A presentation from GBRW Consulting on the key challenges and success factors in the successful realisation of the benefits of mergers and acquisitions in emergin market banks, the implementation of change, and the realisation of benefits.

1. BANK MERGER
INTEGRATION IN
EMERGING MARKETS
Combining cultures
to realize the
benefits of mergers
& acquisitions

2. WHY DOES MOST M&A ACTIVITY FAIL TO
DELIVER SHAREHOLDER VALUE?
 Failure to engage in disciplined strategic planning prior to
transaction
 Inadequate planning and preparation for post-merger
integration
 Underestimation of the difficulty and costs of executing a
successful merger
 Shortage of the necessary financial or human resources
 Insufficient consideration of the “people side of change”
 Obsession with cost savings at the expense of revenue growth
Most mergers fail in implementation,
rather than the transaction

3. PLANNING FOR POST-MERGER:
PRIORITISING ACTIVITIES
Type of integration
Merger of equals Acquirer dominant
Rationaleforintegration
Revenuefocus
Customer: drive income growth
 Integration of marketing function
 Customer communication
 Customer MI
 Development of brand strategy
Sales focus: capitalise on franchise
 Mobilisation and motivation of sales force
 Development of cross sales capability
 Harmonisation of product development
Costfocus
Internal: rationalise shared functions
 HR strategy and organisation structure
 Operations and IT strategy
 Harmonisation of risk management
Cost benefits: leverage scale benefits
 Network rationalisation
 Supplier management
 Manpower planning
 Corporate finance
Retention of customers and key staff is
the first priority in all cases

4. PRE-TRANSACTION: STRATEGY IS A
CASCADE OF CHOICES
What are our goals and
aspirations?
Where will we play?
How will we win in our chosen
markets?
What capabilities must be in place
for us to win?
What does success look like?

5. MANAGEMENT INFORMATION: CRUCIAL
TO STRATEGY & BUSINESS EXECUTION
Management
Information
Strategy
Performance
Management
Business
Results
1. Setting staff day-
to-day business
targets with
measures linked
directly to strategic
objectives
2. Staff behaviour and
activities are aligned to
drive business results
and support strategy
3. MI provides feedback
on the relative success
of strategy and the
performance of staff
4. Feedback and
reward to staff
depending on
performance
against targets
The virtuous triangle hangs on relevance,
depth, quality and timeliness of MI

6. WHY DO PEOPLE MAKE THINGS SO
DIFFICULT?
 Why are my staff so resistant to change?
 How can we make our customers loyal to the company rather than
individuals?
 How can we motivate our top sales staff and retain key staff?
 How can we incentivise staff to work towards shared strategic
goals?
 Why won’t different departments work together better?
 Why won’t my staff make decisions and are always delegating
upwards?
Effective communication is key to
answering these questions

7. RESISTANCE TO CHANGE: THE ‘GOOD
NEWS’ CURVE
Uninformed
certainty
(confidence)
Resistance/inertia
Change Programme Implementation (Time)
Covert
checking
out
Overt
checking
out
Informed doubt
(pessimism)
Realistic
concern (hope)
Informed certainty
(confidence AND
satisfaction)
Neutral
Mild
resistance
Active
resistance
Mild
support
Active
support
Highest value destruction risk:
 Loss of key people
 Staff demotivated
 Customer attrition

8. COMMUNICATION IS THE KEY TOOL IN
OVERCOMING RESISTANCE TO CHANGE
Change Resistance
 Why are my staff so resistant to change?
 How can we make our customers loyal to
the company rather than individuals?
 How can we motivate our top sales staff
and retain key staff?
 How can we incentivise staff to work
towards shared strategic goals?
 Why won’t different departments work
together better?
 Why won’t my staff make decisions and
are always delegating upwards?
Communicate to overcome
 Help staff to feel ownership of the change
process by communicating with and
involving early as possible.
 Craft a credible and inspiring corporate
story (relevant to all stakeholders) to
propel the communications effort
 Shape a strong performance culture and
select the new ‘top teams’ fast
 Implement a strategy implementation
methodology linked to performance
management
 Defensiveness can only be overcome
through active change management and
communication
 Communicating effectively is critical to
ensuring staff take ownership of change
and ultimately drive it

9. BUILDING A CHANGE CULTURE
CHANGE
CULTURE
Strong
Leaders
Shared
Vision of
the
Future
Comms
Strategy
Realise
the
Benefits
Buy-in of
Staff
Effective
Stake-
holder
Mgmt
Change management is about generating
commitment to change

10. A SHORT CHECKLIST TO APPLY AGAINST
YOUR NEXT TRANSACTION
• Have we made realistic estimates of the timescales and cost of
integration?
• Do we have a dedicated change management function and methodology?
• Have we made a detailed, prioritised plan against which to track the
realisation of the merger benefits (cost and income)?
• Are we actually improving the merged company or are we just spending
money harmonising procedures between different banks?
• If I’m thinking of a transaction, am I already thinking of my
communication plan?
• Will I have the necessary Management Information to know if change is
successful or not?
The biggest risk factor in merger failure is
organisational inexperience

11. HOW DOES GBRW CONSULTING ASSIST
THE M&A PROCESS?
 GBRW Consulting has 15 years experience in bank restructuring and
implementing large-scale change
 We provide advisory services to other banks on strategy and change
management throughout Eastern Europe, Africa, the Middle East, and Asia
 We can work closely with financial advisors to provide a seamless service
GBRW Consulting can add value to both
ends of the M&A process
M&A Strategy
Transaction
Execution
Post-Merger
Integration
GBRW GBRW

12. CONTACT DETAILS AND FURTHER
INFORMATION
Mike Coates, Director
 You can find out more about GBRW
Consulting by visiting our website on
http://www.gbrw.com
 Visit my LinkedIn profile at
http://uk.linkedin.com/in/mikecoates73
and feel free to connect
 Email us at mail@gbrw.com