Romania Riding the Convergence Wave by Steven van Groningen CEO Romania

Transcription

1 Romania Riding the Convergence Wave by Steven van Groningen CEO Romania Capital Markets Day, September 28 Slide 1 Inflation Increased in 27, But Under Control Real GDP Development 8.5% 7.9% Downward Inflation Trend Broken Real GDP Growth The GDP growth rate gained speed in Q2 on the back of acceleration of activity in all the sectors: services, industry, construction and agriculture. Net exports had also a lower negative contribution to the GDP growth rate following the acceleration of the exports and the deceleration of imports in the last months Disinflation trend since 2 broken in 27 as the RON (Romania Leu) started to depreciate and food prices increased Inflation should start to decline in 2nd half of 28, but the persistence of the aggregate demand excess (fuelled by the rapid increase in wages and credit) might slow down the disinflation process Source: Raiffeisen RESEARCH Capital Markets Day, September 28 Slide % 5% 14.1% CPI Development, End of Period 9.3% % 6. Investor Handbook Romania - Riding the Convergence Wave Page 53

2 Current Account Deficit Stabilized For the Moment Foreign trade deficit and current account deficit remained almost unchanged in last quarters when expressed as % of GDP FDI inflows amounted to 1.6 bn in April: coverage of current account deficit by FDI inflows stood at 66.5% in January-April 28 The risk remains that the current account deficit might increase Imports and Exports (% yoy) May/4 Nov /4 May/5 Nov /5 May/6 Nov /6 May/7 Nov /7 May/8 Exports (% yoy, 3 months moving average) Imports (% yoy, 3 months moving average) Exports, Imports and Trade Balance (Seas. Adjusted) Q1/21 Q1/22 Q1/23 Q1/24 Q1/25 Q1/26 Q1/27 Q1/28 Trade balance (% of GDP, right hand side) Exports (% of GDP, left hand side) Imports (% of GDP, left hand side) Source: National Institute of Statistics, Eurostat, Raiffeisen RESEARCH Capital Markets Day, September 28 Slide 3 Raiffeisen Number 3 in Increasingly Tough Market Market Share of Romanian Banks in 27 1 Market Share Development of Assets 2 Others; 25. CEC; 4. Volksbank; 4.9% Alpha bank; 4.9% UniCredit; 4.9% Banc Post (EFG Eurobank); 5.1% Raiffeisen Bank; 6.1% BCR; 24. BRD (SocGen); 15. Banca Transilvania; 5.3% 6, 5, 4, 3, 1, % 9.3% % Total Assets Externalised Assets Market Share Market Share Development of Loans 2 4, 9.7% 1.7% 1. 3, 7.1% 5. 1, Market Share Development of Deposits 2 6.9% 9.5% 1.5% 1.3% 1. Loans Externalised Loans Market Share Loans 1 Based on total assets. 2 Based on local books (not including externalised assets). Capital Markets Day, September 28 Slide 4 Investor Handbook Romania - Riding the Convergence Wave Page 54

3 Strongly Customer Focused Strategy Strategic Goal Consolidate position as one of the leading banks on the Romanian market while keeping a high profitability Segments Retail: expansion in all segments Corporate: focus on mid-market corporates for lending Treasury and Investment Banking: tap into large potential of Romanian market Products Distribution Provide universal banking products with increasing focus on more advanced products (asset management, insurance and investment banking) Large network due to the expansion of last few years Strengthen alternative distribution channels: internet banking, mobile phone banking, call center and direct sales agents Operations Controlled end-to-end processes for increased quality and efficiency High degree of centralization Capital Markets Day, September 28 Slide 5 Mid-Market Customers Offer Great Potential Focus on maximising share of wallet through institutionalized customer account planning 75% of volume growth by adding depth to existing relationships 25% of volume growth by new client acquisitions (especially in real estate, construction, trading and services) Market Share Development of Corporate Deposits Market Share Development of Corporate Loans 2,5 1, % 8.9% , 5 1 Loans Externalised Loans Market Share Loans % Mid-market segment is becoming the main driver for revenue increase at corporate division level Increase fee-based revenues from multinational and large local customers Capital Markets Day, September 28 Slide 6 Investor Handbook Romania - Riding the Convergence Wave Page 55

4 Retail Customers Offer Good Risk/Return Focus on high level of service standards Match product expertise and financial discipline of specialist single product companies (monoliners) Market Share Development of Retail Loans 1,6 15.1% 5.9% 11.1% 1,2 7.7% Loans Externalised Loans Market Share Retail Loans Market Share Development of Retail Deposits % % Introduction of affluent customer products Capture future growth of the insurance sector to further increase fee based revenues Capital Markets Day, September 28 Slide 7 FX Lending: A Racehorse Under Control Why does the market demand FX Lending? Euro is the de facto reference rate in real estate National bank regulations stimulate Euro lending Euro loans seen as cheaper by client Many believe the RON will appreciate over time Currency Structure of Retail Loans Development of Romanian RON vs Euro Jul/7 Aug/7 Sep/7 Okt/7 Nov/7 Dez/7 Jän/8 Feb/8 Mär/8 Apr/8 Mai/8 Jun/8 Risk Mitigation Factors for FX Loans +5% Avg. -5% LCY 49% FCY 51% FX lending is mainly collateralised i.e. for own home mortgages (not speculative buy-tolet) and has low loan to value ratios Mortgage loans have a long maturity and this mitigates the risk of higher repayments in the event of a devaluation Regular stress testing takes place Capital Markets Day, September 28 Slide 8 Investor Handbook Romania - Riding the Convergence Wave Page 56

5 Dynamic Branch Network Catch-Up After completing turnaround projects in 26 Raiffeisen kicked-off branch expansion Direct sales agents developing well, but the branch network still accounts for more than 9 of clients home bank relationship business Network Bank Branch Expansion in Romania (1) Population per Branch 1, 8, 6, 4, Austria Germany Switzerland Netherlands Belgium Finland Sweden Denmark Italy Spain Portugal Ireland Turkey Russia Hungary Czech Slovakia Poland Croatia Serbia Kososvo B&H Romania/26 Romania/27 Source: McKinsey & Co., based on 26 country data 3/6/28 Urban concentration of branches is now near to the most developed EU countries 4 full time employee units turn profitable in 6-7 months. Each branch costs 1-15, to establish Most rural areas are not banked. The state savings bank and post office are the only banks consistently represented in rural areas (1) Network bank only. Capital Markets Day, September 28 Slide 9 Country Financials I Revenues in Total Expenses in Cost/Income Ratio in % % /27 1-6/ /27 1-6/ /27 1-6/28 Risk/Earnings Ratio Profit Before Tax in ROE before tax* 2 15% % /27 1-6/ /27 1-6/ /27 1-6/28 * Based on NWB figures. Capital Markets Day, September 28 Slide 1 Investor Handbook Romania - Riding the Convergence Wave Page 57

6 Country Financials II Total Assets in Loans to Customers in Deposits from Customers in 5,63 5,83 3,532 4,188 3,538 3,47 31/12/27 3/6/28 31/12/27 3/6/28 31/12/27 3/6/28 Number of Employees Number of Branches Number of Customers 5,948 6, ,168,26 2,136,271 31/12/27 3/6/28 31/12/27 3/6/28 31/12/27 3/6/28 Capital Markets Day, September 28 Slide 11 Raiffeisen Bank S.A. Romania - Management Team Steven van Groningen, CEO Successfully managed the turn around of the former state owned bank into Raiffeisen Bank S.A. Romania, the third largest Romanian bank Vice-President of the Romanian Association of Banks Has over 22 years of experience in reputed international banks Marinel Burduja, First Vice-President, Corporate Banking Under his management, Raiffeisen Bank became the Best Bank for Corporations in Romania (27) Senior Member of the Romanian Banking Institute Has over 3 years of experience working in/with top Romanian banks and companies James D. Stewart, Jr., Vice- President Treasury & Capital Markets Under his management Raiffeisen intermediated the largest IPO on the Romanian market, Transgaz SA Has over 3 years of experience in treasury and capital markets in US, Asia and CEE Member of New York Futures Exchange Razvan Munteanu, Vice-President, Retail Banking Runs the consumer and SME business Manages a complex mix of products (from sales finance to investments, including full range of SME financing products) Has over 1 years of experience in managerial positions in reputed banks and companies Carl Rossey, Vice-President, Operations and IT Successfully manages Raiffeisen Bank s Operations and IT Division He is an expert in managing banking redesign and development processes in CEE Has over 23 years of experience in consultancy and banking Vladimir Kalinov, Vice- President, Risks In charge with developing risk policies and monitoring the risk activities of the Bank Coordinates all activities related to Basel II implementation Has over 13 years of experience in banking lending and risk activities, all spent as member of the Raiffeisen team Capital Markets Day, September 28 Slide 12 Investor Handbook Romania - Riding the Convergence Wave Page 58