Bank BPH Financial Results for 4Qs 2008

Transcription

1 Bank BPH Financial Results for 4Qs 2008 Investing for growth Warsaw, February 19, 2009

2 Executive summary

3 Year of investing for growth 49 new branches and 125 partner outlets, 14 Regional Credit Advisory Centers and 300 Mobile Advisors for SME Strengthened retail banking position In 2008 new outlets produced PLN 554MM of deposits and PLN 114MM of loans with 130 ROR-s opened every day 68K new customers, 161K deposit accounts, 27K ROR and 16K Harmonium packages 11 Corporate Centers offering full range of products and services (incl. transactional banking) with break-even point in first year* Over 1.4K new corporate/fi customers** PLN 1.3B of loans and PLN 1.3B of deposits DealingNet Rebuilding of corporate banking INM business growth INM securing the Bank s market risk position (incl. liquidity risk) BPH DealingNet system offering Corporate Clients effective access to treasury products & services via Internet Despite investment outlays of PLN 100MM and related costs of PLN 97.7MM, last year closed with PLN 174MM of pre-tax and PLN 114MM of net profits * Revenues to direct operating costs ** As at Dec. 31, /

4 Financial highlights IFRS consolidated data in PLNMM 83% Deposits Net interest income 4Qs07 Chng (%) Net F&C Qs07 44% Loans Net trading income Total net revenue* Costs** Qs07 Other operat. result % Assets Impairment charges Pre-tax profit Net profit*** Qs07 Total net revenue=nii+net F&C+Net trading income+net income from investments; ** Without cost allocation effect in 2007; *** Attributable to equity holders Deposits=Amounts owed to customers; Loans=Net loans and advances to customers 4 /

5 Efficiency ratios (%) ROE pre-tax 11.2 Loans/ Deposits pp pp ROE net 7.3 Loans/ Assets pp pp ROA net 0.88 Margin pp pp CIR 80.6 CAR pp pp ROE net = net profit to avg. shareholders equity; ROE pre-tax = profit to avg. shareholders equity; ROA = net profit to avg. total assets; CIR general administrative expenses to (total net revenue+other operating results); Margin = NII to avg. total assets 5 /

6 Bank BPH key statistics end-2008 Distribution channels Customer base Branches Retail ( 000) Partner outlets PI SME Own ATMs Corporate 18 1,196 Employees (FTEs*) ,172 4,265 Outlets, incl.: 2,336 Front office - 1,871; Back office 185; Management Credit Analyzes Centers 160 Corporate Centers and Macro-regions 86 Head Office 1,624 Brokerage Office 50 House Savings and Loan Office 9 * Without unpaid, maternity and child care leaves 6 /

7 Integration status quo 2007 November February 29 May June 6 June 17 September 24 October 28 Behind Spin-off legally effective Financial settlement of spin-off finalized BPH285 migration to Pekao completed KNF approval for GE Money to take over Bank BPH Acquisition of Bank BPH by GE Money Merger Plan/ Strategy for Merged Bank announced Expert's opinion on Merger Plan Ahead quarter New Merger Plan and Strategy for the Merged Bank 3 quarter Integration with GE Money Bank 4 quarter Operational merger + 7 /

8 Macroeconomic situation 8 /

9 GDP growth slowed visibly in 4Q08 resulting from a drop in investments dynamics 9 6,9 6,0 4,8 4,0 2,4 4,3 GDP (%, y/y)* 3,2 5,4 4,4 6,6 6,3 7,4 6,6 6,5 6,5 6,5 6,0 5,8 4,8 3,0 7,75 Private consumption (%, y/y) 6,7 5,6 5,5 5,7 5,4 5,5 5,3 4,7 5,14,6 4,8 4,8 5,1 4,8 3,1 3,5 2,7 2,6 1,3 1, Q08 3Q08 2Q08 1Q08 4Q07 3Q07 2Q07 1Q07 4Q06 3Q06 2Q06 1Q06 4Q05 3Q05 2Q05 1Q05 4Q04 3Q04 2Q04 1Q04 4,9 4,8 5,3 Investments (%, y/y) 10,1 6,4 3,9 1,2 8,6 23,8 19,0 17,3 15,7 15,1 15,2 15,2 8,5 16,0 16,7 3,5 3,6 4Q08 3Q08 2Q08 1Q08 4Q07 3Q07 2Q07 1Q07 4Q06 3Q06 2Q06 1Q06 4Q05 3Q05 2Q05 1Q05 4Q04 3Q04 2Q04 1Q04 0,5 4Q08 3Q08 2Q08 1Q08 4Q07 3Q07 2Q07 1Q07 4Q06 3Q06 2Q06 1Q06 4Q05 3Q05 2Q05 1Q05 4Q04 3Q04 2Q04 1Q04 4Q08 brought an escalation of the global crisis with a negative impact on the Polish economy 2008 GDP growth in Poland was 4.8%, but 4Q08 brought a marked slowdown (to around 3.0%). This resulted from significantly lower investments dynamics amid sharp drop in external demand and tightening credit conditions Consumption remained strong in 4Q08 as the worse growth outlook and deteriorating labor market situation did not feed through to consumer sentiment yet All figures reported as quarter average (unless stated otherwise); * 4Q08 figures are based on Statistical Office preliminary estimate for /

10 Disinflation in Poland continues Inflation (%, y/y) and 1M WIBOR Corporate & household loans (%y/y, quarterly averages) Corporate & household deposits (%y/y, quarterly averages) Inflation 6,5 1M WIBOR 6,2 6,3 6,4 5,6 5,6 5,2 4,7 4,6 4,8 4,3 4,1 4,3 4,7 4,3 4,1 4,1 4,1 4,1 3,6 3,5 3,7 2,3 2,1 2,4 2 1,6 1,1 1,4 1,4 0,6 0, ,5-4,5 Corporate Household 41,0 38,3 38,8 37,7 37,3 34,9 31,9 40,2 29,5 31,6 25,6 23,1 24,4 23,7 20,3 25,0 24,9 27,6 12,1 4,3 15,3 1,3 4,0 8,6 1,7 24,2 16,1 21,5 20,1 19, Corporate Household 29,9 25,3 24,2 26,0 22,9 24,2 21,0 16,8 23,0 22,3 20,8 17,8 15,2 21,5 19,9 11,7 15,7 9,3 8,3 8,5 9,7 7,8 8,7 7,0 5,3 6,9 8,6 8,3 4,5 5,7 5,0 3,9 1Q05 3Q05 1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 1Q05 3Q05 1Q06 3Q06 1Q07 Q307 1Q08 3Q08 1Q05 3Q05 1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 16,9% NPL in commercial banks (share %)** 19,6% 19,4% 13,6% 10,1% 7,4% 5,2% 4,4% Deteriorating growth outlook accompanied by a decline in inflation led to aggressive interest rates cuts in 4Q08. We expect monetary easing cycle to continue Household and corporate loans dynamics increased in 4Q08, to a great extent driven by exchange rate effects* Household deposits dynamics increased further in 4Q08 supported by attractive bank savings offers and EU subsidies to farmers. Corporate deposits dynamics slowdown continued in 4Q08 * Weakening zloty increases the value of foreign exchange-denominated loans as expressed in Polish zloty, ** according to KNF 10 /

11 4Qs financial results

12 Revenue side vs. 4Qs07 858,3 75,3 Total Net Revenue -34,0 36,6 2,6 938,9 (PLNMM) 9.4% 4Qs07 Net interest income & dividends Net F&C Trading result Net income from investments 9.4% increase (or PLN 80.6MM) in net revenue caused by 17.9% growth of net interest income mainly on higher loan and deposit volumes Net F&C 8.5% down mainly due to lower fees from investment fund management & distribution of participation units Trading result up by 65.7% due to high jump in FX gains but affected by PLN 11m correction of derivative valuation in Q4 0,3% 0,6% 6,5% 9,8% 46,6% 39,0% 46,6% 50,6% 4Qs07 Net income from investments Trading result Net F&C Net interest income and dividends 12 /

13 Cost side vs. 4Qs07 (PLNMM) ,9 111,5 General administrative expenses 33,6 4,3-14, % or 19.3% without Cost allocation impact 133,1 832,9 4Qs07 Personnel Building maintenance & rents * Referring to transactions between continued and discontinued operations defined by internal cost allocation system introduced in relation to spin-off Other expenses Depreciation Allocation of costs* Total costs up by 47.4% or 19.3% excl. positive impact of Costs allocation * in 2007 results 54% rise of building maintenance and rents related mostly to new outlets and HQ lease Personnel expense higher by 36% mainly due to recruitment PLN 11m of impairment charges in 4Q08 built-up as a reserve for undocumented credit risk Impairment charges 4Qs07-19,9-27,0 13 /

14 Assets structure vs. end-2007 (PLNMM) % 13,016 12, , Net loans* Trading assets Dues from banks Investments financial assets Other 73% Loans 1% 1% 0% 14% 58% 26% 27% Related Entity Corporate & CRE Private Individuals SME Assets up by 21.6% as a result of growth i.a. in loans (44%), amounts due from banks (51%) and trading assets (60%) Loans for Private Individuals still dominating, but share of corporate lending more meaningful * Net loans and advances to customers 14 /

15 Liabilities structure vs. end-2007 Deposits 0% 12% (PLNMM) Deposits* Dues to banks Evidenced by certificates Shareholders' equity Other 70% 30% 68% 20% Corporate Private Individuals SME % drop of dues to banks following i.a. closing of a short term liquidity buffer Surge in deposits of almost 83% (or PLN 4,651MM) Corporate Clients share in deposits of 12% * Amounts owed to customers 15 /

16 Appendices

17 Loan book break-down by segment and currency end-2008 vs. end % 1% 1% PI excl. Mtg 10% (vs.14%) SME 27% (vs.26%) 35% 3% 24% 28% 5% 6% Residential mortgages 48% (vs.59%) Related Parties 1% (vs.1%) Corporate 12% (vs.0%) CRE 2% (vs.0%) 62% 70% 65% PLN EUR CHF USD Loan portfolio for Bank BPH stand-alone = utilized loans + guarantees; PI Private Individuals; SME Enterprises with up to PLN 15MM annual turnover (within Retail Division); CRE Commercial Real Estate 17 /

18 Impaired loan portfolio Impaired loans (% of total loans) Provisions (% of impaired loans) 11,2% 67% 66% 69% 65% 62% 62% 67% 65% 62% 8,7% 7,8% 5,2% 4,1% 3,8% 3,1% 3,0% 3,1% 0% 0% 0% Total* PI SME Corporate 0% 0% 0% Total PI SME Corporate Loan portfolio of Bank BPH stand-alone */ Ratio for Bank BPH utilized loans only was equal 5.2%, 3.9% and 4.2% as at , and respectively 18 /

19 Loan portfolio by products end-2008 vs. end-2007 PI (excl. Mtg): PLN 0.9B (vs. PLN 0.8B) Cash Loan 59% (vs. 57%) Residential Mtg: PLN 4.3B (vs. PLN 3.6B) Other 14% (vs. 15%) Card 17% (vs. 17%) Personal Overdraft 21% (vs. 23%) Other 3% (vs. 3%) Constr. Loan 32% (vs. 31%) Real Estate Loan 54% (vs. 54%) Investment Loan 28% (vs. 34%) SME: PLN 2.4B (vs. PLN 1.6B) Mortgage Loan 14% (vs. 14%) Other 6% (vs. 6%) Corporate*: PLN 1.3B (vs. PLN 0.06B) CRE; 15% Guarantee s; 3% Revolving loans; 65% WCL* 24% (vs. 26%) Loan portfolio for Bank BPH stand-alone *Including Organizational Related Parties Overdraft 28% (vs. 20%) Investment loans; 17% Others; 0,2% 19 /

20 Retail business development total sales Retail loan volumes (PLNB) Retail deposit volumes* (PLNB) 23% 59% 9,5 6,1 6,4 6,5 6,8 7,5 6,0 6,8 6,6 7, Market shares (%) Q07 1Q08 2Q08 3Q08 4Q08 4Q07 1Q08 2Q08 3Q08 4Q Margins (%) Growth in cash loan sales of Pożyczka od Ręki +9% y/y to PLN 0.46B (new sale**: # 80.4K, volume PLN 0.45B) New sale** of Pożyczka od Ręki in 4Q08: # 10.7K, volume PLN 88MM Total cash loan portfolio up by 5% y/y to PLN 0.52B Introduction of new deposits products in 2008 (PI: Lok@ta 14D, Lokata Lojalnościowa, SME: e-lokata 1M) Deposit-base up for PLN 3.5B y/y Bulk of net deposit growth generated in 4Q08 (PLN 2.1B) * Including SCD: (in Bank BPH B/S), ** Including sale of KoR (GEMB Cash Loan) by Bank BPH branches 20 /

21 Number of retail customers per products end-2008 PI ( 000) SME ( 000) Total loans Consumer loans Mortgages Credit cards* Personal accounts Deposits Total loans WCL* and debits Investment loans Other loans Harmonium packages Deposits *Active cards only *Working capital loans 21 /

22 Retail business development investment products BPH TFI assets PLNB 6,5 54% 5,0 4,1 3,6 3,0 4Q07 1Q08 2Q08 3Q08 4Q08 BPH TFI assets down by PLN 3.5B vs. Dec. 07 due to a global slump on equity markets BPH TFI market share of 4.1% Issue of BPH-FIZ Korzystnego Kursu (PLN 41.2MM collected in 4Q2008) 22 /

23 Retail business development RORs and term deposits (new customers acquisition) ROR accounts for PI ( 000) % Q07 1Q08 2Q08 3Q08 4Q08 Growth of PI deposit volume (+67% y/y to PLN 7.3B) PI deposits of PLN 1.6B generated in 4Q08 due to high interest of fixed term deposits (3 36 months) and member-get-member marketing campaign New ROR packages +26.7K y/y 57% share of color* packages (+3.2pp. y/y) * Silver, Gold, Sez@m Max, Private Banking 23 /

24 Retail business development credit cards & distribution channels # of credit cards ( 000) Credit cards* Internet banking & Call Center** SME and PI ( 000) 26% y/y 61% y/y 4Q07 1Q08 2Q08 3Q08 4Q08 4Q Active credit cards number decrease offset by: Higher average transaction amount per one card (4% y/y) Growth of number of transaction per one card (2% vs. 3Q08) 3Q08 2Q Credit cards transaction volume (PLNMM) Q Q Q07 4Q08 * Active cards only; ** Including transactional services 24 /

25 Retail business development Harmonium & loans for SME Deposit-base enhanced (+38% y/y to PLN 2.2B) 57 Harmonium packages ( 000) 60 29% Deposits in 4Q08 up by PLN 0.5B Growth of loans (+44% y/y to PLN 2.3B) Further development of alternative distribution channels based on BusinessNet internet platform (DealingNet, TransCollect, TransCash, TransDebit) New loan product Prosty Kredyt Inwestycyjny 4Q07 1Q08 2Q08 3Q08 4Q08 Development of distribution network: 18 Regional Credit Advisory Centers and 300 Mobile Advisers SME 25 /

26 Retail business development mortgage lending Residential Mortgages (PLNMM) PLN share 18% 4,31 100% As at Total PLN FX 3 3,77 3,65 3,65 3,72 48,2% 46,9% 41,1% 42,7% 43,4% 4Q'07 1Q'08 2Q'08 3Q'08 4Q'08 Market shares (%) 50% 0% Av. maturity* (years) Av. Amount** (in PLN 000) Av. LTV*** 48% 54% 43% NPL 2.3% 2.2% 2.3% Portfolio growth dynamics (Dec.08/ Dec.07) 18% 25% +14% 1) Total PLN *contractual maturity; **loans granted in 2008 with only small portion of FX loans; ***current LTV adjusted to mortgage collaterals revaluation 1) Result of exchange rate increase 26 /

27 Corporate banking strategic milestones Re-establishing of sales network (Corporate Centers) throughout the country: 11 Centers (vs. 10 originally planned) Human capital and resources build-up almost done Pre spin-off product and services fully restored practically all products offered Customer portfolio growing rapidly 1,196 new corporate customers serviced at end-2008 Break-even on direct cost base achieved in first year Volumes (PLNMM) Loans Deposits Dec. 31, , , Q 08 average /

28 Corporate banking successful business initiatives Transactional Banking/ Deposits/ Treasury DealingNet sales brought spectacular success (409 corporate clients in 6 months; in December 61% of deposit transactions and 48% of F/X transactions processed) TransKasa over 1,000 new points of sale; over 980K payment transactions processed (value of PLN 134MM ) Almost 1,000 corporate customers are using BusinessNet Transactional Internet Banking BusinessNet - advanced Internet Banking system available for small businesses (over 800 customers) Bank BPH honored with the Lider Eksportu award and title for Trade Finance 28 /

29 INM business development Treasury products sales margin* from continuing operations 100% 4Qs07 96% 196% * Results from sales of treasury products and custody services generated by INM Division are presented entirely in Retail and Corporate segments results 96% y/y growth of net income from sales of treasury & investment products by INM Division for Retail/SME, Corporate and Financial Institutions Clients in 2008 from continuing operations in line with high sales standards MIFID compliant DealingNet Development of new INM Treasury strategy as well as reengineering and implementation of new INM Treasury business model Treasury Sales team rebuilt and 894 new clients acquired BPH DealingNet treasury internet platform won prestigious Europroduct 2008 award Market risk positions, including liquidity of the Bank, managed efficiently in spite of highly turbulent financial markets 29 /