Transaction Banking A Global Product Business

Ann CairnsCEO Transaction Banking

ABN AMRO Investor DayDuin and Kruidberg, 14 December 2005

2Unlocking the Intrinsic Potential of the Group

Agenda

What is Transaction Banking at ABN AMRO?

How are we organised?

Delivering strong results

A strategy for growth

Measuring progress

In summary

What is Transaction Banking at ABN AMRO?

4Unlocking the Intrinsic Potential of the Group

Transaction Banking gives the ABN AMRO Group a key competitive advantage

ScaleBillions of transactions in multiple currencies, operating from 59 countries – 3rd largest networked bank

High qualityearnings

Predictable recurring operating income in excess of EUR 4 billion in 2005

Innovation

Enterprise-wide approach

Product breadth, with 200 plus local, regional and global products

Industry awards for best in market solutions

5Unlocking the Intrinsic Potential of the Group

Transaction Banking at ABN AMRO

Transaction Banking

Cash Management Trade Cards

Core product lines

6Unlocking the Intrinsic Potential of the Group

Transaction Banking at ABN AMRO

Transaction BankingBusiness

Cash Management Trade Cards

Core product lines

International Supply ChainPartner Banks

Treasury Payables ReceivablesWorking Capital

Solutions(examples)

S. America N. America Netherlands Europe AsiaRegions

7Unlocking the Intrinsic Potential of the Group

Examples of client solutions

Transaction BankingBusiness

Cash Management Trade Cards

Core product lines

International Supply ChainPartner Banks

Treasury Payables ReceivablesWorking Capital

Solutions(examples)

S. America N. America Netherlands Europe AsiaRegions

8Unlocking the Intrinsic Potential of the Group

Examples of products for our different client segments

Consumer Clients Private Clients Commercial

clients Global Clients Financial Institutions

Payments

Point-of-sale Cash/Credit

Credit Cards

Money Transfer

Money Market Deposit Account

Payments

Collections

Liquidity Management

Account Service

Supply Chain Financing

Trade Finance

Trade-related Guarantees

Payments

Point-of-sale Cash/Credit

Credit Cards

Money Transfer

Payments

Collections

Liquidity Management

Treasury Service

Account Service

Supply Chain Financing

Trade Finance

Trade-related Guarantees

FI Outsourcing

CLS

Trade Finance

Corporate Account Service

Clearing

Trade-related Guarantees

Correspondent Bank Business

How is Transaction Banking organised at ABN AMRO?

10Unlocking the Intrinsic Potential of the Group

A group-wide model

Transaction Banking established as a global product organisation at beginning of 2005

The enterprise-wide approach provided:

Necessary scale to compete effectively as Top 5 provider

Ability to drive innovation by transferring product capabilities across client segments and regions

Mechanisms to leverage our extensive global network

Global Markets

Europe North America

Latin America

Asia PC Global Clients

NL

Asset Management

Group Functions

Services

Transaction Banking

Consumer Client Segment

Commercial Client Segment

Local Products

Local Products

Local Products

Local Products

Local Products

Local Products

M&A ECM

Our enterprise-wide approach is cutting-edge in an industry where most banks still operate localised transactions banking centres

11Unlocking the Intrinsic Potential of the Group

Transaction Banking organisation

Established 1st January 2005

EuropeDaniel Cotti

AsiaPeter Chow

LATAM(ex Brazil)Claudio Migliore

NetherlandsMaarten Mol

North AmericaCindy Murray

BrazilSergio

Costantini

Client Service - Ian Holden-Semple

Global Transaction Delivery - Edward Glassman

CIO Transaction Banking – Robert Langefeld

Head GSS Operations, Transaction Banking – Rob De Ridder

Byron HaynesCOO Functions

Mark TowsonHuman Resources

CEO Transaction BankingAnn Cairns

ABN AMRO Transaction Banking is delivering strong results

13Unlocking the Intrinsic Potential of the Group

The enterprise-wide approach is delivering strong results

Major improvement across entire business:

Strong organic growth in Brazil and North America

Operating Result driven by both consumer and commercial businesses

Significant Growth versus YTD 2004

12%

46%

0%

20%

40%

60%

Operating Income Operating Result

% G

row

th

14Unlocking the Intrinsic Potential of the Group

Low capital use in Transaction Banking

Efficient use of capital because of low risk weighting

Overall Return on Equity is 18%, we expect this to rise into the 20’s in the next two years

– example; trade financing can use 1/10th of the capital required for an unsecured loan

However room for further improvement as capital usage varies considerably by segment and country

15Unlocking the Intrinsic Potential of the Group

A leading Transaction Bank

No. 2 Cash Manager in Western Europe and Central and Eastern Europe

Cash Management Poll

October 2005

Best Bank forCross-border Pooling and Netting Western Europe

April 2004 and March 2005

Best Trade Finance BankEurope

June 2002, February 2003, 2004 and 2005

Best Online TradeFinance Bank

Award for Excellence

June 2003,2004 & 2005

Best Bank for Liquidity/WorkingCapital ManagementEurope

January 2005

Best Online Cash Management Bank Europe

January 2005

Best Online Trade Finance Website

January 2005

Winner, Risk Management

Technology Awards 2005

June 2005

Best Electronic Services in Trade Finance

Euromoney Technology Awards

March 2004 & 2005

Best Trade Platform/Best online Trade Provider

July 2005

Best Providers of CLS offering for FIs

Cash Management Poll 2005

September 2005

Excellence in OutsourcingABN AMRO and KeyCorp

May 2005

No. 1 Customer Satisfaction Eastern Europe

Cash Management Poll

October 2005

Best at Cash Management Western Europe

Awards for Excellence

July 2004 and 2005

Cash Pro WebNo. 1 Internet Application for Cash Management Services

November 2005

An extensive network:

Including large and successful local businesses in Europe, the US and Brazil

Enables us to compete as one of the Top 5banks in Transaction Banking

In some cases we achieve number 1 position

16Unlocking the Intrinsic Potential of the Group

Client and industry recognition

No. 2 Cash Manager in Western Europe and Central and Eastern Europe

Cash Management Poll

October 2005

Best Bank forCross-border Pooling and Netting Western Europe

April 2004 and March 2005

Best Trade Finance BankEurope

June 2002, February 2003, 2004 and 2005

Best Online TradeFinance Bank

Award for Excellence

June 2003,2004 & 2005

Best Bank for Liquidity/WorkingCapital ManagementEurope

January 2005

Best Online Cash Management Bank Europe

January 2005

Best Online Trade Finance Website

January 2005

Winner, Risk Management

Technology Awards 2005

June 2005

Best Electronic Services in Trade Finance

Euromoney Technology Awards

March 2004 & 2005

Best Trade Platform/Best online Trade Provider

July 2005

Best Providers of CLS offering for FIs

Cash Management Poll 2005

September 2005

Excellence in OutsourcingABN AMRO and KeyCorp

May 2005

No. 1 Customer Satisfaction Eastern Europe

Cash Management Poll

October 2005

Best at Cash Management Western Europe

Awards for Excellence

July 2004 and 2005

Cash Pro WebNo. 1 Internet Application for Cash Management Services

November 2005

A strategy for growth

18Unlocking the Intrinsic Potential of the Group

Strategy for growth

Transaction Banking

Organisational structure

Roa

dmap

Rat

iona

lisat

ion

Rev

enue

Gro

wth

Res

ourc

ing

Res

ilien

ce

Foundations

Pillars

Performance Contract & KPIsInvestment Budget

Alignment across SBUs

19Unlocking the Intrinsic Potential of the Group

Industry trends support our revenue strategies

Concentration of banking relationships

– clients are reducing banking relationships and concentrating with major providers

Globalization

– commercial clients are seeking new markets and sourcing from new suppliers

Supply chain management

– Companies are linking their logistics and financial supply chains. We have market leading technology in this space.

Remodelling of the banking market

– many banks are considering outsourcing their payments and trade

– Successful partnerships include Barclays (UK), Keycorp (US), Groupe CaisseD’Epargne (FR), Suncorp (AU)

20Unlocking the Intrinsic Potential of the Group

With globalization, cross-border flows are forecast to grow strongly

Asia

Brazil

US Mid West

Source : BCG Payments Report 2004

EuropeEurope

Volume: 3508 million (131%)Value:$367 trillion (100%)

Volume: 1566 million (224%)Value:$101 trillion (29%)

Volume: 1082 million ( 112%)Value:$136 trillion (97%)

Volume and value projections for 2011 (growth over 2001)

We are well placed to capture cross border flows between home markets and regions and high growth markets

Measuring progress in Transaction Banking

22Unlocking the Intrinsic Potential of the Group

Efficiency ratios are key

Efficiency Ratio

60%

70%

80%

90%

100%

Q104 Q204 Q304 Q404 Q105 Q205

JP MorganDeutsche Bank

ABN AMROCitigroup

Non-Consumer Clients

Our quarterly efficiency ratio (ER) for non-consumer clients is comparable to Citigroup, which has the lowest at 65%

1). ABN AMRO 2004 Numbers derived from FY2004. Source: Company Accounts 2004 – 2005 and ABN AMRO Analysts. HSBC claimed an efficiency ratio of 50% but it is not supported with financial data. Deutsche Bank, JPM Chase and Citigroup includes in their number custody. ABN AMRO includes only Cash and Trade.

23Unlocking the Intrinsic Potential of the Group

Room for further improvement in our efficiency ratios

The efficiency ratio for the non-consumer segment is market leading

– comparable to our peers who cover commercial segment, but not consumer

ABN AMRO Transaction Banking’s blended efficiency ratio across both consumer and non-consumer segments is 80%

However, at specific centres, still much room for improvement as other centres have very different efficiency profiles

– Consumer clients have a 95% efficiency ratio

24Unlocking the Intrinsic Potential of the Group

Transaction Banking delivers diversified revenue streams

% revenue by region 2005 (annualized) Commercial % revenue split by product

1% 14%

13%

72%

Credit cardsOverdraftTradeCash Management

Consumer % revenue split by product

Commercial

Consumer

32.64

95.47

54.52

49.96

79

45.48

50.04

7.09 0.4

38.31

4.53

19.79 1.63 100

67.37

80

EMEA

Asi

a

LATA

M NL

Bra

zil

NA

Cen

tral

Tota

l

8.1

24.68

16%

28%56%

0.5%

Credit cardsOverdraftTradeCash Management

25Unlocking the Intrinsic Potential of the Group

Strong revenue flows from target client segments

2005 Forecast Revenue Split 2008 Forecast Revenue Split

14%

67%

47% 53%

19%

29%

Consumer Commercial

Mass Retail

MNCs

Mid-market

PC /Mass

Affluent

Top Private Clients

Small Business

FIs 52%19%

52%

42% 58%

23%

Consumer Commercial

64%39%

9% 13%

Target Segments

In summary

27Unlocking the Intrinsic Potential of the Group

Leading Transaction Banking gives the ABN AMRO Group a key competitive advantage

Focus Value drivers

Scale Well positioned to insource partner bank volumesOne of the largest global transactional networks

High qualityearnings

Well diversified, low capital businessAnchor banking products; pivotal to cross-sellingCore banking product for commercial clients

InnovationSuccess transfer of product capabilities across client segments, global to commercial, and within segments from region to region

Enterprise-wide approach

Coordinating payments capabilities across global, consumer and commercial segments