upon which RMs can act quickly. In a recent test, cross-sell rates tripled when RMs were supplied with higher-quality leads. Indeed, accounts per client rose to more than three in our Retail Bank, and climbed 7 percent in Small Business. 

Finally, Consumer Banking rolled out nationwide in December a Service is The Key Difference program in our more than 900 KeyCenters. Its aim is to reinforce among employees the impor- tance of providing clients with superior service on a consistent basis. Nine out of 10 client comments received to date are favorable. 

## Corporate and Investment Banking 

Corporate and Investment Banking earned $394 million for the year, about the same as last year. 

In an environment where commercial and industrial lending fell 7 percent industry-wide, that result is an accomplishment, which I ascribe to several factors. 

One factor is Corporate and Investment Banking’s business mix. 

The decline in demand for loans was offset by an increase in clients’ appetite for equipment leasing solutions. 

Earnings in the group’s Key Equipment Finance line rose 77 percent from the prior year’s. The group’s highly suc- cessful Lead with Leasing program, which promotes cross-selling by equip- ment leasing and commercial lending professionals, drove part of the increase. Helpful too was the January 2003 acquisition of the equipment- leasing portfolio of Canadian-based TD Bank Financial Group. 

The group’s business mix also posi- tions it to take full advantage of ongoing recoveries in the economy and financial markets. This is because Corporate and Investment Banking offers clients total capital solutions, not just credit. 

The group’s cost structure is another important factor. Group President Tom Bunn and his staff have made it increas- ingly variable, largely by overhauling incentive compensation practices. Now, payouts occur only when teams – versus individuals – cross-sell a variety of prod- ucts that meets a broad spectrum of 

client needs and produces required returns to shareholders. Monthly reviews ensure that RMs regard the judi- cious use of resources and the expansion of relationships as chief responsibilities. 

A final factor is Corporate and Investment Banking’s heightened busi- ness focus, which has taken many forms. For instance, the group to date has exited approximately one quarter of its credit-only relationships and has focused on those industry and client segments where it believes it can add substantial value profitably. It also has invested to build capability in attractive offerings such as syndications, credit derivatives and fixed income capital markets. Such focus helped, for example, increase the proportion of our institu- tional clients that have multiple products to 34 percent in 2003 from 29 percent in 2002. 

## Investment Management Services 

Investment Management Services earned $97 million for the year, down from $111 million in 2002. That result is hardly surprising given the state of the equity markets and fragile investor confidence during much of the year. 

Notable developments at Victory Capital Management, headed by Group President Rick Buoncore, included the July 2003 acquisition of NewBridge Partners, an investment management firm based in New York City. The firm’s growth orientation and high-quality stock-selection process complement Victory’s traditional value orientation and support its Responsible Risk, Remarkable Returns brand objective. 

In addition, Victory enjoyed signifi- cant growth in the availability and acceptance of its products in retail and institutional advisor channels, such as wirehouses and consultants. Assets under management increased by $7 billion during the year. 

McDonald Financial Group (MFG), headed by Group President Bob Jones, made substantial progress on an indus- try-leading integration of its banking, investments and trust businesses. The result of this effort doubled, on average, the number of MFG services purchased 

## 1Key 

For Key, the answer is its 1Key Client Experience effort. Through it, the company is connecting people, processes and technology into a winning, client-oriented team. 

PEOPLE: Key is preparing employees to sup- plement activity-based tracking (how many sales calls did you make this month?) with outcome- based tracking (did clients make a purchase and, if not, why not?). Among the beneGLYPH<222>ts: Key can coach employees to reach much higher levels of performance — and hold them accountable for achieving it. 

PROCESSES: Key is reGLYPH<222>ning its sales processes to be as efGLYPH<222>cient and powerful as possible. For instance, the company learned in a September test that the number of people buying savings accounts more than tripled when sold using a combination of direct mail and documented follow-up by RMs, instead of direct mail alone. 

TECHNOLOGY: Key, over time, will replace approximately two dozen sales management sys- tems with one. ThatGLYPH<213>s unique, and a far cry from the days when each business relied on separate, incompatible systems. The savings in ongoing programming costs alone will be substantial. 

by participating high-net-worth clients. 

MFG also invested to increase the recognition of its newly launched brand. A good example is the Affluent Consumer Confidence Index, a nationally reported measure of market sentiment, which MFG launched in January 2003. 

Recognition among the affluent of MFG as a powerful brand now rivals that enjoyed by established, much larger competitors. 

ItGLYPH<213>s an age-old question for company managers. How to tap the expertise of a far- GLYPH<223>ung group of employees, combine it with a deep understanding of clients and markets, make it available whenever and wherever needed, and create a sufGLYPH<222>cient level of discipline to generate new revenue opportunities. 

## CLIENT EXPERIENCE 

