New opportunities of communications in retail banking promotion
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Transcript of New opportunities of communications in retail banking promotion
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New opportunities of communications in retail banking promotion
Deputy CEO, VTB24
Mikhail Kozhokin
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Overview of VTB24
531 branches/outlets Approx. 5000 ATMs Nationwide branch network that is
significantly larger than those of most competitors
Profile
Market Position
Business Lines
Distribution Network
Regions
Clients
Very strong position in all Russia’s regions: 69 regions – 86% coverage
Focus on major cities
Over 7.8M individuals clients with 6.9M active clients
Approx. 200 000 SME clients with 49 500 active
Leading Russian retail bank with full range of banking products and services for individuals and SME
Second largest retail bank in Russia Fifth largest bank in Russia by assets Retail loans market share – 10,6% Retail deposits market share – 6,4%
Loan and deposits for individuals SME lending and services Private Banking Cards Investment products for individuals
Total Asset Growth (in RUB mln)*
712 973
904 011
596 481
319 387
159 045
2006 2007 2008 2009 2010
CAGR = 42%
Net Income Growth (in RUB mln)*
17 514
4 8984 237
937545
2006 2007 2008 2009 2010
CAGR = 100%
*IAS, standalone VTB24. 2010 data preliminary, non-audited
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SET UP
Acquisition of Guta Bank in Russia
Based on Guta Bank, a specialized retail bank, VTB24, was created, focusing on serving and providing loans for retail customers and small businesses as a part of VTB.
Product lines and sales process were set and launched
2004 – 2006 2007 – 2008 2009 – 2011
ACCELERATED EXPANSION
Significant growth of VTB24’s business volumes and market share evidenced by branch network expansion across the country and creating new office forms and bank products sales modules.
Retail customers’ migration from VTB and VTB North-West
The strategic focus is further leading growth with client-oriented and segment-based approach to ensure profitability and high efficiency
ACNOWLEDGED LEADER
The second largest retail bank in Russia
Wide branch network throughout Russia
Developed retail infrastructure, including front office, processing center and internet banking
Significant retail client base Leader in customer service*
VTB24 actively develops its retail business and product line, leading banking service technologies and cross-selling, and steadily grows its share on the retail market.
Retail Banking – History of VTB24
* Awards granted in 2010 presented on next slides
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Business Growth Supported and Customer Loyaltyby Efficiency Improvement
Number of clients Branches and ATMs
Average time of operation Structure of client-flow by time in queue
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- EPSI (Quality assessment to meet European standards) – Annual research «Customer saticfaction’2010» – VTB24 is recognized as absolute leader for customer satisfaction and loyalty
- «The Retail Finance» magazine – 1st place by results of 2010: «The best retail bank», «The best service quality»
- SPEAR’S Russia Wealth Management Awards - in 2010 VTB24 Private Banking is recognized as the best Russian bank, providing private banking services and wealth management
Rising Customer Satisfaction Contribute to Stable Growth
#1 Private Banking
SberbankVTB24 Alfa-Bank Other banks
Industry average
VTB24
Alfa-Bank
Raiffeisen Bank
1st place
3rd
2nd
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Segment-oriented approach and the Internet
VTB24 implemented a segment-oriented approach in client attraction. Key target segments are High/Ultra High Net-Worth’s, mass affluent and the upper mass segment.
The upper mass segment is characterized by high level of activity in the Internet, especially in social networks: 52% of the respondents access the Internet every day, 81% - no less than once a week. In comparison national average is 40% and 61% respectively.
The marketing policy of VTB24 rests on following features:
Internet Advertising (high share in the advertising budget, emphasis on contextual advertising)
General creative concept (celebrities)
Presence in social networks
Family Income, per person, per month, $ Family Income, per person, per month, $
39%
60%
72%
92%85%
300-500 501-800 801-1600 1601-2500 >2500
The share of the Internet users in different income groups The share of Internet in the sources of information about the bank
32%
19%16%
10%
22%19%
10% 11%
300-500 501-800 801-1600 1601-2500
search for information on the Internet
users' advice on the Internet
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Internet audience in Russia
Dynamics of Internet Usage in Russia
3,1
29,4
38,0 45,3 59,7
42,8%
32,3%
27,0%
20,8%
2,1%
0
10
20
30
40
50
60
70
2000 2007 2008 2009 2010
mln
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0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Users (left scale) % of Population (right scale)
The number of the Internet users in the Russian Federation increased by 31,8% in 2010 and amounted to 59,7 million people. It’s about 42,8% of the total population of the country.
Source: Internet World Stats
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Internet Advertising in Russia
Except for the post-crisis 2009, the growth rate of internet advertising in Russia in 2006-2010 didn’t descend below 40%. In 2010 the internet advertising market capacity in Russia according to MindShare Interaction amounted to 21,9 billion rubles.
The Internet is the only segment of the advertising market that has been continuously increasing even during the crisis in 2008-09 years.
Internet Advertising in Russia
5,1
9,5
14,715,6
21,9
97%
55%
40%
6%
87%
0
5
10
15
20
25
2006 2007 2008 2009 2001
mln
0%
20%
40%
60%
80%
100%
120%
advertising expenses (left scale) growth, % (right scale)
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Website Attendance Dynamics – www.vtb24.ru
Monthly site reach, mln. visitors
0
1
2
3
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6
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Moscow St. Peterburg VTB24 Ekaterinburg
The amount of website visitors is continuously rising with a 25% increase in 2010. For 4 years in a row (2007-2010) the VTB24 site attendance has grown by 7.5 times.
About 50% of visitors are interested in cash loans and credit cards.
VTB24 site reach is less than the amount of Internet users in Moscow or St. Petersburg, but exceeds that of Ekaterinburg and the other Russian cities.
0
2 000 000
4 000 000
6 000 000
8 000 000
10 000 000
12 000 000
14 000 000
16 000 000
18 000 000
2006 2007 2008 2009 2010
Website visitors
Mortgages19%
Microcredit1%
Cash loans38%
Credit cards11%
Savings19%
Auto Lending12%
The product structure of site attendance in 2010
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VTB24 Expands Its Communications Via the Internet
Internet Advertising costs increased by 80% in 2010.
The share of Internet Advertising coats in the advertising budget is rising from year to year. In 2010 it reached 26,1%.
Website is a Generator of Sales
The amount of cash loans applications via www.vtb24.ru increased by 28% in 2010, which is three times more than in 2009 (9%).
3,4
2,4
4,3
2008 2009 2010
Internet Advertising Costs, $mln
0%
20%
40%
60%
80%
100%
2008 2009 2010
Internet TV Radio Press Outdoor Metro Collateral m aterials
The Structure of Advertising Costs
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The Effectiveness of Internet Advertising Increases:The Example of Cash Loans
With the increase of Internet advertising costs by 80% in 2010 the conversion ratio of the number of VTB24 site visitors into the number of internet applications for cash loans decreased by 21%. So the effectiveness of Internet advertising has risen.
3,4
2,4
4,3
7,47,9
6,3
2008 2009 2010
Internet advertising costs conversion ratio
-21%
Internet Advertising Costs and Conversion Ratio (Number of Visitors-Number of Applications)
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VTB24 in Social Networks
VTB24 is represented in Facebook, Twitter, on Banki.ru (leading Russian site
on banking), LiveJournal and Blogspot.
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VTB24 Internet Banking
In 2009-2010 the number of internet banking clients of VTB24 has grown by 4,6 times. At present every eighth client of VTB24 uses internet banking.
Number of clients VTB24 internet banking
52.2103
211
505
974
4.5%4.6%
5.2%
7.8%
12.5%
0
200
400
600
800
1000
1200
01.01.2007 01.01.2008 01.01.2009 01.01.2010 01.01.2011
tho
usa
nd
s o
f p
eop
le
0%
2%
4%
6%
8%
10%
12%
14%
number of VTB24 internet banking users share of VTB24 cliens, % (right scale)
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Specifics of Russian financial internet development
Banking technologies development can’t catch up with the Internet technologies
Russians don’t have enough trust in the Internet for financial transactions.
In general in Russia the Internet is yet a communication environment and information search engine, rather than a tool for business matters and for solving personal financial questions.
The core of financial internet audience are young successful professionals, a new and attractive generation of clients
This is yet narrow but fast growing segment with a high potential for both financial internet and client base of retail banks development
They would open new opportunities for the banking sector