Financial Results for 2Qs08

Transcription

1 Financial Results for 2Qs 2008 Entry into General Electric Company Warsaw, July 30, 2008 Page 1

2 Executive summary Macroeconomic situation 2Qs08 financial results Appendices Loan book overview Business development Page 2

3 Financial Highlights Continued business only IFRS consolidated data in PLNm 2Qs08 2Qs07 2Qs08/ 2Qs07 Net interest income % Net F&C % Net trading result Total net revenue* % Costs /343** 46/14%** Other operating result Impairment charges ~ 0% Pre-tax profit ~ 0% Net profit % B/S changes vs. Dec (in PLNm) 20% deposits to 6,756 (from 5,621) 16% loans to 7,142 (from 6,165) 6% equity to 1,556 (from 1,473) 7% assets to 12,127 (from 13,027) ** Excluding impact of Cost Allocation in 2Qs07 Total net revenue=nii+net F&C+Net trading result+net income from investments; Deposits=Amounts owed to customers; Loans=Net loans and advances to customers Page 3

4 Efficiency Ratios (%) ROE pre-tax 4.0 pp. 2Qs ,3 19,3 Loans/ Deposits 4.0 pp. 2Qs ROE net 1.9 pp. 2Qs ,2 12,1 Loans/ Assets 12 pp. 2Qs ,5 0 2 ROA net 0.2 pp. 2Qs ,2 1,4 Margin 1.3 pp. 2Qs ,81 3, CIR 10.2 pp. 2Qs ,9 75,1 Net profit/ FTE (PLN 000) 15.2% 2Qs ,2 56,4 ROE net = net profit to avg. shareholders equity; ROE pre-tax = pre-tax profit to avg. shareholders equity; ROA = net profit to avg. assets; CIR = general administrative expenses/ (total net revenue + other operating result); Margin = NII to avg. total assets Page 4

5 Reduced Scale of Activity After the Spin-off in PLNm change Assets 64,757 13,027 80% Loans Deposits Equity Total net revenue Costs Retail Customers Corporate Customers Employees 35,594 6,165 83% 41,534 5,621 87% 6,861 1,473 79% 3, % 1, % 2,192 ths 692 ths 68% ca. 10 ths 0 100% 9,671 3,172 67% * Discontinued and continued business in 2006 vs. continued business only for 2007 Page 5

6 Quick Business Rebuilding Strengthened retail banking position: 41.7 thousand new customers and 1.2 thousand brokerage accounts opened Start-up of 89 partnership outlets 8 new branches 14 Regional Credit Advisory Centers for SME Launching 4 brokerage points of sale (34 in total) Dynamic rebuilding of corporate banking: 8 Corporate Centers 560 new corporate customers Development of transactional banking offer INM business growth: Successful implementation of BPH DealingNet system offering Corporate Clients effective and easy access to treasury products & services via Internet Focus on rebuilding INM/ Treasury sales and implementation of new products for corporate and SME segments Introduction of business model for sales of financial market products and services in retail/ SME, corporate and financial institutions segments Page 6

7 Bank BPH Key Statistics as at end-june 2008 Key data Q08 2Q08 Branch Network Density by Voivodship Outlets Partner outlets Own ATMs* Employees (FTEs)** 3,172 3,422 3,666 Retails Clients, including ( 000): Private Individuals Small Enterprises Corporate Clients*** Retail banking cards, including ( 000): Credit cards**** Debit cards Charge cards Employment structure (FTEs) Outlets, incl.: - Front office - Back office - Management of outlets Credit Analyzes and Collection Centers Corporate Centers and Corporate Macro-regions Macroregions Head Office Brokerage Office House Savings and Loan Office 1,950 1, , Page 7 *Bank BPH customers have free of charge access to more than 3,500 ATMs (including 1,417 of EuroNet and all Pekao machines); **Without unpaid, maternity and child care leaves; ***Bank started to acquire Corporate Clients from 30 Nov i.e. immediately after spin-off; ****Active cards only

8 Legal Background Behind: Spin-off legally effective November 29, 2007 GE Money filing with KNF Financial settlement of spin-off finalized February 29, 2008 Completion of BPH285 migration to Pekao end of May, 2008 KNF approval for GE Money to take over Bank BPH June 6, 2008 Acquisition of Bank BPH by GE Money June 17, 2008 Ahead: Integration with GE Money Bank by mid-2009 Page 8

9 Executive summary Macroeconomic situation 2Qs08 financial results Appendices Loan book overview Business development Page 9

10 2008 GDP Growth Forecast Still Above 5% 9 0 GDP (%, y/y) 6,9 6,0 4,8 4,0 2,4 4,3 3,2 5,4 6,3 4,4 6,6 6,6 7,3 6,5 6,5 6,4 6,1 E2Q08 1Q08 4Q07 3Q07 2Q07 1Q07 4Q06 3Q06 2Q06 1Q06 4Q05 3Q05 2Q05 1Q05 4Q04 3Q04 2Q04 1Q04 5,5 7,75 0,5 Private consumption (%, y/y) 5,55,7 4,7 3,1 1,6 1,3 2,72,6 5,1 4,6 5,4 4,8 6,8 5,6 4,9 4,8 4,8 3,6 E2Q 1Q08 4Q07 3Q07 2Q07 1Q07 4Q06 3Q06 2Q06 1Q06 4Q05 3Q05 2Q05 1Q05 4Q04 3Q04 2Q04 1Q Investments (%, y/y) 8,6 4,84,95,3 6,4 3,9 1,2 10,18,5 15,1 17,3 16,0 23,8 19,0 16,6 15,2 16,7 15,7 E2Q 1Q08 4Q07 3Q07 2Q07 1Q07 4Q06 3Q06 2Q06 1Q06 4Q05 3Q05 2Q05 1Q05 4Q04 3Q04 2Q04 1Q04 Contribution to GDP growth perc. points (contribution to GDP growth) net exports inventories investments public consumption private consumption GDP -3 1Q04 3Q04 1Q05 3Q05 1Q06 3Q06 1Q07 3Q07 1Q08 Despite global economic slowdown, pace of economic growth in Poland will stay at 5.2% in 2008 (5.5% for 2Q08) Domestic demand: consumption and investments still driving economic expansion All figures reported as quarter average (unless stated otherwise) Page 10

11 Accelerating Inflation Inflation (%, y/y) and 1M WIBOR ,9% 6,5 5,6 4,7 4,6 4,3 4,1 4,1 3,6 1Q05 2Q05 2,3 1,6 1,1 19,6% 0,6 0,8 1,4 1,4 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 19,4% 13,6% 10,1% Inflation 1M WIBOR 6,2 5,6 5,2 4,8 4,1 4,1 4,3 4,1 4,3 3,5 2,1 2,4 2 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 NPL in commercial banks (share %)* 6,8% 4,9% Corporate and household loans (%y/y, quarterly averages) Corporate Household 38,8 38,3 37,8 37,3 34,8 40,2 24,2 29,5 31,6 25,6 16,1 21,5 23,1 23,7 20,3 25,0 25,0 20,1 19,2 12,1 4,3 15,3 1,3 4,0 8,6 1,7-0,5-4,5 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 Q307 Q407 1Q08 2Q Corporate and household deposits (%y/y, quarterly averages) 29,9 24,2 26,0 22,9 21,0 20,8 16,8 23,0 22,3 17,9 15,2 19,9 21,5 11,7 15,7 9,3 9,7 7,0 4,58,3 8,5 5,3 7,8 8,7 5,0 6,9 8,6 8,3 1Q05 2Q05 3Q05 Corporate 4Q05 1Q06 2Q06 3Q06 4Q06 Household 1Q07 2Q07 3Q07 4Q07 1Q08 CPI to reach its peak in 3Q08 and monetary policy tightening cycle close to end our expectations: interest rates to be hiked to 6.50% Corporate loans to continue to grow at ca. 25% in 2008, while household loans growth still around 35% Strong household deposits growth expected to continue 2Q08 */ according to NBP Page 11

12 Executive summary Macroeconomic situation 2Qs08 financial results Appendices Loan book overview Business development Page 12

13 Revenue Side 2Qs08 vs. 2Qs PLNm Total net revenue 86,9 2,9-40,8-1,1 95% 0,2% 1,1% 45,5% 41,3% Net income from investments ,8 2Qs07 Net interest income +12% Net F&C Trading result Net income from investments 450,7 2Qs08 45% -5% 53,3% 66,9% 2Qs07-0,1% 2Qs08 Trading result Net F&C Net interest income -8,1% 12% growth (or PLN 47.8m) of net revenue driven by 40% jump of net interest income mainly on higher loan and deposit base 2% increase of net F&C due to i.a. bigger number of banking accounts and cards transactions volumes Loss on trading result from hedging part of ISDA derivative transactions taken over after spin-off Net F&C coverage (%) 2Qs08 2Qs07 of general costs of remuneration costs All data consolidated and pro-forma 1Q07 (spin-off adjusted) unless stated otherwise Page 13

14 Cost Side 2Qs08 vs. 2Qs PLNm Costs (incl. depreciation) ,3 269,6 37,2 Page 14 14,5 0,7 2Qs07 Personnel Building maintenance & rents Other expenses 3,5 +46% or +14% without Cost allocation impact Depreciation 74,3 Allocation of costs* 392,8 2Qs08 Impairment charges ,0-17,0 Total costs up by 46% or 14% excl. positive impact of Costs allocation * recognized only until spin-off 49% growth in building maintenance and rents caused by i.a. new outlets opening and lease of HQ Higher by 24% personnel expense encompasses retention plans, bonuses, recruitment of 494 employees (vs. end-2007) 2Qs07 2Qs08 *referring to transactions between continued and discontinued operations defined by internal cost allocation system introduced in relation to spin-off

15 Assets Structure 2Qs08 vs. end-2007 PLNm Assets 0 13,027 12, % , net loans* trading assets dues from banks investments financial assets other Loans 100% 1% 1% 0% 9% 73% 62% 50% 26% 28% 0% Related Entity Corporate Private Individuals SME *Net loans and advances to customers Assets down by 6.9%: 15.8% jump in loans only partially compensated reduction of investment financial assets (-68.2%) accumulated as a short term post spin-off liquidity buffer Retail loans still dominating total loan portfolio Page 15

16 Liabilities Structure 2Qs08 vs. end-2007 PLNm Liabilities Deposits 100% 0% 8% deposits* dues to banks evidenced by certificates shareholders' equity other 50% 0% 73% 72% 27% 20% Corporate Private Individuals SME * Amounts owed to customers 61.9% slim down of dues to banks following i.a. closing of short term liquidity buffer Almost 20% (or PLN 1,135m) upturn in deposits Page 16

17 Executive summary Macroeconomic situation 2Qs08 financial results Appendices Loan book overview Business development Page 17

18 Loan Book Break-down by Segment And Currency end-june 2008 vs. end-2007 PI excl. Mtg 12% (vs. 14%) SME 28% (vs. 26%) 100% 0% 0,1% 1% 35% 33% 27% Residential mortgages 50% (vs. 59%) Corporate 9% (vs. 0%) 3% 3% 4% 62% 64% 68% Related Entity 1% (vs. 1%) 0% PLN EUR CHF USD Page 18 Loan portfolio for Bank BPH stand-alone = utilized loans + guarantees; PI Private Individuals; SME Enterprises with up to PLN 10m annual turnover (within Retail Division)

19 Impaired Loan Portfolio 12% Impaired loans (% of total loans) 11,2% 9,9% 8,9% 70% Provisions (% of impaired loans) 69,0% 68,5% 68,7% 68,7% 68,2% 67,7% 66,8% 66,9% 6% 5,2% 5,0% 4,5% 65% 65,1% 3,1% 3,1% 3,2% 0% Total PI SME % Total PI SME Loan portoflio for Bank BPH stand-alone Page 19

20 Loan Portfolio by Products end-june 2008 vs. end-2007 PI (excl. Mtg): PLN 0.9bn (vs. PLN 0.8bn) Cash Loan 61% (vs. 58%) Residential Mortgages: PLN 3.6bn (vs. PLN 3.6bn) Other 15% (vs. 15%) Real Estate Loan 54% (vs. 54%) Card 15% (vs. 17%) Personal Overdraft 21% (vs. 22%) Other 3% (vs. 3%) Constr. Loan 32% (vs. 31%) SME: PLN 2.0bn (vs. PLN 1.6bn) Investment Loan 30% (vs. 34%) Mortgage 14% (vs. 14%) Other 6% (vs. 6%) Corporate*: PLN 0.7bn (vs. PLN 0.06bn) Commercial Real Estate 7,0% Guarantees 10% Revolving loans 67% WCL* 25% (vs. 26%) Overdraft 26% (vs. 20%) Investment loan 16% Loan portoflio for Bank BPH stand-alone Page 20 *Including Organizational Related Party

21 Retail Business Development Total Sales PLNbn Retail loan volumes 6,4 6,5 6,1 5,7 +16% PLNbn Retail deposit volumes** Margins (%): Margins (%): ,8 6,6 6,0 5,1 +31% Q07* 4Q07 1Q08 2Q08 2Q07* 4Q07 1Q08 2Q08 Market shares (%): Market shares (%): Growth in cash loan sales of Pożyczka od Ręki (+26% y/y to PLN 0.48bn), while total cash loan portfolio up by 16% y/y to PLN 0.55bn Focus on structured investment products (SCD) as well as traditional deposits (negotiated deposits for PI and SME, new Lok@ta 14D for PI, new e-lokata 1M for SME, Intrata Plus) Page 21 *2Q07 post spin-off pro-forma **including SCD (in Bank BPH B/S)

22 Number of Retail Customers per Products as at end-june PI 629 SME 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 Page 22

23 Retail Business Development Investment Products PLNbn BPH TFI assets 9,0 8,0 7,0 6,0 5,0 4,0 3,0 2,0 1,0 8,3 6,5 5,0-50.4% 4,1 0,0 2Q07* 4Q07 1Q08 2Q08 BPH TFI assets down by PLN 4.2bn vs. June 07 due to global slump on equity markets BPH TFI market share of 4.2% BPH FIZ Sektora Nieruchomości m PLN collected in 2Q2008 Five issues of structured deposits (PLN 0.34bn sales): Top Dywidenda 2 (July 07), Lokata Indeks Plus (Sept. 07), Lokata Stabilne Akcje (Oct.-Nov. 07), Lokata na Bank (Feb-Mar. 08), Lokata Top Profit (April May 08) Page 23

24 Retail Business Development RORs and Term Deposits (new customers acquisition) ROR accounts for PI % 300 2Q07* 4Q07 1Q08 2Q08 ca. 2.5% market share Growth of ROR packages: ths y/y 56% share of color** packages (+4.2 pp. y/y) New 14D better price offer for negotiated deposits and Intrata Plus Growth of PI deposit volume (+35% y/y) Page 24 * 2Q07 post spin-off pro-forma ** Silver, Gold, Sez@m Max, Private Banking

25 Retail Business Development Credit Cards & Alternative Distribution Channels 000 Credit cards* % Q07 1Q08 2Q08 PLNm Credit cards transaction volume Qs07* +9% 258 2Qs08 SME and PI (in 000) 2Q07* 4Q07 1Q08 2Q08 Internet banking Call center** % +92% New services joint with banking cards: Credit cards - installments Debit cards - cashback Page 25 *Active cards only **incl. transactional services

26 Retail Business Development Harmonium & Quick Loans for SME 000 Harmonium packages % 0 Page 26 2Q07* 4Q07 1Q08 2Q08 More than 83% of SME customers using Harmonium packages New e-harmonium package launched cheapest on the market Deposit base enhanced (+17% y/y) Growth of loans for SME: 32% y/y (to PLN 2.02bn) *2Q07 post spin-off pro-forma

27 Retail Business Development Mortgage Lending 3 Residential Mortgages PLN share +9% 3,65 3,65 3,34 46,9% 41,1% 32,6% 2Q' Q08 Market shares (%): Total: PLN: PLNbn % 50% 0% As at Total PLN FX Av. maturity* 19.6 years 17.8 years 21.2 years Av. amount** (in PLN 000) Av. LTV*** 42% 52% 33% NPL 2.2% 2.3% 2.1% Portfolio growth dynamics (June 08/ June 07) 9% 57% -14% *contractual maturity; **loans granted in 2Q2008 with only small portion of FX loans; ***current LTV adjusted to mortgage collaterals revaluation Sale of mortgage loans up by 9% in 2Q08 vs. 1Q08 Financial Results for 2Qs 08 Page 27 (2Q07 post spin-off pro-forma)

28 Corporate Banking Strategic Milestones Re-establishing of sales network (Corporate Centers) throughout the country: 8 Centers already established, three more to be opened before year-end (11 Centers to be operating by end-2008 vs. 10 originally planned) Human capital and resources being restored Pre spin-off product and services fully restored practically all products already in the offer Customer portfolio rapidly growing 560 new corporate customers serviced at end-2q (revised end-year target of 1,250 customers) Volumes (in PLNm) Loans Deposits June 30, Q 08 average Page 28

29 Transactional Banking Cash Management BusinessNet in April 2008, Bank BPH introduced new service called DealingNet. This unique, internet based, trading platform is offering online access to product and services offered by the Treasury Division. New service should allow to maintain market leader position in the fast growing segment of customers being in export/ import business Corporate Customers Service Bank BPH BusinessLine is servicing over 600 clients Increase in the sale of BusinessNet customers acquired by end-june 2008 BusinessNet (monthly average IV-VI VI 2008) Electronic Banking IV V VI Page 29

30 INM Business Development Sales margin from Treasury products for Corporate & Retail Segments* from continuing operations 100% 2Q' % 352% 2Q'08 */ results from sales of Treasury products and custody services generated by INM Division are presented entirely in the results of Retail and Corporate segments 25% y/y growth of sales of Structured Investment Products for Retail Clients in 2Q % y/y growth of net income from sales of treasury products (incl. fixed income) by INM Division for Retail/ SME, Corporate and Financial Institutions Clients in 2Q 08 from continuing operations Successful implementation of BPH DealingNet system offering Corporate Clients effective and easy access to treasury products & services via Internet Focus on rebuilding INM/ Treasury Sales activities and implementation of new products for Corporate and SME Clients Segments Advanced new Business Model for sales of financial market products and services of INM in Retail/ SME, Corporate and Financial Institution Segments PLN 143m of Structured Investment Products Originated January-June 2008 Page 30