GE Money – Eastern European Growth

GE Money – Eastern European Growth
Dmitri Stockton
President & CEO
GE Money – Central & Eastern Europe
1 / Calhoun
What we do in GE Money...
Retail Lending
Products
Credit
Cards
Mortgage
Personal
Loans
Deposits/
CA
Multiple
Distribution
Broad Range
of Customers
Retailers
Brokers
Auto Dealers
Branches
/ Partner Points
Branches
ATMs
SME
Lending
Telemarketing
Serving over 130 million consumers in 53 countries
GE Money EMEA…breadth & scale
Ireland
UK Norway
Expand in ‘06
Sweden
Belgium
Finland
Denmark
Portugal
Assets ($B)
18%
CAGR
Spain
$83
Poland
Latvia
Italy
$30
France
Russia
Romania
DOMs
2000
2001
2002
2003
2004
2005
2006E
Turkey
Switzerland
Czech
Germany
New in ‘06
Slovakia
Austria Hungary
23 Countries . . . ‘05 Net Income: $1.4B
‘06 NI up 15%+
Eastern Europe... early mover advantage
Poland
Czech
Slovakia
Hungary
Russia
Latvia
Turkey
Romania
‘95/‘98
‘97/‘98
‘00
‘01*
‘04
‘04/‘06
‘05
‘06
Prosperita
RD
Lizing
PAM
Assets
~28%
CAGR
~$12.6B
~45%
CAGR
~$400MM
~3.7%
$90MM
$4.7B
‘02
30+%
delinquencies
NI
‘06E
‘02
~ 3.1%
‘06E
‘02
‘06E
*Initial Stake in 1995
Eastern Europe banking market
Banking Assets
~$1 T
GE Money
share is
~1%
Small GE Money position in a huge market
Eastern Europe Growth Playbook
Positive Market Dynamics
Growth
Markets
‘05 GDP
Growth
Population
(MM)
Retail Loans/
GDP
Poland
3%
38
13%
Czech
5%
10
11%
Hungary
4%
10
15%
Russia
6%
143
4%
Romania
5%
22
5%
Turkey
7%
70
6%
Ukraine
3%
47
5%
Bulgaria
6%
8
12%
10%
2
18%
CEE
~ 5%
~300
~ 10%
Euro Zone
~ 1%
~250
~50%
Latvia
Growth Playbook
• Leverage Early Mover Advantage
– Czech, Poland, Hungary
• Expanding Distribution
• Build-out Product Set
– Mortgage, Cards, Deposits
• Invest in New Markets
– Russia, Turkey, Romania
Fast growing ... unbanked markets
Czech ... creating a growth organization
Entered ‘97/98
... Today ...
Assets
~$3.8B
~17% CAGR
• Full Retail Bank
• 210 Branches
$1.3B
• 490 ATMs
’99
Broadened
Products
Expanded
Reach
’99
2
Channels
’06E
Drove
Efficiencies
’06E
Opex/CV
76%
16
54%
20
Key Partners
40%
70
’99
’02
The Polish experience...
Building Scale...
• Early Market Entry in ’95 ... 1 Product
Assets
• Mortgage Acquisition in 1998
~$3.3B
• Built a Multiproduct Business
~31%
CAGR
• Partnering with Intermediaries …
$0.5B
Agents
Auto Dealers
Retailers
’99
#1
#2
’06E
#2
Building direct model next ... more room to grow
’06E
Expanding distribution ...
’06
’07E
~400
~550
Poland
Czech
Slovakia
Hungary
Russia
Assets ($B)
Branches
1.4 X
~20%
~$15
B2C
ATMs
~650
~850
1.3 X
~500
~900
1.8 X
$12.6
18%
Mobile Sales
$10.7
+
Agents
Dealers
30,000*
4,500*
5,000*
B2B
POS
’05A
’06E
’07*
Investing to continue growth momentum
*2007F
Investing in more NPI …
Card
Sales Fin
Mortgage
Auto
Personal Loan
Deposits
Wealth Mgmt
SME
Insurance
In Place
Hungary
Czech
Poland
Russia
Turkey
In Development
Romania Slovakia Latvia
Opportunity
Driving double digit organic growth rate
Investing in new markets ... Russia
Market
Entered market in December ‘04
• 143MM People
• Small Card & Sales Finance Business
• 6.4% GDP Growth
• Consumer Portfolio ~$50MM
• Wage Increases 10%+ / yr
• Deposit Taking Capability
• Low Personal Income
Tax @13%
Roadmap to expand ... similar to Poland
… Retail lending growth...
Retail
Deposits
($B)
57%
CAGR
Buildout Products/
Distribution
Establish The
Basics
$96
$16
19%
CAGR
$1.7
• Risk Systems
$41
P-Loan
Mortgage
Auto
Branches
• Compliance
’00
Expand Retailer
Relationships
’05
’00
’05
• People
Multiple deals
in pipeline
Targeting $1B+ assets in ‘09
Investing in new markets ... Turkey
#3 Private Turkish Bank
Growth Partnership
(YTL)
61%
• GE Share 25.5% ... Joint Control w/ Dogus
53B
33B
• ~$35B Assets ... $16B Deposits
Assets
79%
548MM
306MM
• ~500 Branches
• #2 in Credit Cards
NI
1H’05
‘‘Award for Excellence – Best Bank in Turkey”
... For the 7th time (Euromoney 2005)
‘‘Best Commercial Bank in Retail Services”
(Global Finance 2005)
‘‘Turkey Best Internet Bank”
... For 5th consecutive year (Global Finance 2005)
1H’06
2-Way Best Practice Sharing
Cards
Six Sigma
Personal Collections
Loans
S2S IT
Mortgage
Insurance
Risk Mgmt.
Investing in new markets ... Romania
… Attractive Market ...
Acquired 3 FinCos ... $220MM Assets
• 22MM Population
#1 Non-Bank Auto Finance
• EU Accession in ’07
#1 Non-Bank Mortgage Platform
• Strong Central Bank
#2 Sales Finance
500 POS
18 Branches
• ~5% GDP in ‘05
Growth Plan
Hungary
Oversight
• Build-out Distribution & Card Platform
Consumer Loan Growth
• Expand Mortgage ... Debt Cons., Home Equity
($B)
• Add Mobile Sales Force & Extend Auto Direct
100%
YoY
$9.6
Assets
($B)
104%
CAGR
$4.8
$1.7
$0.2
Aug ’05
Aug ’06
’06E
’09F
Leverage capability to build in adjacent markets
GE Money Eastern Europe
Growth Playbook
~18%+
~$12.6
• Leverage Early Mover Advantage
– Czech, Poland, Hungary
$10.7
Assets ($B)
40%+
~$400
• Expanding Distribution
• Build-out Product Set
$279
– Mortgage, Cards, Deposits
• Invest in New Markets
NI ($MM)
– Russia, Turkey, Romania
'05
'06E
20060109-3
JRI BOD 04-25-06/42