Transaction Banking

A Global Product Business

Ann Cairns CEO Transaction Banking

ABN AMRO Investor Day Duin and Kruidberg, 14 December 2005

Agenda
What is Transaction Banking at ABN AMRO? How are we organised? Delivering strong results A strategy for growth Measuring progress In summary

Unlocking the Intrinsic Potential of the Group

What is Transaction Banking at ABN AMRO?

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

Billions of transactions in multiple currencies, operating from 59 countries 3rd largest networked bank Predictable recurring operating income in excess of EUR 4 billion in 2005 Industry awards for best in market solutions

High quality earnings

Innovation

Enterprisewide approach

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

Unlocking the Intrinsic Potential of the Group

Transaction Banking at ABN AMRO

Transaction Banking

Core product lines

Cash Management

Trade

Cards

Unlocking the Intrinsic Potential of the Group

Transaction Banking at ABN AMRO

Business

Transaction Banking

Core product lines

Cash Management

Trade

Cards

International Partner Banks

Supply Chain

Solutions (examples)

Treasury

Payables

Working Capital Receivables

Regions

S. America

N. America

Netherlands

Europe

Asia

Unlocking the Intrinsic Potential of the Group

Examples of client solutions

Business

Transaction Banking

Core product lines

Cash Management

Trade

Cards

International Partner Banks

Supply Chain

Solutions (examples)

Treasury

Payables

Working Capital Receivables

Regions

S. America

N. America

Netherlands

Europe

Asia

Unlocking the Intrinsic Potential of the Group

Examples of products for our different client segments

Consumer Clients Payments Point-of-sale Cash/Credit Credit Cards Money Transfer Private Clients Payments Point-of-sale Cash/Credit Credit Cards Money Transfer Commercial clients Money Market Deposit Account Payments Collections Liquidity Management Account Service Supply Chain Financing Trade Finance Trade-related Guarantees Global Clients Payments Collections Liquidity Management Treasury Service Account Service Supply Chain Financing Trade Finance Trade-related Guarantees Financial Institutions FI Outsourcing CLS Trade Finance Corporate Account Service Clearing Trade-related Guarantees Correspondent Bank Business

Unlocking the Intrinsic Potential of the Group

How is Transaction Banking organised at ABN AMRO?

A group-wide model
NL Europe North Latin America America Asia PC Global Clients

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

Consumer Client Segment Commercial Client Segment Local Products Local Products Local Products Local Products Local Products Local Products M&A ECM

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 Transaction Banking Asset Management Services Group Functions

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

Unlocking the Intrinsic Potential of the Group

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Transaction Banking organisation

Established 1st January 2005
CEO Transaction Banking Ann Cairns

Mark Towson Human Resources

Byron Haynes COO Functions

Netherlands Maarten Mol

Europe Daniel Cotti

North America Cindy Murray

LATAM (ex Brazil) Claudio Migliore

Brazil Sergio Costantini

Asia Peter Chow

Client Service - Ian Holden-Semple Global Transaction Delivery - Edward Glassman CIO Transaction Banking Robert Langefeld Head GSS Operations, Transaction Banking Rob De Ridder

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ABN AMRO Transaction Banking is delivering strong results

The enterprise-wide approach is delivering strong results

Significant Growth versus YTD 2004

Major improvement across entire business: Strong organic growth in Brazil and North America Operating Result driven by both consumer and commercial businesses

60% 46% % Growth 40%

20% 12%

0% Operating Income Operating Result

Unlocking the Intrinsic Potential of the Group

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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 20s 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

Unlocking the Intrinsic Potential of the Group

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A leading Transaction Bank

No. 1 Customer Satisfaction Eastern Europe Cash Management Poll October 2005 No. 2 Cash Manager in Western Europe and Central and Eastern Europe Cash Management Poll October 2005 Best at Cash Management Western Europe Awards for Excellence July 2004 and 2005 November 2005 April 2004 and March 2005 Cash Pro Web No. 1 Internet Application for Cash Management Services Best Bank for Cross-border Pooling and Netting Western Europe

An extensive network:
Best Online Trade Finance Bank Award for Excellence June 2003,2004 & 2005

Including large and successful local businesses Brazil Best Bank for Best Trade Platform/Best in Europe, Excellence in the US and
online Trade Provider

Enables us to compete as one of the Top 5 January 2005 July 2005 May 2005 Banking banks in Transaction In some cases we achieve number 1 position
Winner, Risk Management Technology Awards 2005 Euromoney Technology Awards Cash Management Poll 2005 September 2005 Best Electronic Services in Trade Finance Best Providers of CLS offering for FIs

Outsourcing ABN AMRO and KeyCorp

Liquidity/Working Capital Management Europe

Best Online Cash Management Bank Europe

January 2005

Best Online Trade Finance Website

Best Trade Finance Bank Europe

January 2005

June 2005

March 2004 & 2005

June 2002, February 2003, 2004 and 2005

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Client and industry recognition

No. 1 Customer Satisfaction Eastern Europe Cash Management Poll October 2005 No. 2 Cash Manager in Western Europe and Central and Eastern Europe Cash Management Poll October 2005 Best at Cash Management Western Europe Awards for Excellence July 2004 and 2005 November 2005 April 2004 and March 2005 Cash Pro Web No. 1 Internet Application for Cash Management Services Best Bank for Cross-border Pooling and Netting Western Europe

Best Online Trade Finance Bank Award for Excellence June 2003,2004 & 2005

Best Trade Platform/Best online Trade Provider

Excellence in Outsourcing ABN AMRO and KeyCorp May 2005

Best Bank for Liquidity/Working Capital Management Europe January 2005

Best Online Cash Management Bank Europe

July 2005

January 2005

Best Online Trade Finance Website

Winner, Risk Management Technology Awards 2005

Best Electronic Services in Trade Finance Euromoney Technology Awards

Best Providers of CLS offering for FIs Cash Management Poll 2005 September 2005

Best Trade Finance Bank Europe

January 2005

June 2005

March 2004 & 2005

June 2002, February 2003, 2004 and 2005

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A strategy for growth

Strategy for growth

Transaction Banking

Revenue Growth

Rationalisation

Resourcing

Roadmap

Resilience

Pillars

Organisational structure Performance Contract & KPIs Investment Budget Alignment across SBUs

Foundations

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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 Caisse DEpargne (FR), Suncorp (AU)

Unlocking the Intrinsic Potential of the Group

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

We are well placed to capture cross border flows between home markets and regions and high growth markets
Volume: 3508 million (131%) Value:$367 trillion (100%)

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

Europe Asia

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

Volume and value projections for 2011 (growth over 2001)

Source : BCG Payments Report 2004

Unlocking the Intrinsic Potential of the Group

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Measuring progress in Transaction Banking

Efficiency ratios are key

Non-Consumer Clients

100%

Efficiency Ratio

90%

80%
JP Morgan Deutsche Bank

70%

ABN AMRO Citigroup

60% Q104 Q204 Q304 Q404 Q105 Q205

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.

Unlocking the Intrinsic Potential of the Group

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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 Bankings 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

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Transaction Banking delivers diversified revenue streams

% revenue by region 2005 (annualized)
Consumer Commercial 24.68 4.53 19.79 45.48 Credit cards 54.52 50.04 95.47 38.31 72% 13% Overdraft Trade Cash Management 1.63 100

Commercial % revenue split by product

1% 14%

67.37

Consumer % revenue split by product

16% 49.96 Credit cards Overdraft 56% Brazil Trade 28% Cash Management

7.09 8.1 80 EMEA 79

0.4

32.64

LATAM

Central

Total

Asia

NA

NL

0.5%

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Strong revenue flows from target client segments

2005 Forecast Revenue Split 2008 Forecast Revenue Split

14%

Top Private Clients MNCs PC / Mass Affluent Midmarket

19%

9%

13%

Target Segments
FIs 52% 39% 64%

19%

67%

Mass Retail Small Business

29%

52%

23%

Consumer
47%

Commercial
53%

Consumer
42%

Commercial
58%

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In summary

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

Value drivers
9 9 9 9 9 9 Well positioned to insource partner bank volumes One of the largest global transactional networks

High quality earnings

Well diversified, low capital business Anchor banking products; pivotal to cross-selling Core banking product for commercial clients Success transfer of product capabilities across client segments, global to commercial, and within segments from region to region

Innovation

Enterprisewide approach

Coordinating payments capabilities across global, consumer and commercial segments

Unlocking the Intrinsic Potential of the Group

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