Best in France Project, May 2003 – Majeure Management International ABN AMRO The Group’s development in France Caroline du Rusquec Iris Koolhoven Antoine Gérard Léonard Wapler
Jan 03, 2016
Best in France Project, May 2003 – Majeure Management International
ABN AMRO
The Group’s development in France
Caroline du RusquecIris KoolhovenAntoine GérardLéonard Wapler
Best in France Project, May 2003 – Majeure Management International
Methodology
Why ABN Amro?
Interviews: We are particularly grateful to: Anne Lise Bapst, VP Communication , ABN Amro France Philippe de Fontenay, Chairman & CEO of Fontenay Gestion,
former CEO of ABN AMRO Securities France
Web-based research
Best in France Project, May 2003 – Majeure Management International
Structure of our presentation
ABN Amro worldwide
The development of ABN Amro in France
Difficulties, successes and challenges
What is next ?
Best in France Project, May 2003 – Majeure Management International
ABN AMRO Worldwide
A leading European bank, with a global presence
Best in France Project, May 2003 – Majeure Management International
ABN Amro worldwide: General overview
An originally Dutch company, stemming from the merger of 2 complementary banks in 1991. ABN: an already international retail bank. Amro: a Dutch investment bank.
Today, around 105 000 employees located in 70 countries. France: 2600 people, 2.4% of manpower. Next acquisitions ? Brazil, Germany
Best in France Project, May 2003 – Majeure Management International
ABN Amro : a major European player
Source: Annual Report 2002
GDP and Profitability evolution
0
5000
10000
15000
20000
1998 1999 2000 2001 2002
24%
25%
26%
27%
28%
29%
30%
31%
32%
33%
Revenue
EBIT %
In m€
Best in France Project, May 2003 – Majeure Management International
ABN Amro worldwide: scope of activities
Source: Annual Report 2002
ABN AMRO Group is mainly a retail bank
98% of the Group’s net profit stems from the retail activity
Its wholesale and private banking activities are Tier-2 activities on a global level
Best in France Project, May 2003 – Majeure Management International
The restructuring: 2000
3 business units: Wholesale, Private Banking, Retail. Rationalizing the back-office.
• Downsizing: 450 people in France (of 2600 employees)
To better control the ROI of each unit Rationalization brand-BU Modernization of management tools. Global outsourcing of IT to EDS
No real geographic strategic organization
Best in France Project, May 2003 – Majeure Management International
Three global Strategic Business Units
Consumer & Commercial Clients (C&CC) for individuals and small- to medium-sized
enterprises requiring day-to-day banking.
approximately 15 million clients, mainly in the three
“home” markets: the US Midwest, the Netherlands
and Brazil.
also expanding in selected countries such as India,
Hungary and Thailand.
Best in France Project, May 2003 – Majeure Management International
Three global Strategic Business Units
Private Clients & Asset Management (PCAM) for individuals and institutional investors.
a leading player in private banking
Private Clients ranks among the world's top 10, with
EUR 96 billion in Assets under Administration.
Asset Management has a local presence in 30
countries and EUR 150 billion in Assets under
Management.
Best in France Project, May 2003 – Majeure Management International
Three global Strategic Business Units
Wholesale Clients (WCS) for major international corporations and institutions.
One of the largest Europe-based wholesale banking
business with around 10,000 clients, 20,000 staff
and operations in over 40 countries.
With a global network, specialists in all major
industry sectors and a broad range of products,
ABN AMRO provides local and global expertise for
complex cross-border deals.
Best in France Project, May 2003 – Majeure Management International
ABN AMRO in France
The development of the bank in France
Best in France Project, May 2003 – Majeure Management International
ABN Amro France: Historical highlights
ABN first entered France in 1975 and established itself in 1977 by taking a majority share in NSM SA. This was part of ABN’s international development strategy.
1980: merger of the Jordaan bank and NSM
1988: acquisition of two listed companies: Massonaud-Fontenay and François Dufour-Kervern, which merge in 1992 to become MFK
1994: acquisition of the OBC bank
1996: establishment of ABN Amro Rothschild JV
1997: two acquisitions; of the Phénix bank and the Demachy bank
1998: MFK changes into ABN Amro Securities France, the Phénix bank merges with NSM
1999: NSM and the Demachy bank merge to become the NSMD bank
2001: joint venture Finaref - ABN Amro bank
Best in France Project, May 2003 – Majeure Management International
ABN Amro in France: Structure
ABN AMRO France
ABN AMRO Group
Banque OBCBanque NSMD
Private Banking Wholesale
Corporate Finance
AA Capital France
Best in France Project, May 2003 – Majeure Management International
ABN Amro in France: General Overview
2600 employees (2.4 % of worldwide manpower), 2.5% of worldwide GDP, about €630m.
3 business units:
Wholesale: Institutional customers and large corporate (3% of
Wholesale worldwide revenues)
'private clients & asset management‘: €20Bn Assets Under
Management (15% to 20% in terms of Private Banking worldwide
revenues)
Retail: Consumer and commercial customers (No significant
presence in France) In terms of breakdown of figures, the structure of the group in France is
just the contrary of the structure worldwide
Best in France Project, May 2003 – Majeure Management International
ABN Amro in France: range of activities
Asset Management NSM Gestion OBC Gestion
Life insurance NSM Vie NSM Pensions
Stock market activities AA Securities France AA Contrepartie France AA Futures France AA Fixed Income France
Investment banking AA Capital France AA Corporate Finance
France Joint-Venture ABN AMRO
Rothschild
Other activities Leasing: Lease Plan IFN Finance
Best in France Project, May 2003 – Majeure Management International
ABN Amro in France: organization
Each business unit has a country representative in France
All branches in France are autonomous, but any strategic decision must be approved by Amsterdam or London
September 2001: New joint venture: Banque Finaref - ABN Amro – savings, stock and life insurance
Best in France Project, May 2003 – Majeure Management International
ABN AMRO in France
Difficulties, successes, and challenges
Best in France Project, May 2003 – Majeure Management International
Strategy Analysis: Why France?
In 1975: no logical strategy in ABN ’s acquisition of NSM SA: ABN was not in the business of Private Banking No synergy between the two entities Hope of doing a profitable investment
In 1988, clear strategy of AMRO: take advantage of the market’s deregulation to internationalize its activities in its core business: Investment banking.
Best in France Project, May 2003 – Majeure Management International
Strategy Analysis: The French exception
During the 90’s, ABN-AMRO rapidly developed in France through different acquisitions.
Strangely, most of the acquisitions were done in the business of Private Banking. This strategy was at the opposite of the group’s world strategy of developing Retail Banking : Banco Real and Sudameris in Brazil, Lasalle in the USA.
Reasons were good opportunities in the Private Banking sector (OBC, Demachy) and impossibility to start from 0 in Retail Banking.
Best in France Project, May 2003 – Majeure Management International
The Human Resources strategy
NSM presents strong local particularities A strong corporate culture A very unionised organisation No real commercial approach towards new clients: “we are the
best and clients come to us”
Banking crisis required a new approach to the business The previous attitude is not sustainable in a market in crisis. Need for transforming the French bank into an international
bank using English as working language and cutting down on staff.
Best in France Project, May 2003 – Majeure Management International
The Relationship Headquarters-Subsidiary
Difficult to build trust despite good relations
By nature, the Dutch adapt themselves very easily in foreign countries. In the French subsidiary, their integration was very discrete and they are appreciated for encouraging initiatives..
Mistrust of the Dutch headquarters towards the independence of some French branches.
The French managers must develop their relations with the group’s top managers in order to gain their trust.
Best in France Project, May 2003 – Majeure Management International
The current strategy in France
Will of the headquarters to apply a strict control on the French operations Headquarters very demanding in terms of budget control and
internal and external auditing.
This is especially true in Wholesale. Private Banking, by nature, stays a little bit out of control.
Use of a few expatriates either to manage operations or to keep an eye on them:
This strategy, for instance, is different from the one applied in the US where no Dutch people are implied.
Best in France Project, May 2003 – Majeure Management International
The restructuring plan in France
Implementation in 2001 of the new organization in
France: 3 main business units
A much better control of the French subsidiaries
Already visible effects: better management of
information, quicker and more efficient reporting
Downsizing: 400 people out of 2600 = 16% of staff
negotiation with unions is hard!
Best in France Project, May 2003 – Majeure Management International
Today’s challenges
Will the restructuring plan be a success in France ?– Fitting the new organization is a challenge: 400 people out of
2600 will have to leave this year…
Will the OBC bank merge with the NSM bank ?– Probably not: OBC’s ROI is one of the largest in the group, it is
a very specific bank with a strong brand in the media business.
Will ABN Amro proceed to any acquisitions in France ?– Nothing planned for the time being, the main objective is to
complete the restructuring plan!
Best in France Project, May 2003 – Majeure Management International
Thank you for your attention !
Q & A ?