Measures of Success
    • Defined Sales Activities
    • Cross Sell Ratio
    • Share of Wallet
slide18

16

Key’s Relationship Approach

Foundation

Elements

Distinctive

Elements

Future State

Geography

Unique Client

Experience

Client

Knowledge

Segmentation

=

+

Channels

Service

& Advice

Consistent

Shareholder

Return

Products

Multiple

Solutions

Human Capital

slide19

17

Key’s Relationship Approach

Future State

  • Consistent & Distinctive Service Experience
  • Aggressive, Unrelenting Sales Culture
  • Consumer Banking Growth Supporting Consistent Shareholder Returns
  • 3-5% Revenue Growth
  • 10%+ Earnings Growth
  • ROE 21%+
slide20

BancAnalyst

Association of Boston

November 7, 2003

Michael Orsino

National Sales Manager

Retail Banking, KeyCorp

slide21

18

Retain Expand Acquire

  • Relentless Accountability - Daily reports
  • Leaner more efficient structure
    • More one-on-one coaching
  • Retain/Recruit High Performers
slide22

19

KeyCorp Central New York

Results

DDA

Growth

5X

Bank Avg.

Loan

Growth

2.9X

Bank Avg.

12%

Net

Income

Growth

slide23

Question & Answer

Session

Jack L. Kopnisky

President

Key Consumer Bank

Michael Orsino

National Sales Manager

Retail Banking, KeyCorp