Poland. First Quarter April 29, 2014

Transcription

1 1 Poland First Quarter 2014 April 29, 2014

2 Disclaimer 2 Bank Zachodni WBK S.A. ("BZ WBK") cautions that this presentation contains forward-looking statements. These forward-looking statements are found in various places throughout this presentation and include, without limitation, statements concerning our future business development and economic performance. While these forward-looking statements represent our judgment and future expectations concerning the development of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to: (1) general market, macro-economic, governmental and regulatory trends; (2) movements in local and international securities markets, currency exchange rates and interest rates; (3) competitive pressures; (4) technological developments; and (5) changes in the financial position or credit worthiness of our customers, obligors and counterparties. The risk factors that we have indicated in our past and future filings and reports could adversely affect our business and financial performance. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. Forward-looking statements speak only as of the date on which they are made and are based on the knowledge, information available and views taken on the date on which they are made; such knowledge, information and views may change at any time. BZ WBK does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. The information contained in this presentation is subject to, and must be read in conjunction with, all other publicly available information, including, where relevant any fuller disclosure document published by BZ WBK. Any person at any time acquiring securities must do so only on the basis of such person's own judgment as to the merits or the suitability of the securities for its purpose and only on such information as is contained in such public information having taken all such professional or other advice as it considers necessary or appropriate in the circumstances and not in reliance on the information contained in the presentation. In making this presentation available, BZ WBK gives no advice and makes no recommendation to buy, sell or otherwise deal in shares in BZ WBK or in any other securities or investments whatsoever. Neither this presentation nor any of the information contained therein constitutes an offer to sell or the solicitation of an offer to buy any securities. Note: Statements as to historical performance or financial accretion are not intended to mean that future performance, share price or future earnings (including earnings per share) for any period will necessarily match or exceed those of any prior year. Nothing in this presentation should be construed as a profit forecast. Note: The results information contained in this presentation has been prepared according to Spanish accounting criteria and regulation in a manner applicable to all subsidiaries of the Santander Group and as a result it may differ from the one disclosed locally by Bank Zachodni WBK S.A.

3 Agenda 3 Macro-economic environment and financial system Strategy and business Results Appendix

4 Macro-economic environment 4 Economic growth accelerating, inflation still low Annual GDP Growth (%, real) Interest Rates (%, end year) (e) 2015 (e) 2016 (e) (e) 2015 (e) 2016 (e) Annual CPI inflation rate (%, annual average) EUR / PLN exchange rate (annual average) (e) 2015 (e) 2016 (e) (e) 2015 (e) 2016 (e) Source: The National Bank of Poland, Central Statistical Office and estimates by Santander Research (1 April 2014)

5 Macro-economic environment 5 External demand and domestic demand both gaining strength Consumption, wage & employment growth Consumption growth Real wage growth Employment growth (e) 2015 (e) 2016 (e) Unemployment rate (ILO 1 definition, end year) (e) 2015 (e) 2016 (e) Export / Import growth Export of goods Import of goods (e) 2015 (e) 2016 (e) Balance of payments (% of GDP) Current account balance Trade balance (e) 2015 (e) 2016 (e) Source: The National Bank of Poland, Central Statistical Office and estimates by Santander Research (1 April 2014); 1ILO: International Labour Organisation

6 Financial system: Loan and deposit growth 6 Financial system with stable growth trends PLNbn Total loans Loan growth accelerated in 1Q14, mainly due to pickup in consumption and investment loans YoY (%) 3.4% 3.3% 3.7% 3.6% 4.2% Loans are forecast to grow by 4% - 5% in 2014 Mar.13 Jun.13 Sep.13 Dec.13 Feb.14 YoY (%) Total deposits % 6.5% 6.0% 6.0% 4.7% Mar.13 Jun.13 Sep.13 Dec.13 Feb.14 Annual deposit growth slowed moderately at the start of 2014 Customers moving from deposits to mutual funds to lower interest rate environment Deposits are forecast to grow by 6% - 7% in 2014 due to higher household revenues and corporate profits Source: The National Bank of Poland

7 Agenda 7 Macro-economic environment and financial system Strategy and business Results Appendix

8 Our Franchise Bank Zachodni WBK: The number 3 bank in Poland 8 Zachodnio- Pomorskie Szczecin Lubuskie 9 BZ WBK Branches 56 Poznań Pomorskie 43 Kujawsko- Pomorskie Łódź Wielkopolskie BZ WBK as at Total 830 Gdańsk Warmińsko- Mazurskie Mazowieckie Podlaskie Wroclaw 26 4 Dolnośląskie Łódzkie Opolskie 15 8 Lubelskie Częstochowa 23 1 Świętokrzyskie Śląskie Kraków Podkarpackie 58 7 Małopolskie BZ WBK Partner as at Total Warsaw 20 2 Lublin EUR Mar 14 Var. YoY Business and Results Loans 17.7 bn. 3% Deposits 19.2 bn. 4% Total customer funds 22.0 bn. 5% Consolidated Profit 115 mn. 28% Attributable Profit 85 mn. 21% Network and Customers Clients 4.3 mn Branches 830 ATMs 1,387 Market Share Mar 14 Loans 7.39% -0,06 p.p. Deposits 8.31% -0,33 p.p. BZ WBK Branches as at Market share as of month February 2014

9 Commercial focus / strategy 9 Total deposits Active deposit growth Current & Savings A/C s +7.8% YoY Business deposits +6% QoQ Customer numbers increasing M'13 D'13 M'14 Improving loan mix Gross loans Total loans increased by 3% YoY and 4% QoQ Growth driven by business loans M'13 D'13 M'14 LTD ratio Strong liquidity 91% 88% 89% Strong liquidity position secures future growth possibilities M'13 D'13 M'14

10 Commercial focus / strategy 10 Cash loans (gross) Cash loans Cash loan sales +9% YoY and 6% QoQ M'13 D'13 M'14 Mortgage loans Mortgage loans (gross) Mortgage sales +11% YoY and +6% QoQ Focus on profitability M'13 D'13 M'14 SME (gross) SME loans Highest ever SME sales volumes in March M'13 D'13 M'14 Note: EUR bn.

11 Loan performance 11 Total Loan portfolio + 3% YoY Constant EUR billion* Total loans 2.9% 3.6% M'13 J'13 S'13 D'13 M'14 Mar 14 YoY (%) QoQ (%) Individuals Mortgage Cash loans Other personal Companies SME Corporate Property GBM Other Business 0.4 n.m. n.m. Total % 4% * At average exchange rate as of March 2014

12 Total customer funds 12 Total customer funds +5% YoY Constant EUR billion* Total deposits 5.5% 2.1% Mar 14 YoY (%) QoQ (%) Demand Saving Time Total FUM Total customer funds M'13 J'13 S'13 D'13 M'14 * At average exchange rate as of March 2014

13 Agenda 13 Macro-economic environment and financial system Strategy and business Results Appendix

14 Net Interest Income and Spreads 14 NII +16% YoY underscored by good management of spreads Constant EUR million* Loan spreads, % Net Interest Income Retail Banking Q13 2Q13 3Q13 4Q13 1Q14 Deposit spreads, % 1Q13 2Q13 3Q13 4Q13 1Q14 Net interest margin 1 (%) 3,26 3,40 3,59 3,54 3, Retail Banking Q13 2Q13 3Q13 4Q13 1Q14 At average exchange rate as of March 2014 (1) Local criteria, including SWAP points

15 Gross income 15 Gross income rose 7% YoYand 3% QoQ Constant EUR million* Gross income 1Q14 1Q13 YoY(%) QoQ(%) Net Interest Income Net Fees Subtotal Other Q13 2Q13 3Q13 4Q13 1Q14 Gross income (1) Other includes Gains (losses) on financial transactions and Other operating income * At average exchange rate as of March 2014

16 Operating expenses 16 Constant EUR million* Costs reflect integration process. Efficiency ratio improving Operating expenses 1Q14 1Q13 YoY(%) QoQ(%) General and admin. expenses Depreciation and amortization Operating expenses Q13 2Q13 3Q13 4Q13 1Q14 Efficiency ratio (with amortisations) 43.8% 49.5% -5.6 pp -1.1 pp Number of branches Number of employees 12,167 12, * At average exchange rate as of March 2014

17 Net operating income after loan-loss provisions (LLPs) 17 Lower cost of credit and NPL ratio Constant EUR million* LLPs and Cost of credit Cost of credit 1.22% 1.18% 1.09% 1.01% 0.98% 1Q14 1Q13 YoY(%) QoQ(%) Net Operating Income LLPs Net loan-loss provisions Q13 2Q13 3Q13 4Q13 1Q14 Net op. income after LLPs NPL ratio 7.35% 7.39% NPL Coverage ratio 65% 68% * At average exchange rate as of March 2014

18 Attributable profit 18 High double digit growth QoQ and YoY Constant EUR million* Attributable profit 1Q14 1Q13 YoY(%) QoQ(%) Profit before taxes Tax on profit Net income Attributable profit Q13 2Q13 3Q13 4Q13 1Q14 Effective tax rate 18.7% 19.4% * At average exchange rate as of March 2014

19 Conclusions 19 Market Environment & Financial System Economic growth accelerating fuelled by reviving domestic demand and investment activity. Inflation remains low making interest rate increases unlikely until the end of 2014 Demand for loans gradually accelerating, firms focused on investment credit Strategy & Business Business strategy is focused on gathering new customers through the larger branch network and increasing loans and related fee income from the Consumer, SME, Leasing, Factoring, Business & Corporate and GBM segments. Sales efforts supported by marketing campaign for new and existing products Integration ahead of schedule. Focus on boosting productivity in former Kredyt Bank branches and extracting synergies Close management of Net Interest Income in low interest rate environment Results Solid fee generation, increasing YoY Costs under tight control, Integration costs in line with merger assumptions Credit quality improving

20 Agenda 20 Macro-economic environment and financial system Strategy and business Results Appendix

21 Balance sheet 21 EUR million. Constant currency* Variation Amount % Loans and credits* ,1 Trading portfolio (w/o loans) ,4 Available-for-sale financial assets (34) (0,7) Due from credit institutions* ,2 Intangible assets and property and equipment (20) (8,1) Other assets ,7 Total assets/liabilities & shareholders' equity ,5 Customer deposits* ,5 Marketable debt securities* Subordinated debt (1) (0,3) Insurance liabilities Due to credit institutions* ,2 Other liabilities (72) (2,5) Shareholders' equity** ,3 Off-balance-sheet funds ,3 Mutual funds ,2 Pension funds Managed portfolios (25) (20,2) Customer funds under management ,4 * As of * Includes all stock of concept classified in the balance sheet ** Not including profit of the year

22 Income Statement EUR million. Constant currency* Variation 1Q 14 1Q 13 Amount % 22 Net interest income ,1 Net fees ,7 Gains (losses) on financial transactions (23) (67,3) Other operating income** ,6 Gross income ,9 Operating expenses (147) (155) 8 (5,3) General administrative expenses (135) (141) 6 (4,4) Personnel (77) (83) 6 (6,9) Other general administrative expenses (58) (58) 0 (0,8) Depreciation and amortisation (12) (14) 2 (14,7) Net operating income ,8 Net loan-loss provisions (43) (42) (1) 3,3 Other income (3) (5) 2 (44,3) Profit before taxes ,4 Tax on profit (27) (22) (5) 23,4 Profit from continuing operations ,4 Net profit from discontinued operations Consolidated profit ,4 Minority interests ,8 Attributable profit to the Group ,5 * As of exchange rate 1Q'14 ** Including dividends, income from equity-accounted method and other operating income/expenses * As of exchange rate 1Q'14 ** Including dividends, income from equity-accounted method and other operating income/expenses

23 Quarterly statements of income EUR million. Constant currency* 1Q 13 2Q 13 3Q 13 4Q 13 1Q Net interest income Net fees Gains (losses) on financial transactions Other operating income** (1) 6 Gross income Operating expenses (155) (142) (139) (159) (147) General administrative expenses (141) (128) (126) (146) (135) Personnel (83) (76) (75) (79) (77) Other general administrative expenses (58) (52) (50) (67) (58) Depreciation and amortisation (14) (14) (13) (13) (12) Net operating income Net loan-loss provisions (42) (52) (36) (39) (43) Other income (5) 6 (2) (4) (3) Profit before taxes Tax on profit (22) (27) (34) (25) (27) Profit from continuing operations Net profit from discontinued operations Consolidated profit Minority interests Attributable profit to the Group * As of exchange rate 1Q'14 ** Including dividends, income from equity-accounted method and other operating income/expenses * As of exchange rate 1Q'14 ** Including dividends, income from equity-accounted method and other operating income/expenses

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