BANK PEKAO S.A. GROUP

Transcription

1 BANK PEKAO S.A. GROUP Financial results after 4Q 2005 Strong results, positive outlook Warsaw, 21 February, 2006

2 DISCLAIMER Forward looking statements This presentation contains certain forward-looking statements with respect to the financial condition, results of operations, and businesses of Bank Pekao S.A. These statements and forecasts involve risk and uncertainty because they relate to events and depend upon circumstances that will occur in the future. There are a number of factors which could cause actual results or developments to differ materially from those expressed or implied by these forward looking statements and forecasts. The statements have been made with reference to forecast price changes, economic conditions and the current regulatory environment. Nothing in this announcement should be construed as a profit forecast.

3 AGENDA Fourth quarter consolidated results* Outlook * All 2005 data presented according to IFRS, 2004 data calculated pro-forma

4 NET INCOME GROWTH BY 23% DRIVEN BY OPERATING INCOME (UP 20%), CONFIRMING QUALITY OF VALUE CREATED BY THE BANK. ROE AT 19.2% NET INCOME (PLN mil.) Quarterly evolution +22.9% % +0.5% ROE (%) +1.8 p.p OPERATING INCOME (PLN mil.) 4Q 04 3Q 05 4Q 05 Quarterly evolution 17,4 19, % +12.8% % Q 04 3Q 05 4Q 05 3

5 COMBINATION OF HEALTHY REVENUES GROWTH, UP 8.7% AND FLAT COST BASE FURTHER IMPROVE OPERATIONAL LEVERAGE OF THE BANK, WITH COST INCOME RATIO DOWN TO 53% TOTAL REVENUES (PLN mil.) Quarterly evolution +8.7% +5.8% % COST / INCOME RATIO (%) -4.3 p.p OPERATING EXPENSES (PLN mil.) +0.6% Q 04 3Q 05 4Q 05 Quarterly evolution +0.3% +4.5% ,5 53, Q 04 3Q 05 4Q 05 4

6 REVENUES GROWTH BY 8.7% DRIVEN BY ALL MAJOR CATEGORIES. HIGH QUALITY STRUCTURE OF REVENUES WITH 36% COMING FROM FEES AND COMMISSIONS REVENUES (PLN mil.) 100% 11% 37% +8.7% % % 100% 11% 36% +5.8% +0.2% % ch 4Q 05/3Q % +9.9% % ch 4Q 05/4Q % +13.2% 52% % % % +8.5% Net interest income Net commission income Other 4Q 04 3Q 05 4Q 05 5

7 DOUBLE DIGIT GROWTH OF NET INTEREST INCOME Y/Y DRIVEN BY IMPROVING ASSETS MIX, STRONG SALE OF CONSUMER LOANS, AND MIXED IMPACT OF MARKET RATES CHANGES. SOLID Q4 NII AFTER EXCEPTIONAL Q3 CONFIRMING POSITIVE TREND IN 2005 NET INTEREST INCOME (PLN mil.) +8.5% -3.4% +10.0% Q 04 3Q 05 4Q NET INTEREST MARGIN* 4,0% 4,5% 4,3% 3,8% 4,3% 4Q 04 3Q 05 4Q * IFRS

8 TOTAL CUSTOMER SAVINGS UP 15.5% Y/Y DRIVEN BY MUTUAL FUNDS AND CORPORATE DEPOSITS CUSTOMER SAVINGS (PLN mil.) +15.5% +4.4% % ch % ch DEC 05/SEP 05 DEC 05/DEC % +31.3% % +48.0% -1.7% -8.0% % +9.7% - savings of retail customers DEC 04 SEP 05 DEC 05 Retail (*) (***) Mutual Funds (**) Corporate 7 * including bonds, ** total PPIM mutual funds, *** Bank only

9 MUTUAL FUNDS INCREASED BY 48% Y/Y WITH CLEAR IMPROVEMENT IN BOTH ASSET AND SALE STRUCTURE MUTUAL FUNDS VOLUMES (PLN mil.) 4Q 2005 MUTUAL FUNDS ASSETS STRUCTURE* +48.0% +6.6% % 48.6% 8.2% 4Q04 3Q 05 4Q 05 MARKET SHARE 34.5% 33.8% 31.4% MF SALE STRUCTURE THROUGH PEKAO (%) 6,5% 8,4% 13,1% 32,1% 41,5% 63,4% 61,4% 50,1% 23,5% 4Q 04 3Q 05 4Q 05 Bonds MF 4Q 04 3Q 05 4Q 05 Balanced MF Equity MF 8 * all funds - domestic and international

10 LOANS PORTFOLIO INCREASED BY 12.1% Y/Y, ABOVE THE MARKET, DESPITE NON COMPETING ON FX MORTGAGE MARKET. REGULAR LOANS UP 17.4% CUSTOMER LOANS* (PLN mil.) +12.1% +4.6% % ch % ch DEC 05/SEP 05 DEC 05/DEC % +9.5% % +20.7% DEC 04 SEP 05 DEC 05 Retail (**) Corporate Regular Loans % y/y 9 * Nominal value **Bank only

11 SUCCESSFUL LAUNCH OF CONSUMER LOAN POŻYCZKA EXPRESOWA WITH 1.7 BLN SALE, CONFIRMING PRODUCT ATTRACTIVENESS VOLUME SOLD (in PLN mil.) mln % +2.8% Q 04 3Q 05 4Q 05 10

12 VOLUME OF PLN MORTGAGES STOCK INCREASED BY 41 % Y/Y. SALE OF MORTGAGES 6% Y/Y ON A MARKET AGGRESSIVELY DRIVEN BY CHF VOLUME OF MORTGAGES SOLD (PLN mil) +6.4% VOLUME OF PLN MORTGAGES STOCK (PLN mil) +40.7% VOLUME OF FX MORTGAGES STOCK* (PLN mil) +9.5% -24.7% % DEC 04 SEP 05 DEC 05 DEC 04 SEP 05 DEC * Source: Polish Banks Association

13 7.1% GROWTH OF FEES AND COMMISSION INCOME, ACCELERATED IN SECOND HALF OF THE YEAR. MUTUAL FUNDS AND LENDING WERE MAIN GROWTH DRIVERS FEE AND COMMISSION INCOME (PLN mil.) +7.1% +13.2% +9.9% % % % % ch 4Q 05/3Q % +24.4% +2.0% % ch 4Q 05/4Q % +68.2% -0.1% % % -2.6% Q 04 3Q 05 4Q 05 Accounts & transactions Cards Lending Mutual Funds 12

14 NUMBER OF CREDIT CARDS ISSUED DOUBLED Y/Y, STEPPING UP THE DRIVE TO TAP THIS SIGNIFICANT OPPORTUNITY NUMBER OF CARDS IN CIRCULATION (THS.) DEC 04 SEP 05 DEC 05 DEC05/DEC04 Credit cards % Charge cards % Debit cards % TOTAL % Number of transactions y/y % Volume of transactions y/y % 13

15 EFFICIENT COST MANAGEMENT RESULTING IN BELOW INFLATION COSTS GROWTH (+0.6%) COSTS (PLN mil.) +0.6% +0.3% +4.5% % % % ch 4Q 05/3Q % +12.1% % ch 4Q 05/4Q % -4.5% % % +5.8% Q 04 3Q 05 4Q 05 Personnel costs Non-personnel Depreciation 4Q 04 3Q 05 4Q 05 Headcount

16 COST OF RISK IMPROVED BY 29 B.P. TO 0.88% WHILE CONTINUING RIGOROUS CLASSIFICATION AND PROVISIONING POLICY. COVERAGE RATIO 79% IRREGULAR LOANS* (PLN mil.) COST OF RISK 19.9% 17.5% 16.2% % ch DEC 05/DEC04-9.2% % ch DEC 05/SEP05-3.6% % +5.9% 0,99% 0,83% DEC 04 SEP 05 DEC 05 Regular NPL's 4Q 04 4Q 05 PROVISION COVERAGE RATIO 70,6% 76,7% 79,2% 1,17% 0,88% DEC 04 SEP 05 DEC * According to NBP classification

17 ALL KEY PERFORMANCE INDICATORS SHOW IMPROVEMENTS CONFIRMING 2005 ACHIEVEMENTS EPS 9.2 PLN 53.2% C/I 57.5% 7.5 PLN 2.1% 2.5% ROA % NPL 19.9% 247 ths. 17.4% 19.2% 277 ths. Total revenues per employee pro-forma ROE 16

18 Fourth quarter consolidated results* Outlook * All 2005 data presented according to IFRS, 2004 data calculated pro-forma

19 AGAINST A STRONG AND PROVEN BACKGROUND 2006 WILL BE HARVESTING TIME FOR PEKAO BUSINESS LEVERS KEY PRODUCTS Strong customer base Strong and professional management team Large and efficient branch network Revenue and cost management capability Excellence in credit risk management Consumer loans Mortgages SME/Mid lending Mutual funds Pay-later cards Transaction banking and hedging products 18

20 GROWTH OPPORTUNITY IN LENDING WILL BE CAPTURED LEVERAGING/BUILDING ON CAPABILITIES EXTENSIVELY TESTED IN 2005 LENDING MORTGAGE Market Growth: +17% KEY ENABLERS Leverage on 2005 successes (PLN mortgage volume + 40% in 2005) and potential market shift to PLN Benefit from growing contribution of cooperation with partners CONSUMER LOANS Market Growth: +18% Continue drive in consumer loans sales (PLN 1.7 bln sale in 2005) Further product enrichment Strengthen salesforce by additional 100 sellers SMALL AND MID CORPORATE LOANS Market Growth: +8.5% Leverage on streamlined credit process Newly implemented regional SME coordinator Advisors headcount increased by 90 19

21 CONTINUED FOCUS ON MUTUAL FUNDS WILL PRESERVE OUR LEADERSHIP IN ASSET GATHERING SAVINGS KEY ENABLERS MUTUAL FUNDS Market Growth:+9.5% Product enrichment leveraging on Pioneer expertise Continued penetration across segments supported by continued market growth 20

22 PRODUCT ENHANCEMENTS AND FOCUSED SALES EFFORTS WILL DELIVER TRANSACTION-RELATED REVENUE GROWTH TRANSACTIONS KEY ENABLERS PAY-LATER CARDS Systematic cross selling with loan products Loyalty program introduction to increase number of active cards TRANSACTION BANKING AND HEDGING PRODUCTS Newly introduced cash management system, new internet platform Focus on FX trading transaction services through active offer of hedging instruments supported by new dedicated IT system 21

23 2006 PERFORMANCE DRIVEN BY REVENUES GROWTH LEVERAGING MARKET FURTHER GROWTH AND DEVELOPED CAPABILITIES Harvesting year: Favorable market trends Capabilities developed in 2005 ripe to drive top line growth in 2006 Revenues Revenue growth driven by both growth of volumes and increasing cross-selling Operating costs Net profit Costs holding stable in real terms Net profit growth reflecting good development on operating level, with effective risk management and with effective tax rate expected to remain on similar level Possible strategic turns (not factored in): Possible domestic merger 22

24 Appendix 23

25 POLISH ECONOMY SHOULD ACCELERATE IN 2006, CREATING FAVORABLE ENVIRONMENT FOR BANKING SECTOR MACROECONOMIC SCENARIO F GDP (1), y/y % ch Inflation rate (avg) % WIBOR 3m (eop) % WIBOR 3m (avg) % EURIBOR 1m (eop) % EURIBOR 1m (avg) % LIBOR 1m (eop) % LIBOR 1m (avg) % Exchange rate EUR (eop) Acceleration of GDP growth Consumption growth driven mainly by stronger labor market Export resilient despite strong zloty Higher import as a result of investment acceleration Further improvement in investments, continuing trend visible already in 2005 Much smaller changes in interest rate environment, both domestically and internationally Exchange rate USD (eop) Source: Pekao expectations (1) Estimate

26 CONTINUATION OF 05 SECTOR TRENDS, WITH SIMILAR CUSTOMER PRFERENCESS BANKING SYSTEM F Loans, y/y% ch - retail, y/y % ch - corporate, y/y % ch - mortgage, y/y % ch More balanced loans growth with more reasonable corporate lending improvement Slowdown of corporate deposits Deposits, y/y% ch - retail, y/y % ch - corporate, y/y % ch growth as an effect of stronger investments Slower mutual funds inflows resulting mainly from higher volatility Mutual funds, y/y % ch Source: Pekao expectations

27 POLISH ECONOMY TERENDS GDP (%YoY) INVESTMENTS (%Y/Y) 6,8 5,9 8,5 9,9 2,4 4,0 4,2 4,7 4,8 3,9 2,1 2,8 3,7 4,1 1,5 0,7 4,7 4,9 5,3 1,2 3,8 5,7 1Q 03 2Q 03 3Q 03 4Q 03 1Q 04 2Q 04 3Q 04 4Q 04 1Q 05 2Q 05 3Q 05 4Q 05E 1Q 03 2Q 03-0,6 3Q 03 4Q 03 1Q 04 2Q 04 3Q 04 4Q 04 1Q 05 2Q 05 3Q 05-3,3 4Q 05E EXPORT (EUR mln) CONSUMPTION (%Y/Y) JAN'04 MAR JUN SEP DEC MAR'05 JUN SEP DEC 0,1 2,6 2,2 2,7 4,74,8 4,1 2,3 1,7 1,6 1Q 03 2Q 03 3Q 03 4Q 03 1Q 04 2Q 04 3Q 04 4Q 04 1Q 05 2Q 05 3Q 05 2,7 4,0 4Q 05E 26 Source: Central Statistical Office, National Bank of Poland

28 BANKING SECTOR TERENDS DYNAMIC OF HOUSEHOLDS AND CORPORATE LENDING IN THE POLISH BANKING SECTOR (% Y/Y) 10,3 8,5 3,3 1,6 12,6 12,2-2,3-4,8 15,5-7,1 13,9-8,2 13,8 14,1-3,4-3,9 15,5 0,8 18,9 22,8 1,5 2,8 2Q 03 3Q 03 4Q 03 1Q 04 2Q 04 3Q 04 4Q 04 1Q 05 2Q 05 3Q 05 4Q 05 Households Corporate DYNAMIC OF HOUSEHOLDS AND CORPORATE DEPOSITS IN THE POLISH BANKING SECTOR (% Y/Y) 16,8-6,8 21,1-6,2 24-0,5 28,5-0,5 0,0 32,8 25,9 24,8 0,6 0,6 24,4 3,3 21,5 14,1 16,8 4,2 4,4 3,6 2Q 03 3Q 03 4Q 03 1Q 04 2Q 04 3Q 04 4Q 04 1Q 05 2Q 05 3Q 05 4Q 05 Households Corporate TOTAL SECTOR LENDING (% Y/Y) 11,8 TOTAL SECTOR DEPOSITS (% Y/Y) 10,4 11,6 6,1 5,4 5,4 3,5 3,2 1,8 3,3 4,6 7,4 9,6-0,2 4,8 6,0 8,2 7,9 8,4 9,2 9,4 2Q 03 3Q 03 4Q 03 1Q 04 2Q 04 3Q 04 4Q 04 1Q 05 2Q 05 3Q 05 4Q 05 2Q 03 3Q 03 4Q 03 1Q 04 2Q 04 3Q 04 4Q 04 1Q 05 2Q 05 3Q 05 4Q 05-1,9 27 Source: National Bank of Poland

29 BANKING SECTOR TERENDS (2) DYNAMIC OF HOUSEHOLDS LENDING IN THE POLISH BANKING SECTOR (% YTD) DYNAMIC OF HOUSEHOLDS DEPOSITS IN THE POLISH BANKING SECTOR (% YTD) I II III IV V VI VII VIII IX X XI XII -2 I II III IV V VI VII VIII IX X XI XII -3 DYNAMIC OF CORPORATE LENDING IN THE POLISH BANKING SECTOR (% YTD) DYNAMIC OF CORPORATE DEPOSITS IN THE POLISH BANKING SECTOR (% YTD) I II III IV V VI VII VIII IX X XI XII I II III IV V VI VII VIII IX X XI XII 28

30 AVER. EMPLOYMENT IN ENTERPRISES SECTOR (THS.) 4850,0 INFLATION, INTERVENTION RATE, 3M WIBOR 4800,0 4750,0 4700,0 4650,0 4600,0 5,2 5,3 5,3 5,3 0,5 0,8 5,6 5,3 1,7 5,3 5,5 1,7 6,1 5,8 4,4 6,9 6,5 4,4 6,6 6,5 4,4 5,9 6,0 3,4 4,9 5,0 1,4 4,5 4,6 4,5 4,5 1,8 0,7 4550,0 2Q 03 3Q 03 4Q 03 1Q 04 2Q 04 3Q 04 4Q 04 1Q 05 2Q 05 3Q 05 4Q ,0 Inflation yoy EOP 3M WIBOR Intervention rate 2004 I II III IV V VI VII VIII IX X XI XII 2005 I II III IV V VI VII VIII IX X XI 29 Source: Central Statistical Office, National Bank of Poland

31 Dynamic of USD and EURO rate (average in month) 130,0 125,1 120,0 111,4 114,3 115,2 106,8 107,8 110,0 112,5 105,3104,6 105,6 100,0 97,1 102,4 99,1 97,1 104,6 100,0 96,9 92,3 98,5 93,1 95,1 95,2 102,0 102,7 101,1 92,8 92,391,6 91,8 99,4 90,0 95,3 92,1 92,3 92,6 93,3 87,3 88,9 86,9 86,6 84,5 78,8 80,0 74,3 78,1 71,8 75,4 70,7 74,1 70,0 XII-00 III VI IX XII-01 III VI IX XII-02 III VI IX XII-03 III VI IX XII III VI IX XII PLN/USD PLN/EURO 30