Idea Bank S.A. Group Results Q3 2016

Transcription

1 Idea Bank S.A. Group Results Q Presentation of the Management Board for Investors October 20, 2016

2 Q Fact Sheet In 3Q 2016 net profit from continued operations amounted to PLN 51.7m. 3Q2016 comapring to 2Q 2016 results (without GetBack results) in operating profit more than doubled. Significant increase in Group s interest margin - net interest income increased by 22% q/q and NIM achieved level of 4.1% in 3Q 2016 (3.9% for 3Q 2016 YTD) as a result of building a loan portfolio based on high-margin products and reducing the cost of financing. Dynamic acquisition of customers: in Q Bank acquired over 3.7k new credit customers, 2.3k new deposit customers and sold more than 12.5k current accounts (increased by 3.3%, 1.7% and 4.8% respectively in comparison to Q2 2016). It enabled to obtain market share of 15.1%. Implementation of stable policy of sales of loan products with focus on high-margin products nearly PLN 2bn of sold products with record value of financed invoices (increase from PLN 405m in 2Q 2016 to PLN 522m in 3Q 2016). After taking into account the results from 1H 2016 for capital requirements the Group shows a high and safe level of capital ratios: CAR 16,8%, Tier 1 13,8%. Main reorganizational changes were completed within the Group reaching the optimal structure which in subsequent periods will contribute to relatively stable operating costs while increasing revenue growth. 2

3 Agenda Summary of Idea Bank Group Q results Summary of financial data and key ratios Sales and customers volumes Analysis of Q financial results Structure of net income Structure of loans together with impairment losses and CoR Key regulatory indicators Key financial information relating to operating segments Attachments Income statement Idea Bank Group Balance sheet Idea Bank Group Sale of GetBack Leasing Groups integration 3

4 Summary of Income statement and key ratios PLN million 3Q 2016 YTD 3Q 2015 YTD** Change % 3Q Q 2016 Change q/q % Net Interest Income 441,3 255,1 73,0% 171,0 140,2 21,9% Net fee and commission Income 252,8 292,8-13,6% 93,4 74,1 26,1% Impairment losses -124,9-112,0 11,5% -38,6-35,8 8,0% General administrative costs, including: -409,3-360,6 13,5% -137,5-141,8-3,1% - bank tax *) -33, ,1-12,3 6,3% Net income 384,9 249,1 54,5% 47,1 276,7-83,0% PLN million ** Change % Receivables from clients , ,6 18,9% Liabilities to clients , ,4 10,4% Equity 2 411, ,0 18,3% Total assets , ,6 9,6% * bank tax is paid from ** adjusted data (includes correction of opening balance sheet amounting to PLN 17.7m concerning the income from bankassurance) Ratios *** 3Q 2016 YTD 3Q 2015 YTD** Change % 3Q Q 2016 Change q/q % NIM 3,9% 2,8% 1,1 p.p. 4,1% 3,8% 0,3 p.p. % share of Net F&C income in Total operating income 37,8% 51,1% -13,3 p.p. 37,1% 36,5% 0,6 p.p. C/I Group 61,2% 62,9% -1,7 p.p. 54,6% 69,9% -15,3 p.p. adjusted C/I Group*) 56,3% 62,9% -6,7 p.p. 49,4% 63,9% -14,4 p.p. CoR (excluding purchased receivables) 1,4% 1,5% -0,1 p.p. 1,3% 1,0% 0,2 p.p. ROAA 0,6% 1,3% -0,7 p.p. 1,0% 0,6% 0,5 p.p. adjusted ROAA *) 0,9% 1,3% -0,5 p.p. 1,3% 0,8% 0,5 p.p. ROAE 5,8% 13,2% -7,4 p.p. 8,7% 4,9% 3,7 p.p. adjusted ROAE *) 7,7% 13,2% -5,5 p.p. 10,8% 7,2% 3,7 p.p. L/D ratio (Group) 85,8% 85,1% 0,7 p.p. 85,8% 85,9% -0,1 p.p. NPL (90+ DPD) 8,4% 8,8% -0,4 p.p. 8,4% 8,0% 0,4 p.p. NPL coverage 51,6% 54,7% -3,1 p.p. 51,6% 55,5% -3,9 p.p. CAR (Bank) 14,0% 15,5% -1,5 p.p. 14,0% 13,7% 0,3 p.p. Tier 1 (Bank) 11,7% 14,7% -3 p.p. 11,7% 11,3% 0,4 p.p. CAR (Group) 16,8% 12,5% 4,3 p.p. 16,8% 14,4% 2,4 p.p. Tier 1 (Group) 13,8% 10,1% 3,7 p.p. 13,8% 11,1% 2,8 p.p. * 3Q 2016 YTD excludes cost of bank tax in the amount of PLN 33.0m. ** adjusted data (includes correction of opening balance sheet amounting to 17.7 mln PLN concerning the income from bancassurance) *** Ratios do not include profit on sale of GetBack S.A. and discontinued operations 4

5 Q Further growth of Bank and Group *based on value of financed invoices ** Including leasing purchased debt of Getin Leasing, Idea Leasing Romania and Getin Noble Bank Q was a subsequent quarter where both Bank and companies from the Group achieved an increase in the number of clients using the Group s product offer, in Q vs in Q (increase by 3.3% q/q) In Q Idea Bank had sales of credit products at the level of PLN 1.9bn a level that is lower than 2Q 2016 but is in line with the strategy adopoted by Idea Bank for the year 2016 i.e. building stable credit base. The increase in receivable factoring balance by 29% q/q reflects the rapid growth of Idea Money. Dynamic aquisition of current account holders by 21% y/y is a result of bank policy focusing on increase in number of transactional clients * Bank's own data and market data from NBP reports 5

6 Agenda Summary of Idea Bank Group Q results Summary of financial data and key ratios Sales and customers volumes Analysis of Q financial results Structure of net income Structure of loans together with impairment losses and CoR Key regulatory indicators Key financial information relating to operating segments Attachments Income statement Idea Bank Group Balance sheet Idea Bank Group Sale of GetBack Leasing Groups integration 6

7 The Group financial results Q PLN million *) 3Q 2016 YTD 3Q 2015 YTD** Change % 3Q Q 2016 Change q/q % Interest income 733,2 575,8 27% 271,5 235,9 15% Interest expenses -291,9-320,6-9% -100,6-95,7 5% Net interest income 441,3 255,1 73% 171,0 140,2 22% Net fee and commission income 252,8 292,8-14% 93,4 74,1 26% Result on the sale of subsidiary 249, ,0 249,2 - Net other operating income -41,8 27,3-253% -13,1-22,3-41% Impairment losses -124,9-112,0 11% -38,6-35,8 8% General administrative costs, including: -409,3-360,6 14% -137,5-141,8-3% - bank tax *) -33, ,1-12,3 6% Pre-tax profit (continuing operations) 367,3 102,6 258% 75,2 261,2-71% Income tax -21,5 55,2-139% -23,5 4,4-634% Net profit (continuing operations) 345,8 157,8 119% 51,7 265,6-81% Net profit (discontinued operations) ***) 39,1 91,3-57% -4,6 11,0-142% Total net profit 384,9 249,1 55% 47,1 276,7-83% * bank tax is paid from ** adjusted data (includes correction of opening balance sheet amounting to PLN 17.7m concerning the income from bankassurance) *** Debito and GetBack S.A. results occur in discontinued operations In 3Q 2016 YTD in the Group financial results the profit from the sale of GetBack S.A. in the amount of PLN 249.2m (gross) was included. In 3Q 2016 the Group continues efforts to further increase net interest income (by 73% y/y) by building a loan portfolio based on sales of high-margin products while heading to reduce the cost of financing. The Group results for Q YTD are charged from February with bank tax (PLN 13.1m paid in Q and PLN 33.0m paid in Q YTD). The Group is currently conducting an active sale of Debito securitization fund which is planned to be terminated by the end of the year. * includes: result on the sales of GetBack SA PLN 249.2m; others and adjustments PLN m, including intercompany adjustments PLN m 7

8 Dynamics of the Group Income and Costs Q is a subsequent quarter in which the Group noted growth in net interest income and NIM by 0,3 bps q/q, while maintaining high level of Compound Annual Growth Rate (CAGR) share of the interest income in total income at the level of 41%. Bank as well as the Group aim to build financial results in long-term perspective. IDEA HUB Group s operating expenses in Q were subject to an additional tax expense due to bank tax (PLN 13.1m). In 3Q 2016 operating expenses decreased by 3% compared to 2Q 2016 as a result of the cost control policy of the Bank and the Group. Kreatywna przestrzeń dla biznesu 8

9 Structure of Net fee and commission income Fee and commission income 3Q 2016 YTD 3Q 2015 YTD* Change % Q Q Change q/q % loan commissions 25,0 17,2 44,9% 8,4 9,3-9,7% intermediation in sale of: 145,8 266,2-45,2% 44,0 45,2-2,7% - insurance products 66,0 203,0-67,5% 11,6 16,4-29,3% - investment products 75,3 49,1 53,3% 31,0 27,8 11,4% - loans and other 4,5 14,0-68,1% 1,4 1,0 40,8% financial leasing 17,0 6,8 150,5% 4,2 6,9-38,7% accounting and consulting services 78,0 24,6 216,6% 31,1 24,2 28,4% factoring services 57,3 47,3 21,1% 22,9 19,0 20,6% other 28,8 19,0 51,8% 13,1 6,5 102,8% TOTAL 351,8 381,1-7,7% 123,8 111,1 11,4% * adjusted data (includes correction of opening balance sheet amounting to PLN 17.7m concerning the income from bankassurance) Comments: In 3Q 2016 the Group continued its efforts to increase and diversify sources of commission income in particular by an increase in income of its subsidiaries. Since January 2016, the Group implemented a conservative model of recognition of revenue from products sold together with loans. This resulted in a significant decrease in proportion of the income recognized in P&L at the moment of recognition of financial instrument in favour of revenues recognized with effective interest rate method during the life of loan products. Product profitability remained at a comparable level, however, deferred revenue will have positive impact on the net interest margin of the Group in the future. 9

10 Loan portfolio and credit risk Loan portfolio quality Balance sheet % share in loan portfolio Avg. LTV (%)4 3Q 2016 Avg. maturity (in months) NPL 1 ratio (%) NPL 1 coverage ratio (%) IRR NPL 1 ratio (%) 2Q 2016 NPL 1 coverage ratio (%) investment loans 27,5% 60,0% 114 9,2% 16,2% 8,2% 9,1% 14,8% working capital facilities 27,2% n/a ,3% 54,0% 14,9% 11,1% 64,8% car loans 2,0% 89,0% 59 8,2% 76,8% 6,3% 7,3% 67,1% leasing receivables 2 33,0% 90,0% 49 4,6% 77,6% 4,3% 4,6% 81,2% factoring receivables 0,0% 32,6% 2 8,7% 36,1% 22,6% 7,5% 35,2% Purchased debt 10,3% n/a n/a n/a n/a 3,3% n/a n/a Total 100,0% 76,7% 72 8,4% 51,6% - 8,0% 55,5% 1) according to DPD 90+, 2) including lease loans, 3) 41% of working capital facilities are secured by PLD guarantee (PLD guarantee covers up to 60% of loan exposure), 4) refers to secured loans only (collateral in the form of a mortgage on real estate, plegdes of movable property, securities transfer or assignment of contract) *DPD90+ according to outstanding capital balance *DPD90+ according to outstanding capital balance 10

11 Loan portfolio and credit risk (2) Top 10 borrowers 1 : Idea Bank Idea Leasing Idea Bank Group Top 10 borrow ers Exposure (PLNm) % Borrow er 1 6,2 0,08% Borrow er 2 5,4 0,07% Borrow er 3 3,5 0,05% Borrow er 4 3,4 0,05% Borrow er 5 2,9 0,04% Borrow er 6 2,9 0,04% Borrow er 7 2,8 0,04% Borrow er 8 2,7 0,04% Borrow er 9 2,7 0,04% Borrow er 10 2,6 0,03% Total 35,0 0,47% Total credit portfolio (Net loans) ,0% Top 10 borrow ers Exposure (PLNm) % Borrow er 1 7,3 0,16% Borrow er 2 7,0 0,15% Borrow er 3 6,9 0,15% Borrow er 4 6,7 0,15% Borrow er 5 6,5 0,14% Borrow er 6 6,2 0,14% Borrow er 7 6,1 0,13% Borrow er 8 6,1 0,13% Borrow er 9 5,5 0,12% Borrow er 10 5,4 0,12% Total 63,7 1,40% Total credit portfolio (Net loans) ,0% Top 10 borrow ers Exposure (PLNm) % Borrow er 1 7,3 0,06% Borrow er 2 7,0 0,06% Borrow er 3 6,9 0,06% Borrow er 4 6,7 0,06% Borrow er 5 6,5 0,05% Borrow er 6 6,2 0,05% Borrow er 7 6,2 0,05% Borrow er 8 6,1 0,05% Borrow er 9 6,1 0,05% Borrow er 10 5,5 0,05% Total 64,5 0,54% Total credit portfolio (Net loans) ,0% Diversified loan portfolio reflecting one-stop shop concept: Low concentration (avg. ticket of PLN 97k) and relatively short maturity Predominantly secured loans (c. 80%) No loans in foreign currencies Loans breakdown by collateral type By industry Idea Bank Idea Leasing Idea Bank Group Industry % % % Wholesale and retail trade 26.5% 46.2% 34,0% Transport 10.4% 12.5% 11,2% Manufacturing 9.5% 11.6% 10,3% Construction 12.3% 10.6% 11,7% Agriculture 0.9% 10.4% 4,5% Financial intermediation 4.1% 6.5% 5,0% Administration 2.9% 0.9% 2,1% Property management 2.9% 0.9% 2,1% Other 30.3% 0.5% 19,0% Source: company information 1.Excluding related parties 11

12 Idea Bank capital adequacy and liquidity Bank: Tier 1 capital ratio RWA Deposits structure by duration under 3 months 14,0% 18,7% 19,0% 3-6 months 41,3% 37,9% 25,8% 6-12 months 17,0% 16,9% 25,3% Over 1 year 27,7% 26,5% 29,8% Bank s and Group s ratios comparison Idea Bank* Capital adequacy Idea Bank Group* CAR 14,0% 16,5% TIER 1 11,7% 14,1% CAR 16,8% 14,9% TIER 1 13,8% 11,1% Idea Bank maintains capital adequacy ratios (CAR and Tier 1) at a level in line with regulatory requirements. On 19th of September Bank obtained an approval from the Financial Supervision Commission to include the result of 1H 2016 for the purpose of a capital adequacy, what resulted in strengthening the capital position at the end of September Constant reducing financing costs - margin over WIBOR rate offered by Bank decreased from 0.55% at the end of June 2016 to 0.42% at the end of September

13 STYCZEŃ LUTY MARZEC KWIECIEŃ MAJ CZERWIEC LIPIEC SIERPIEŃ WRZESIEŃ PAŹDZIERNIK LISTOPAD GRUDZIEŃ Miliony Leasing and factoring segments Sales Structure Portfolio value ROE = 19.2% ROA = 0.7% C/I = 52.2% Portfolio value: PLN 4,668m 9m2015 1% 1% 26% 25% 4% 9m2016 2% 2% 17% 27% % NII: PLN 40,0m (-16.2% vs 3Q 15) NPL ratio = 4.6% Net profit: PLN 29.9m 6% 41% 48% samochody osobowe samochody ciężarowe maszyny budowlane maszyny i urządzenia medycyna i technologie Inne Q'16 3Q'16 Leasing Pożyczka Number of clients Financed invoices 2016 vs 2015 ROE = 53.1% ROA = 5.9% NF&C: PLN 52.3m (+4.6% vs 3Q15) C/I = 38.5% NPL ratio = 8.7% Credit line granted 9M2016: PLN 522.0m Net Profit: PLN 20.3m Q Q Q Q 2016* Liczba klientów IM Liczba pozostałych klientów PZF * No data from Polish Factor Association na 3Q2016 Wartość sfinansowanych fv 2015 Wartość sfinansowanych fv 2016 Tax Care credit sales volume and accounting subscriptions ROE = 14.0% ROA = 8.2% Volume of credit sales 9M: 457m zł No. of accounting subscriptions: 19,331 NF&C: PLN 85.6m Revenues from the sale of accounting services: 25,3m Net result: PLN 11.7m 13

14 Agenda Summary of Idea Bank Group Q results Summary of financial data and key ratios Sales and customers volumes Analysis of Q financial results Structure of net income Structure of loans together with impairment losses and CoR Key regulatory indicators Key financial information relating to operating segments Attachments Income statement Idea Bank Group Balance sheet Idea Bank Group Sale of GetBack Leasing Groups integration 14

15 Attachment 1 - Income Statement - Idea Bank Group Both in the interim condensed consolidated financial statements and in this presentation the Idea Bank Group presented activities of the GetBack Group as well as the Debito Company in the income statement in discontinued operations. In addition, the company Debito was presented in the balance sheet in non-current assets held for sale and liabilities directly associated with assets classified as held for sale in accordance with International Financial Reporting Standards (unaudited) PLN thousand (unaudited) PLN thousand (unaudited restated) PLN thousand (unaudited restated) PLN thousand I. Interest income II. Interest expenses III. Net interest income IV. Fee and commission income V. Fee and commission expenses VI. Net fee and com m ission incom e VII. Dividend income VIII. Result on financial assets at fair value IX. Result on financial assets X. Foreign exchange result XI. Other operating income XII. Other operating expenses XIII. Net other operating income XIV. Impairment losses XV. General administrative costs XVI. Result from operating activity XVII. Share in profits (losses) of associates XVIII. Profit (loss) before incom e tax XIX. Income tax XX. Net profit (loss) from continuing operations XXI. Net profit (loss) from discontinued operations XXII. Net profit (loss) - total Attributable to shareholders of parent company continuing operations discontinued operations Attributable to non-controlling shareholders continuing operations discontinued operations

16 Attachment 2 - Balance Sheet - Idea Bank Group (restated data) ASSETS PLN thousand PLN thousand Cash and balances w ith Central Bank Receivables from banks and financial institutions Derivative hedging instruments Derivative financial instrument at fair value through profit or loss Financial assets at fair value through profit or loss Amounts due from clients: Finance lease receivables Other loans and receivables Available-for-sale financial assets Investments in associates Intangible assets Property, plant and equipment Investment property Fixed assets held for sale Income tax assets Current tax assets Deferred tax assets Other assets TOTAL ASSETS LIABILITIES AND EQUITY Liabilities Amounts due to other banks and financial institutions Derivative hedging instruments Derivative financial instruments measured at fair value through profit or loss Financial liabilities measured at fair value through profit or loss Amounts due to clients Debt securities in issue Corporate income tax liabilities Other liabilities Deferred tax liabilities Provisions Liabilities directly associated w ith assets classified as held for sale TOTAL LIABILITIES Equity (attributable to shareholders of parent com pany) Share capital Retained earnings Net profit (loss) Other capital Equity component of a disposal group classified as held for sale 0-61 Non-controlling interests 0 37 Total equity TOTAL LIABILITIES AND EQUITY

17 Attachment 3 - Sale of GetBack On the 15th of June 2016 the Group finalized the sales contract of GetBack S.A. according to the terms of the sale agreement assigned 15 March The basic parameters of the transaction are: Profit from the transaction 249,2 m Selling price 825,0 m The purchase price of GetBack S.A. 270,0 m GetBack net assets 251,1 m Return on investment 205% As a result of the transaction the Group made the deconsolidation of the company obtaining a significant return on investment: The impact on the consolidated financial data: Settlement of GetBack S.A. sale (w mln zł) Revenues from sales (+) 825,0 GetBack net assets (-) 251,1 Goodwill (-) 231,2 Profit on sales ( ) 348,7 The costs and price adjustments related to the transaction* 93,5 Gross profit on sales ( ) 249,2 *The costs and price adjustments relate to discount of the second installment of payment, costs related to the transaction and the deferral of revenue in relation to the agreement. The cost of the discount will be reversed in the income statement in subsequent periods A positive impact on gross profit +PLN 249,2m Decrease in the consolidated total assets following sale of GetBack assets by PLN 969,7m The growth of the Group s own funds by profit on sales in Q after obtaining approval of the UKNF Higher receivables resulted from second payment installment in the amount of PLN 310.0m 17

18 Attachment 4 - Leasing Groups integration The Idea Leasing and Getin Leasing integration process will lead to the formation of the largest leasing group in Poland, with a total synergy effect of PLN m. Market position after integration Benefits summary Establishing the largest leasing company in Poland The value of credit sales of integrated Groups in the first half of 2016 year [in bnpln] Complementary business models - Getin Leasing: cars, Idea Leasing: machinery, heavy transport and devices Introduction of a common policy toward suppliers (better terms of business, discounts etc.) More effective process management due to integration of the IT platforms, structures etc. 1,7 57% 43% 1,3 IL GL Significant cost and income synergies at PLN 6-11 mln annually and PLN mln altogether. total 3, m The value of the loan portfolio of integrated Groups [in bnpln] Annual income synergies 3 m 48% IL Anual cost synergies 3 8 m 4,9 52% 4,5 GL total 9,5 18

19 Disclaimer This presentation (hereinafter referred to as the Presentation ) was prepared by Idea Bank S.A. (hereinafter referred to as the Company ) solely for information purposes, and is intended for clients, investors, Company s shareholders and financial analysts. This Presentation shall not be, in any event, considered as an offer or recommendation to execute any transaction in any case. In particular this Presentation shall not be considered as a proposal to acquire securities, an offer, invitation or solicitation to make any offer to buy or subscribe for, to invest or to execute transaction regarding these securities or as a recommendation or advice to conclude any transaction, in particular involving the securities of the Company or any of its subsidiaries or any other securities in the United States of America or in any other jurisdiction. The information contained in this Presentation is based on publicly available and reliable sources, however the Company cannot guarantee that this information is full and complete.. The Company cannot be held liable for the consequences of any decisions based on any information included in this Presentation. The information contained in this Presentation have not been subject to independent verification and may at any time be a subject to change or modification. As a rule, the Company is not required to publicly update or modify information, data or statements contained in this Presentation in the event of change in the strategy or intentions of the Company or occurrence of unforeseen facts or circumstances which will have an impact on the strategy or intentions of the Company, unless such an obligation is stipulated by law. The information contained in this Presentation may not be, in any case, interpreted as a forecast or as an express or implied statement or assurance made by the Company or persons acting on its behalf. Furthermore, neither the Company nor persons acting on its behalf may be held liable, in any way whatsoever, for any loss or damage that may arise in connection with use of this Presentation or any content of this Presentation or that may arise in any other way in connection with the information contained in this Presentation or on any other basis related to this Presentation. The publication by the Company of the figures contained in this Presentation is not a breach of the regulations applicable to companies which shares are traded on a regulated market, in particular on a regulated market maintained by the Warsaw Stock Exchange in Warsaw. The information provided in this Presentation has already been disclosed in current or periodic reports published by the Company, or constitutes an addition to those reports, and its publication does not require the Company to fulfill the obligation to provide information as imposed on the Company as a public company. Please note that the only reliable source of information on the situation of the Company, its forecasts, events regarding the Company, its financial results and indicators is the current and periodic reports published by the Company as part of its obligation to provide information. The Company is solely entitled to the rights regarding the entire Presentation. The Presentation is subject to protection resulting from the provisions of law. The financial and sales data provided in this Presentation have been rounded to PLN million and have been presented with an accuracy to one decimal place. This Presentation is not directed to, or intended for distribution to or on the territory of any country where such publication or distribution of the information contained in this Presentation is subject to restrictions or is forbidden by law. 19

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