Bank Citadelecommunication campaign of restructuring and launch of the new brand

Kaspars CikmačsBoard Member and COO, bank Citadele

19 May 2011

Agenda

Anatomy of Parex banka’s liquidity crunchCommunication goals and tasksBrand developmentDecision to establish bank CitadeleLaunch of the new BrandClient communicationTransfer processResultsCommunication team

Parex

Past

Autors: Gatis Šļūka, 2009

Anatomy of Parex banka’s liquidity crunch

LPA enlarges share capital by LVL 140 million and issues a subordinated loan of LVL 50 million

EC approves enlargement of share capital, improving bank’s capital adequacy to 11%

Bank’s administration moves to the new headquarters

14.09.2009.

Government takes over the bank;

New Board elected

Bank’s syndicated loans are restructured

The EBRD becomes shareholder of the bank

03.09.2009.11.05.2009. 22.05.2009.23.03.2009.05.12.2008.11.11.2008. 25.11.2008. 01.12.2008.

Parex banka turns to the Latvian State for financial support

EC approves takeover of Parex banka

FCMC imposes restrictions on Parex banka

the global liquidity crunch Latvia turns to the international lenders

Latvia receives international financial supportState budget for 2009/2010 has been approved, foreseeing major reductions in expenses

10.2009.

Brand development results and decision to remove the crown

Communication goals

To preserve existing client base, increase their loyalty and to motivate clients to stay with the New Bank after the crisis, taking into account extensive competition in the market.

To motivate the Bank’s employees to attain better business results and achieve impressive reduction in expenses by 40%,

To change internal environment by increasing internal communication activities,

To manage the Bank’s reputation,

To inform all target audiences about the restructure process.

Target audiences:

Clients, potential clients, employees, shareholders and investors, Eurobond owners and holders of other financial instruments, syndicated lenders and financial institutions, opinion leaders and brand specialists in Latvia, media and general public.

New bank – new strategy

Brand development

To Stabilise

To Sustain To GrowObjectives for the new brand:1. Attract new deposits2. Restore credibility3. Build value in the new bank

We started at homeBy understanding what’s special about Parex…… and what should belong to the history.

Involving: Council, Board, Management, Managers and customer service

A path for the brand’s journeyInspiring and enabling individuals and businessesto develop economically and therefore improvesociety in Latvia and the Baltic region.=Inspiring and enabling individual enterprise

Drop Crown + FontExcessiveConnection to the pastCreates distance/exclusivity

Keep RedBold, visible, standoutIt’s largely unused bycompetitorsIt makes the transition morecost effective

Establishment of bank Citadele

FCMC decides to issue a banking licence for Citadele

Payment for initial capital of the bank Citadele (LVL 4 milion)

Increase of Citadele share capital by LVL 99 million

The EBRD buys from LPA 25% + 1 share of bank Citadele and sells to LPA 11,8 million Parex banka’s shares

LPA takes over from the EBRD subordinated loan for Citadele of EUR 11,2 million

28.06.2010. 28.07.2010.22.06.2010. 02.08.2010.30.07.2010.

Transfer of Parex banka’s assets and liabilities (business transfer) to bank Citadele

01.08.2010.

23.03.2010.

Cabinet of Ministers approves Bank’s restructuring model

01.06.2010.

Cabinet of Ministers decides to establish bank Citadele

Issues to solve:SWIFT, communication with clients and collaboration partners, approvals from more than 1000 organizations to receive

Communication issues:

Launch of the Brand and client communication campaign about the transfer in order to create a more positive background for new Bank's operations

Communication challenge:

FCMC issued a release with the name of the new Bank before the launch event

Launch of the New Brand• Series of events to launch the bank’s brand - one month before the split up, marking out

a virtual boundary between the old and the new bank:• Event to provide visual materials for media use up to the launch of the new bank’s

operations;• Offering an opportunity to present professional evaluations of the new brand, also

preventing the risk of the new brand being leaked;

Aim:

• Jaunabanka.lv portal, afterwards integrated into Citadele.lv.• Special PR events for limited audience and media

• Wolff Olins company representative ‘s lecture;• Addresses by CEO and government representatives;• Video greetings from prominent individuals, including the prime minister of Latvia;• Photo opportunity for media

Communication channels:

• Special greeting to all employees of the Bank (Greeting card and a small sticker with Brand) Announcement prior the event, Letter from the CEO and a badge with logo as direct mail to all employees, Announcement after the Event, Photo gallery and videos from the launch event in intranet

Internal Communication:

• Bank’s marketing and communication team, Leo Burnett Latvia, Komunikāciju Aģentūra/Edelman Affiliate Team:

Information• Through the Bank’s channels (websites in

13 languages and countries) • Development of new communication

channels (www.jaunabanka.lv)• Direct mailings to clients and collaboration

partners, clients of resolution bank (Parex banka)

• Extensive internal communications campaign

• And indirectly through media relations activities

• Media campaign (interviews, comments and opinions, interviews, media kits to regional media etc., supported by the advertising campaign closer to the split date)

Direct Communication• Client Contact Centre• Client Managers (Q&A)

EventsNew brand reveal event for defined 200 guests and photo opportunity for news media,• Events for media(Press

conference with Parex banka and bank Citadele management after the split),

• Events for clients (top corporate client conference, event for top private banking clients from the CIS, meeting with the new management, marking of first 150 customers of bank Citadele on the day of opening),

• Internal forums and manager meetings.

Client communication

Client communicationPrior to Split

• Letter to TOP 20 000 retail, corporate and wealth management clients

• Letter to 3000 merchandisers

• Announcement in internetbank

• Announcement in mass media

• Q&A to client managers

• Communication guidelines to client managers

Around Split day

• Information in branches and Client customer centres

• Information in web pages • Parex.lv• Jaunabanka.lv• Citadele.lv

• Annoucments in internetbank

• Letter about the actual split to the clients in the CIS

• Interviews and articles in press in Russia and the CIS

• Direct communication with clients using RUR payments

External Communication • 2nd “Dress rehearsal” and its results• Shareholder meeting• Information kits to regional media• Advertorials where necessary• Information in the bank’s web channels

Prior to Split date

• Media event• Introduction of Management of bank Citadele and Parex

banka• Press release• Fact sheets and press releases

Split date

• Information of transfer on Non Latvia jurisdictions• Interviews and comments to Latvian media• International media activities (interviews and comments

where possible)• Information on values, mission, vision and business goals of

bank Citadele

After the split date

Internal Communciations

• 2nd “Dress rehearsal” and its results• Shareholder meeting• Management of bank Citadele and Resolution bank• Communication transcripts for customer service managers• New business cards, e-mail signatures

Prior to Split date

• Management Forum• Information to client managers of Branches and customer service

centres – actually working on 1 August• Communication transcripts to customer service managers

Split date

• Information of transfer on Non Latvia jurisdictions• Information on Exterior and Interior Sign Change in LatviaAfter the split date

Communication for Resolution BankPrior to Split

• Management Forum

• Q&A to client managers

• Communication guidelines to client managers

Around the Split date

• Letters to 3000 clients of Parex banka

• Information on the Management of the Resolution bank

• Announcement in the first page of parex/citadele.lv websites

Technical split in LatviaData migration in information systems took 25 hours (31.07 14:00 – 1.08 15:00).

ATMs, internet bank, payment cards were working without interruptions.

Citadele web pages in 13 countries and internet bank were launched at 0:00 on 1 August.

All client current accounts were moved from Parex banka to Citadele. Any further transactions with Parex banka are carried through accounts in Citadele.

Client reaction after the splitDeposit volumes have increased during the first week of Citadele operations and the positive trend has remained.

Number of internet bank visitors during split:

At night until 6:00 – 289 visitors,

Total on 1 August – 37% more than on average Sunday.

Call centre received 30% more calls than usual.

Number of internet bank and payment card transactions without significant changes.

ResultsThe public was well informed about the restructuring of Parex banka and establishment of bank Citadele:

affirmed by the results of opinion poll, showing that 88% of Latvia’s inhabitants have heard about establishment of bank Citadele and its brand. Especially good results were achieved in the groups with higher income;

Publicity results:In July and August 2010 the 12 spokespersons of both bank Citadele and Parex banka were among top 20 in the Latvian media.Although in June 2010 Parex banka had the greatest number of publicity (1194), it had the largest amount of negative publications (91). In July and August 2010 share of voice peaked both for Parex banka (35 and 33%) and bank Citadele (17% and 16%). In August both banks had the highest publicity efficiency index – 38.37% and 38.24% respectively. The positive and neutral publicity reached 98% and only 2% of publications were fairly negative.

An increase in the Bank’s business was observed, including increase in corporate deposits, stabilisation of the client base.

the Bank repaid EUR 17.3 million deposit to the Ministry of Finance prior to the set deadline as the Bank has succeeded to grow its deposit base by another LVL 48 million in August 2010; thus, the Bank’s liquidity indicators substantially exceed the requirements;Clients were well informed about the split process and received the split calmly as direct communication with the most crucial target audiences was ensured.

Virs 801Ls

600Ls-800Ls

400Ls-600Ls

251Ls-400Ls

151Ls-250Ls

Līdz 150Ls

Nav at-

bildes

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

100%98%97%

94%76%79%

88%

0%2%3%

4%18%14%

8%

0%0%0%

2%5%7%5%

Ir dzirdējis Nav dzirdējis Grūti teikt

Augusts Septembris0

100

200

300

400

500

2 211 2

448406

45102

2755

Citadele's publicity by typeAugust - October 2010

Negative Alm. Negative Neutral Alm.Positive Positive

Am

ount

of p

ublic

itatio

ns/p

lots

Have you heard about bank Citadele?

No answerLess than 150 Ls

151-250 Ls251-400 Ls401-600 Ls601-800 Ls

Above 801 Ls

Haven’t heardHave heard Hard to say

August September

Communication teamPR agency: Komunikāciju Aģentūra/Edelman AffiliateBrand developers and implementers: Wolff Olins (UK) and Leo Burnett (Latvia)Banks Communication team: Maija Celmiņa, Raimonds Bricis, Indra Zinkeviča, Arita Featherstone, Mārtiņš Panke, Inga SalenieceManagement team: Nils Melngailis, Guntis Beļavskis, Valters Ābele, Vladimirs Ivanovs, Kaspars Cikmačs, Tīna Kukka, Daniel Frumkin

Thank you!Video “Ekspertu vēlējumi Citadele”