Bank BPH 1Q 2016 Earnings

Transcription

1 Bank BPH 1Q 2016 Earnings Webcast 1

2 Overview of 1Q 2016 In PLN Sale process Agreed and signed the Demerger Plan moving into regulatory approval process Profitability Significant adjustments booked to P&L (370 MM Bank level plus additional 77 MM Group level) as a result of transaction net loss of 496 MM Performance Retail loans and commercial limits granted of 1.7 B, up 5% y/y Costs Operating costs flat year on year Quality Positive impairment charges of 1.5 MM impaired loans down 4% y/y and 1% q/q NPL ratio of 7.5% down 0.2 pp. y/y and stable q/q high recovery, successful debt sale and better IBNR Safe & sound TCR at 16.9% and Tier I at 13.4% under Basel 3 rules liquidity and market risk maintained at a safe level Tier II capital injection (sub-debt) of CHF 75 MM to strengthen capital base 2

3 Key transaction milestones Date Milestone Communication from GE - transaction in an advanced stage transaction price not likely to exceed tangible book value trigger to goodwill write-off decision / SPA and pre-demerger agreements signed purchase price for Bank BPH Core Business set at PLN 1,225 MM P/TBV at 0.93x Demerger Plan agreed and signed by Bank BPH and Alior Demerged Business will be transferred to Alior Bank and Mortgage Business will remain in Bank BPH share exchange ratio Alior/BPH at Q-4Q 16 Regulatory consents (KNF, Antitrust Authority), Alior rights issue and tender offer, Bank BPH and Alior Bank general meetings 4Q 16 Expected Demerger and transaction finalization 3

4 Bank BPH after the Demerger mono product operations - PLN and FX mortgage loans portfolio 87.5 K loans expected to remain in Bank BPH fully financed by GE no deposits from clients phasing-out operations mortgage loans gradual repayment and no originations clients served mainly via remote channels close cooperation with Alior in servicing the portfolio based on outsourcing agreements Current shareholding structure Targeted shareholding structure GE Minority GE 87.2% 12.8% 100% Bank BPH BPH TFI 50.1% Bank BPH BPH TFI 50.1% 4

5 1Q Q 2015 Accounting items directly related to transaction In PLN Estimated impact Impacts Bank capital Impact on Bank capital adequacy Goodwill impairment (916 MM) No GE Group confirms Bank BPH sale unlikely to achieve price in excess of Tangible Book Value : Bank 155 MM + Group 761 MM Disposal group classification (IFRS 5) (290 MM) Assets to be sold re-classified to disposal group Disposal group must be at fair value Allocated pro-rata: KNF Required Fair value reflects transaction price (below book value) Re-measures quarterly with deal pricing mechanism (196 MM) (94 MM) Tangibles Intangibles Yes No TCR Tier % 12.33% Deferred tax assets assigned to Mortgage Business DTA assigned to Mortgage Business based on agreed Demerger Plan (80 MM) Yes TCR 16.90% Tier % Weak profitability outlook for Mortgage Business DTA must be supported by future profit projection, if not, lack of basis for DTA set up 5 TOTAL 1Q 16 Bank Standalone impact Trademark & other historic purchase accounting Trademark remains with Mortgage Bank per De-merger Plan Originations cease, profitability insufficient to support trademark Fair value of other purchase accounting items, such as tangibles, intangibles, aggregate loan values, etc. + associated DTA/DTL related to Demerged Business TOTAL 1Q 16 Bank Consolidated impact (370 MM) (77 MM) (447 MM) No

6 Financial performance PLN MM Net interest income 1Q 16 1Q 16 Mortgage Business for Business demerger 1Q 16 Total VPQ 3 VPY (4%) (6%) Business for demerger portfolio (PLN MM, net, average) 9% 7,546 7,661 8,052 8,313 8,188 Net F&C + trading + other (11) (31%) (27%) 3,694 3,889 4,111 4,296 4,395 Total net revenue (12%) (12%) 3,851 3,773 3,941 4,018 3,793 Impairment charges (13) 14 2 Improve ment Increase 2Q'15 3Q'15 4Q'15 RANR (4%) (13%) Commercial Retail* Costs (37) (250) (288) (2%) Flat Mortgage Business portfolio (PLN MM, net, average) Profit before tax w/o one-offs (19) 0 (18) (41%) Decrease 6% 15,546 15,300 15,082 14,877 14,687 One-offs (195) (303) (497) n/a n/a 1,582 1,609 1,656 1,717 1,780 Net loss (198) (298) (496) Improve ment Decrease 13,964 13,691 13,427 13,160 12,907 Deferred tax 80 MM Trademark 80 MM 4 Other 35 MM Book value adjustment 290 MM PPA 13 MM Business for demerger portfolio annual growth 2Q'15 3Q'15 4Q'15 FX MTG** PLN MTG 1/ Total net revenue = NII + Net F&C + Net trading income + Other operating income and expenses; 2/ Risk Adjusted Net Revenue = Total net revenue + Impairment charges 3/ 4Q 2015 data used in calculations includes following one-offs: Goodwill 916 MM, Restructuring 177 MM, MTG support fund 24 MM, BFG additional charge 23 MM 4/ Trademark 64.8 MM net of tax following the release of an associated deferred tax liability */ 6 Including credit cards, cash loans, sales finance and auto loans; **/ Constant FX as of 1Q 15 Business 12 May for 2016 demerger/ Mortgage Business financials have been prepared on the basis of estimates and assumptions, a full disclosure of which can be found in the Interim Condensed Financial Statements.

7 Retail performance highlights Total retail sales* (PLN MM) 4% Mortgage loans sales (PLN MM) % K C/As serviced at end 1Q, up 12% y/y 23 K new accounts in 1Q balance of PLN 2.5 B Czarno na białym and Powrót odsetek campaigns PLN 538 MM cash loans granted in 1Q gross portfolio of PLN 4.3 B, up 22% y/y Mortgage offer placed at the high positions in independent rankings offer attractive for customers No SCD issue in 1Q 16 Investments gross sales (PLN MM) C/A balance (PLN MM, eop) 20% % 2,059 2, */ Incl.: cash loans, mortgage loans, cards, overdrafts 7 Continued positive development of retail sales

8 Commercial performance highlights Renewals New SME sales* (PLN MM) 6% Factoring turnover** (PLN MM) Corporate sales* (PLN MM) C/A balance (PLN MM, eop) 6% PLN 2.6 B balance on commercial C/As, up 18% y/y Corporate +25% and SME +14% Total value of limits granted under cooperation with BGK reached PLN 1,076 MM at end 1Q, +4% YTD Total factoring liabilities of PLN 522 MM in 1Q 41 K invoices 11% 18% ,230 2,639 */ Limits granted **/ Data includes reverse factoring 8 Focus on high quality commercial originations

9 Mortgage Business - PLN portfolio key metrics PLN MM Receivables (AVG, gross) 1,802 2,023 NII stable Fees & FX income decrease 12% Revenue stable Losses improvement RANR growing PLN mortgage portfolio increase 9

10 Mortgage Business - FX portfolio key metrics PLN MM Receivables (AVG, gross) 14,029 13,391 NII Fees & FX income down 24% down 54% 5% Revenue down 28% Losses increase RANR down 59% Stable portfolio in run off 10

11 Non-MTG retail key metrics (for demerger) PLN MM Receivables & deposits (AVG, gross) 7,300 7,494 4,526 4,930 NII Fees & FX income up 3% down 25% 9% 3% Receivables Deposits Revenue down 3% Losses improvement RANR stable Solid, growing business 11

12 SME key metrics (for demerger) PLN MM Receivables & deposits (AVG, gross) NII Fees & FX income 1,932 2,312 2,443 1,713 down 13% stable 11% 6% Receivables Deposits Revenue down 8% Losses improvement RANR stable Focus on high quality portfolio 12

13 Corporate key metrics (for demerger) PLN MM Receivables & deposits (AVG, gross) 2,341 2,412 2,270 2,329 NII down 11% Fees & FX income down 29% 3% 3% Receivables Deposits Revenue down 21% Losses RANR increase down 66% Revenues affected by one-off loan impairment 13

14 Business cost performance Costs (PLN MM) stable C/I ratio (%) up 15 pp % 108% C/I ratio reflective of lower rate environment 14

15 Asset quality Losses NPL ratio 3 Core losses excl. Debt Sale (DS) Costs of risk excl. DS Debt sale (38) (50) Booked risk cost Cost of risk ratio % 0.03% Core losses (excl. DS) ratio (0.6%) (0.8%) 1Q 16 core losses influenced by default of one Commercial client offset by positive result of retail debts sale 7.7% 7.5% 7.5% Q'15 Performing loans (PLN B) Impaired loans (PLN B) NPL 1Q 16 stable level of impaired loans and ratio Retail 30+ delinquency(%) 2 Corporate and Mid SME average PD (%) 4.0% 3.9% 3.7% 3.0% 2.3% 2.3% 1.5% 1.5% 1.6% 1.4% 0.8% 0.9% 2.4% 1.2% 2.0% 2.0% 1.6% 1.4% 4Q'15 PID MTG PLN MTG CHF SME MICRO Improvement of delinquency trends maintained across retail segments except for MTG CHF impacted by high CHFPLN rate 4Q'15 Mid SME Corporate Continued good quality of Commercial portfolio 1/ Costs measured in the relation to total credit portfolio 2/ With delinquency cut-off at 180 dpd 3/ Based on gross volumes, end of period 15

16 Capital and liquidity positions Capital ratios (%, eop) Recommended TCR TCR TCR at 16.9% and Tier I ratio at 13.4% well above the regulatory minimums despite accounting adjustments Recommended Tier I 4Q'14 2Q'15 3Q'15 4Q'15 TCR TCR minimum Tier I Strong liquidity position Market risk exposures on a safe level Tier II capital injection (sub-debt) of CHF 75 MM to strengthen capital base 4Q'14 2Q'15 3Q'15 4Q'15 Tier1 Tier 1 minimum Strong and stable capital and liquidity positions 16

17 Summary 1. Agreed and signed the Demerger Plan moving into regulatory approval process 2. Significant transaction related adjustments in 4Q 15 & 1Q Growth in sales and key assets 4. Maintaining strong portfolio quality 5. Maintaining strong capital and liquidity 17

18 Disclaimer This presentation does not constitute or form any part of an offer, invitation or inducement to sell or subscribe, or any solicitation of an offer to purchase or subscribe for any securities. This presentation does not purport to contain all information that a prospective investor might require, and neither this presentation nor any part of it nor the fact of its distribution shall form the basis of, or be relied on in connection with, any contract for the purchase or subscription of any securities. The forecasts and forward-looking statements contained in this presentation are necessarily based upon a number of assumptions and estimates that, while considered reasonable by us, are inherently subject to significant business, operational, economic and competitive uncertainties and contingencies, many of which are beyond our control, and upon assumptions with respect to future business decisions that are subject to change. Actual results may differ materially from those projected. Certain items of numerical information and other amounts and percentages set forth in this presentation may not add up to the correct total due to rounding. 18