3Q 2006 results. Warsaw, 9 November 2006

Transcription

1 2006 Warsaw, 9

2 Information for investors Some statements contained in this press release represent future predictions and forecasts. Such statements are based on the current views and assumptions of the Management Board and they incorporate known and unknown types of risk and some degree of uncertainty. The actual results. achievements and occurrences may considerably vary from the data presented in these statements due to such elements as: (I) the general economic conditions. (II) the FM results (III). the frequency and severity of insured loss cases. (IV) the level and trends of the mortality and incidence rate. (V) the duration of specific conditions. (VI) the interest rates. (VII) the FX rates. (VIII) general competitive factors. (IX) amendments to laws and regulations. and (X) changes in the policy of the government and/or statutory authorities. ING Bank Śląski shall not assume the obligation of updating any items of information being speculations as to the future. presented herein. 1

3 Contents 1. Introduction to financial results and market position 2. Major achievements of business lines 3. Financials results after 3 quarters

4 1. Introduction to financial results and market position 3

5 Strategic targets of ING Bank Śląski STRATEGY: STRENGHTEN THE POSITION ON THE MARKET CREATE LONG-TERM ADDED VALUE Retail Banking Corporate Banking Financial Markets Lending turnaround High culture in terms of risk management, taking into account business targets Introduction of new rules for credit scoring Strengthening of market position - active acquisition of clients Multi-channel distribution system and development of franchise network Effective cross-selling and acquisition of customers Improvement of credit process and policy (products, scoring) Improvement of Asset Based Lending Internet banking Optimize business model for midsized customers Process automation, reduction of manual workload Wider penetration of existing customer base and acquisition of new customers Competitive products Efficient system support (implementation of new systems and optimization of existing systems) 4

6 ING Bank Śląski results after 3Q increase of core values PLN million 3Q Q 2006 change Net interest income 512,8 690,9 + 34,7% Net commission income 386,4 461,3 + 19,4% Result on core activity 1 246, ,2 + 6,4% Gross profit 523,7 600,0 + 14,6% Net profit * 418,2 488,9 + 16,9% Total assets and liabilities ,6% Equity ,7% ROA (%) 1,3% 1,4% + 7,7% ROE (%) 18,2% 21,1% + 15,9% Profitability ratio ** (%) 29,3% 34,3% + 17,1% Earnings per 1 ordinary share 32,14 37, ,9% * Net profit assigned to shareholders of the holding company ** Profitability ratio gross profit to total costs 5

7 ING Bank Śląski market position - strong position on the household deposit market and improved position on the corporate client market Bank Households loans - volume (PLN million) market Bank Corporate loans - volume (PLN million) market ,87 2,55 2,47 2,22 2,34 2,12 2,05 1, ,34 5,47 5,51 5,30 5,09 5,40 5,48 5, XII I II III IV V VI VII VIII IX X XI XII I II III IV V VI VII VIII IX XII I II III IV V VI VII VIII IX X XI XII I II III IV V VI VII VIII IX ING Bank Śląski Market ING Bank Śląski Market Bank Households deposits - volume (PLN million) market Bank Corporate deposits - volume (PLN million) market ,19 7,39 8,10 8,10 8,52 8,67 8,79 8, , ,82 7,77 8,25 8,09 8,22 7,70 7, XII I II III IV V VI VII VIII IX X XI XII I II III IV V VI VII VIII IX XII I II III IV V VI VII VIII IX X XI XII I II III IV V VI VII VIII IX ING Bank Śląski Market ING Bank Śląski Market 6

8 Success of the strategy Increase of funds from retail customers: Bank 24,000 Households deposits - volume (PLN million) market 260,000 22, ,000 20,000 18,000 16,000 14,000 12,000 Bank ,67 8,96 8,49 XII I II III IV V VI VII VIII IX X XI XII I II III IV V VI VII VIII ,82 2, ING Bank Śląski Investment funds net assets (PLN million) 2,97 4,06 3,72 4,12 4,21 Market 5,70 XII I II III IV V VI VII VIII IX X XI XII I II III IV V VI VII VIII IX ING Bank Śląski - sale Market 180, , ,000 market Bank ,52 Households deposits and investment funds net assets (PLN million) 6,65 7,22 7,31 7,49 7,57 7,64 7,80 XII I II III IV V VI VII VIII IX X XI XII I II III IV V VI VII VIII IX ING Bank Śląski Market market

9 2. Major achievements of business lines 8

10 Retail Banking - visible effects of sale support activities Total value of funds entrusted increased by almost PLN 5.4 billion (+26%) of which PLN 2.6 billion was placed in investment funds. Growing number of active retail customers: increase of active savings accounts in PLN by almost 230 thousands and increased number of current accounts by 66 thousands. Main achievements: A record-breaking quarter in the sale of investment funds certificates during the year the portfolio was doubled to the amount of PLN 4.7 billion. Mortgages volumes in PLN by 86% y/y. During the year sale of new loans was doubled in comparison with the same period of 2005 (increase from PLN 210 mio to 565 mio). Increased number of credit cards by 24% y/y. Growth of Private Banking assets under management by 81% - almost 6.4 billion of assets at the end of September Increase of lending portfolio in small business by 180% (PLN 125 million) in comparison with adequate period of 2005 and increase of small business deposits by 29% (almost PLN 500 million). Awards: ING Bank Śląski recognized by Forbes as the best bank for individuals. Second position in Newsweek ranking Friendly bank. 3 awards (2 silver and 1 bronze) in country-wide EFFIE contest one of the most important marketing contests. Promotion of ING TFI from 9 th place to 2 nd in the ranking of Rzeczpospolita and Analizy OnLine for the best TFI. ING Securities the best brokerage house in the Ranking of Brokerage Houses published by Forbes. 9

11 Retail Banking - acquisition of funds from retail customers Portfolio of funds acquired from retail clients: Change / : (PLN million) 30,000 25,000 20,000 16, ,000 1,942 1,064 18, , % 20,715 19, ,323 2,130 4,902 4,705 22, ,238 4,378 23, ,947 4,194 24, ,181 4,175 26, ,993 4,721 3, % +345% +20% +122% -16% 10,000 6,682 5,717 5, ,775 13, ,110 14, ,208 11,248 8,681 6, q Q Q Q Q Q Q 2006 Others Saving Accounts Term deposits TFI Assets Current A cco unts ILT/ILU + 25% + 3% 10

12 Retail banking - 1 milllion saving accounts in PLN by the end of 2006 Deposits of households and small business: Saving accounts in PLN volume (PLN million): +26% Number of savings accounts in PLN (in thousands): +35% 9,915 12, Q Q Q Q 2006 Expansion in deposit segment: Number of active retail customers increased during the year by about 140 tho. Bank reported the increase of current accounts by over 66 tho, of which 50 tho represent accounts of individuals. Number of active saving accounts in PLN increased from 654 thousand in September 2005 to 884 tho at the end of September 2006 (by 230 tho, 35%). Total number of savings accounts reached the level of 994 tho. In reaction for the increase of market interest rates ING Bank Slaski increased interest on term deposits with fixed interest rate and saving accounts in PLN. Bank is going to reach the level of 1 million savings accounts in PLN by the end of HIGH POSITION IN RANKINGS : ING Bank Śląski was recognized by Forbes as the best bank for individuals. At the same time won 2 nd position in Newsweek ranking friendly bank. 11

13 Retail Banking - record sales of investment funds certificates TFI assets distributed by ING BSK Group: (PLN million) +200% +344% , ,539 4,721 Increase of investment funds assets distributed by ING Bank Śląski Group by PLN 2.5 billion during 3 quarters of 2006 (during adequate period of previous year by PLN 1 billion). Growth of assets of the ING Parasol SFIO to over PLN 2 billion within only 3 months after launching. ING FIO Stabilnego Wzrostu fund was ranked as the best among moderate growth funds (in the ranking of Rzeczpospolita and Analizy OnLine) Q Q Q Q Q Q Q ING Parasol assets in the period of VI-IX 2006 : (PLN million) ING TFI on the 2 nd place in the ranking of Rzeczpospolita and Analizy OnLine for the best TFI. In the ranking of quality including (among others) innovation and easy access to the offer ING TFI was ranked on the 1 st place, achieving all points achievable. 2,200 2,000 1,800 1,600 1,400 1,200 1, /21/2006 7/5/2006 7/19/2006 8/2/2006 8/16/2006 8/30/2006 9/13/2006 9/27/

14 Retail Banking - maintaining the high growth rate of mortgages in PLN Exposure in PLN-mortgage loans exceeded PLN 1 billion at the end of September 2006, up by 86% (+ PLN 476 million) on a year-to-year basis. Record-breaking growth of sales: Marketing campaign: Zero commission on mortgage loans. By 30 September 2006, more than 5.5 tho loans were granted (more than 2x higher than in adequate period of 2005) During 3 quarters of 2006 PLN-mortgages volume increased by PLN 374 million, compared with PLN 96 million year ago. Mortgages in PLN in retail segment (including loans secured by mortgages) in PLN million : x % 155 1, M M Q Q Q Q Q Q Q Value of new loans granted PLN million 13

15 Retail Banking - credit cards important element of transactional offer ING Bank Śląski among the biggest banking cards issuers on the market: Number of credit cards increased from tho cards in September 2005 to thousand at the end of September 2006 (+24%). Growth of the value of limits granted from PLN million to PLN million (+33%) followed by the growth of limit utilization by 68%. Implementation of the automated repayment of credit card debt in the form of direct debit. Credit cards as important element of the bank s offer: Number of credit cards issued (in thousands): +200% Limit utilization (PLN million): +24% +68% Gazeta Wyborcza daily and Expander Independent Financial Advisers rated the Orange VISA credit card of ING Bank Śląski as worth to have in your wallet. and the Gold Visa Credit Card of ING Bank Śląski as the best prestige credit card for individuals with monthly income of more than PLN Q Q Q Q

16 Retail Banking - Private Banking: Just Use Your Common Sense It s Worth Banking With Us Private Banking in numbers: 30 Private Banking Centers all over Poland Nearly 170 Private Banking advisors Over 22.5 tho customers Almost PLN 6.4 bn assets under management The offer tailored to suit individual needs: Structured products (ILT. ILU) Investment Funds of ING and Union Investment Fund plus deposit Capital market products offered by ING Securities All other products from the offer for individuals Private Banking assets under management: (PLN million) +164% , , IQ 2005 IIQ 2005 IIIQ 2005 IVQ 2005 IQ 2006 IIQ 2006 IIIQ

17 Retail Banking - visible growth in small business segment Increased activity in small business segment: Dynamic growth of lending portfolio in small business segment reported from the beginning of 2006 During 3 quarters of 2006 lending volume in segment increased by PLN million, what represents increase by 180% in comparison with the adequate period of 2005 Increased volumes on current accounts and deposits by almost PLN 500 million (+29%) y/y Total volume of loans to small business clients : Volume of small business deposits: (PLN million) % (PLN million) 1,460 1, , , , , ,004 2, ,040 2, , , IQ 2005 IIQ 2005 IIIQ 2005 IVQ 2005 IQ 2006 IIQ 2006 IIIQ IQ 2005 IIQ 2005 IIIQ 2005 IVQ 2005 IQ 2006 IIQ 2006 IIIQ 2006 Current accounts Saving accounts Term deposits 16

18 Retail Banking - development of electronic distribution channels Growing number of transactions: Increased numbers of clients with access to Internet banking by 54% to tho Increased number of clients making transactions via SMS service by 71% to tho Monthly number of transactions made via electronic channels in September 2006 reached the level of 4 million 25% more than in September 2005 Number of retail clients having access to Internet banking : Number of clients with SMS service : (in thousand) % (in thousand) % Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q

19 Retail Banking - ING Securities the best in the opinion of investors! ING Securities in numbers: After 3 quarters of 2006 ING Securities reported gross result of PLN 47 million and net result of PLN 38 million (increase by 46% y/y). Number of accounts at the end of September 2006: 40 tho. ING Securities share in WSE turnover amounts to 10.8% what gives 4 th position among brokerage houses. Development of Internet services: Internet services of ING Securities belong to the best on the market. A great majority of transactions of individuals is done by the Internet: equity market 75%. futures market 89%. In the ranking of Forbes prepared with the cooperation of Individual Investors Association ING Securities was ranked as the best brokerage house in Poland. Particularly, ING Securities received the highest score among brokerage houses in the area of customer service. This is very important, because is base on the opinion of customers in the research made by the Association. This is the first ranking of brokerage houses in Poland, where investors evaluated services provided by brokers, describing satisfaction from the services and offer. 18

20 Corporate Banking - dynamic growth of lending portfolio Increase of corporate lending portfolio during the year by PLN 1.5 billion (+18%) Continued building of lending portfolio in big and mid-size customers segments. Main achievements: Active acquisition of new customers. During 3 quarters of 2006 Bank acquired 1093 customers from big and mid-size segments. High balances kept by corporate clients on current and deposit accounts. Increase of deposits portfolio during the year by PLN 863 million (+8%) Increased revenues from the sale of Financial Markets products in big and mid-size customers segments. Distribution through corporate branches network. Biggest transactions: Power-supply industry: structured finance for BOT Elektrownia Bełchatów (EUR 879 million) Telecommunication: 5-year revolving loan for Polkomtel S.A. (PLN 1.6 billion) 19

21 Corporate Banking - increased number of acquired customers in big and mid-size corporate segments New corporate customers ING Bank acquired corporate clients during the first 3 quarters of 2006, of which 324 in the third quarter Number of new corporate network customers: +7% 1,024 1, Q Q Q M Q Q Q M

22 Corporate Banking - increase of lending portfolio Corporate loans in PLN million: Loans of big and mid-size custmers 8,537 8,558 8,406 Loans of strategic clients 8,205 7,994 8,696 8,959 9,696 4,434 4,392 4,504 4,067 3,904 4,516 4,517 4,963 3,972 4,145 4,054 4,139 4,091 4,180 4,442 4, Increase of corporate loans volume during the year by PLN 1.5 billion (+18%). Increase of loan volume in big and mid-size customers segment from PLN 4.1 billion at the end of September 2005 to PLN 4.7 billion at the end of 2006 (by almost PLN 594 million, +14%). In strategic clients segment loan volume increased by PLN 1 billion to the level of PLN 4.9 billion, while in the same period of 2005 the decrease of PLN 370 million was recorded. 21

23 Corporate Banking - increase of lending portfolio in big and mid-size customer segments Loan volume of big corporates (PLN million): 2,532 2,654 2,533 2,572 2,525 2,536 2,712 2,874 Dynamic growth of business 4Q Q Q Q Q Q Q Q 2006 Loan volume of mid-size customers (PLN million): 1,440 1,487 1,535 1,567 1,566 1,644 1,730 1,860 4Q Q Q Q Q Q Q Q

24 Corporate Banking - corporate clients keep high deposits volumes Corporate deposits in PLN million: Deposits of big and mid-size clients 10,890 11,682 11,546 Deposits of strategic clients 11,463 11,476 11,215 11,330 12,326 6,834 6,333 6,900 6,449 5,805 5,736 5,816 6,073 4,712 4,567 4,782 5,014 5,671 5,479 5,514 6, Increase of deposits volume by PLN 863 million during the year (+8%). Increase of volume in big and mid-size segments from PLN 5 billion at the end of September 2005 to PLN 6.3 billion at the end of September 2006 (plus PLN 1.2 billion, +25%). Corporate clients keep high balances on current and deposit accounts. 23

25 Corporate Banking - increase revenues in big and mid-size customers segments Revenues from the sale of FM products in big and mid-size customers segment: Structure of revenues from the sale of FM products in big and mid-size customers segment : PLN million +33% 43.6 Investments (13%) Derivatives & Structured Products 4% M M 2006 Forex transactions (83%) Continued growth of revenues in big and mid-size customers segment resulting from active sale of Financial Markets product through branches network. Increased sale of FM products in corporate branches network 24

26 Corporate Banking - the largest transactions in the power-supply and telecommunications sector Polkomtel S.A. 1.6 billion PLN 5-year revolving loan July 2006 BOT Elektrownia Bełchatów 879 million EUR Structured finance August 2006 Co-financing bank Co-financing bank A loan to finance the overall corporate objectives of the borrower The third largest syndicated loan extended to a Polish company in 2006 A contract to finance power-related investment projects signed together with other financial institutions The largest transaction in the power sector in Central and Eastern Europe 25

27 Corporate Banking - development of electronic banking Number of INGBankOnline transactions: Number of electronic transactions: (transactions in thousands) + 13% (pieces) + 16% 4,971 5,616 11,278 13,036 9M M M M 2006 Increased number of clients using Internet banking by 13% Gradual elimination of paper statements - 45% decrease of statements received in branches in comparison with September 2005 Increasing share of electronic payments to the level of 97% of total payments 26

28 4. Financial results 3Q

29 Banking sector in year continuation of positive trends from previous year Increased activeness of the banking sector in September 2006 the assets of the banking sector were 12.2% higher than a year earlier: - households maintaining a high growth rate of lending (the growth rate of housing loans does not seem to be visibly affected by Recommendation S); higher-than-in previous quarters growth rate of deposits in bank accounts - Institutional clients higher growth rate of lending in view of revival in terms of investment projects accompanied by continued high growth rate of funds in corporate accounts (courtesy of good financial standing of companies). Good financial results of the banking sector net profit after the first three quarters of 2006 totalled approximately PLN 8.4 billion compared with PLN 7.0 billion in the same period last year. % Share of problem receivables IQ IIQ 2005 IIIQ 2005 IV Q 2005 IQ 2006 IIQ 2006 IIIQ 2006 lost doubtful below standard Deposit growth rate (y/y) % Loan growth rate (y/y) % Household loans IQ 2005 IIIQ 2005 IQ 2006 IIIQ 2006 Households Corporates IQ 2005 IIIQ 2005 IQ 2006 IIIQ 2006 Households Corporates Others: 58% Housing 42% PLN 34% FX 66% 28

30 ING Bank Śląski results for 3 quarters balance sheet structure Balance sheet consolidated (net) Loans and other receivables (gross) structure: PLN million 3Q end of year 3Q 2006 Assets Total Cash and balances with the Central Bank Deposit accounts in other banks, loans and advances to other banks Financial assets at fair value through profit or loss Investment financial assets Loans and advances to customers Other assets and interperiod settlements Liabilities Total Liabilities due to the Central Bank and other banks Finsncial liabilities at fair value through profit or loss Liabilities due to customers Own equity Other liabilities and interperiod settlements Corporates 70% Deposit structure: Households 30% Own equity (excluding net profit of current year) Total assets ROA 1,3% 1,7% 1,4% ROE 18,2% 24,4% 21,1% Cost /Income ratio 64,6% 65,6% 66,5% Solvency ratio 15,50% 18,60% 15,52% Corporates 36% Households 64% 29

31 ING Bank Śląski revenues - retail banking as the main growth driver for the Bank In PLN million +18.3% +0.8% -16.8% Q Q Q Q Q Q 2006 Retail Banking: Increase of volumes and revenues from savings accounts Dynamic increase of investment funds distribution Increased revenues from activities in equity markets (brokerage services) Favourable valuation of 20% stake in the NN Pension Fund (NN PTE) Increase of revenues from the sale of FM products by 50% Corporate Banking: Stable revenues from deposits and loans Increase of lending portfolio not fully reflected in the increase of income Significant part of revenue generated from the sale of FM products Income on brokerage activity (capital markets and investment banking) up by 39% Proprietary trading: Lower income on proprietary funds due to drop of interest rates Drop of income from proprietary trading of Financial Markets 30

32 ING Bank Śląski expenses - costs go up as a result of restructuring the operational back-office area and providing more sales support In PLN milion +7.4% +11.4% +9.1% Q Q Q Q Q Q 2006 Personnel costs: The incentive system reflected good performance of the Bank Indexation of salaries Depreciation: Increase in amortisation/ depreciation due to the projects implemented at the Bank (mainly investment projects in the area of IT infrastructure in the Sales Network and Head Office; revisualization of branches) Other operating expenses: Sarbanes-Oxley Act compliance costs (SOX Project) Project of service quality improvements (Retail 2006, Corporate 2006) Consistent policy of supporting sales activities (marketing costs) 31

33 ING Bank Śląski results after 3Q increase of core measures PLN million 3Q Q 2006 change Result on banking activity 1, , % Gross profit % Net profit * % Total assets and liabilities 41,333 46, % Equity 3,478 3, % ROA (%) % * Net profit assigned to shareholders of the holding company Cost/income ratio (%): Solvency ratio (%): ROE (%): pp pp pp Q Q Q Q Q Q 2006

34 ING Bank Śląski results - segment reporting Income statement of ING Bank Śląski (analytical. consolidated): PLN milion 9M M M 2006 Difference 9M 2005 / 9M 2006 Retail banking % Corporate banking % Own operations % Proprietary trading % ALCO % Income total 1, , , % Operational expenses, including: % Personnel costs % Depreciation % Other operating expenses total % Result before risk costs % Risk costs % Result before tax % CIT % Minority interest x X Net profit assigned to shareholders of the holding company % 33

35 ING Bank Śląski results - year 2005 and 2006 in quarterly layout Quarterly Profit and Loss account of ING Bank Śląski (analytical. consolidated): PLN million IQ IIQ IIIQ IVQ IQ IIQ IIIQ Retail banking Corporate banking Own operations Proprietary trading ALCO Income total Operational expenses, including: Personnel costs Depreciation Other operating expenses total Result before risk costs Risk costs Result before tax CIT Minority interest Net profit assigned to shareholders of the holding company

36 Quality of lending portfolio - gradual decrease of provisioning volume Impairment write-offs in 3Q 2006: Q Q Q Q Q Q Q Impairment write-offs IBNR Provisions for off-balance sheet liabilities In PLN million Group total Balance-sheet exposure Impairment IBNR Provision Contingent liabilities IBNR provision Recovery of written-off receivables Retail operations Wholesale operations GRAND TOTAL