BANK HANDLOWY W WARSZAWIE S.A. 3Q 2008 consolidated financial results -1-

Transcription

1 BANK HANDLOWY W WARSZAWIE S.A. 3Q 2008 consolidated financial results -1-

2 Sound net income growth as compared to 3Q 2007 /PLN MM/ % Q07 3Q08-2-

3 P&L lines impact on net income 3Q 2008 vs. 3Q 2007 /PLN MM/ NET INCOME 3Q07 Treasury Fees Interests Net impairment losses Other NET INCOME 3Q 08 73% Treasury result 22% Fees result 9% Net interest income 3,4% by 0,4 pp Net interest margin 12 mln Net impairment losses 2% Expenses and depreciation -3-

4 Major financial ratios 3Q Q Q 2008 ROE* 14.9% 13.8% 17.4% ROE 16.3% 14.9% 15.6% ROA* 1.9% 1.8% 2.3% Cost / Income 61 % 63 % 56 % CAR 12.9% ** 11.6% 12.3% * based on annualized net income **CAR calculated as at December 31,

5 Banking sector liquidity PLN B 75 Funding gap of non-financial sector (deposits - loans) Q Q Q Q Q Q 2008 Banking Sector Citi Handlowy Source: NBP (Polish central bank), financial statements of Citi Handlowy -5-

6 CAR 14% CAR 13% 12,4% 12,9% 12,3% 12% 11% 11,8% 12,1% 11,0% 11,6% 10,8% 10,8% 10% 9% 8% 3Q07 4Q07 1Q08 2Q08 3Q08 Banking sector Citi Handlowy -6-

7 Major factors impacting 3Q 2008 net result vs. 3Q 2007 Treasury 3Q Q 2008 I/D (mln zł) /PLN MM/ Treasury result 2Q 06 3Q 06 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 Successful management of the Bank s own position Active sale of products to customers: Significant increase in FX transactions volume of non-bank customers and in FX options transactions Investment debt securities sale -7-

8 Treasury Customer activity Proprietary management 51% Customer activity result 49% FX result (FX spot) High volatility of the proprietary management result Customer activity result*/ Proprietary management result */ 2Q 06 3Q 06 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 2Q 06 3Q 06 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 *Scale on charts is incomparable -8-

9 Major factors impacting 3Q 2008 net result vs. 3Q 2007 Fees & commissions result 34% Investment and insurance products 44% Brokerage fees 25% Custody services /mld zł/ Mutual funds net inflow (market) WSE turnover (market) /mld zł/ Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08-9-

10 Major factors impacting 3Q 2008 net result vs. 3Q 2007 Net interest income and net interest margin 28% 37% (11%) /PLN MM/ Interests from loans nonfinancial sector Interests from credit cards AFS portfolio income Net interest result Net interest margin 1Q 06 2Q 06 3Q 06 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 3,5% 3,4% 3,3% 3,2% 3,1% 3,0% 2,9% 2,8% 2,7% 2,6% -10-

11 Major factors impacting 3Q 2008 net result vs. 3Q 2007 Net impairment losses 3Q Q 2008 I/D (mln zł) (10.6) (22.6) (12.0) /PLN MM/ Net impairment losses (10) (20) (30) 2Q 06 3Q 06 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q

12 Expenses under control strategy delivery /PLN MM/ (2%) (1%) 177 (4%) 171 Cost / Income 3Q07 2Q08 3Q08 GCG 69% 68% 65% CMB 54% 57% 48% Total 61% 63% 56% 0 3Q2007 Corporate Bank (CMB) 3Q2008 Retail Bank (GCG) Corporate: lower staff expenses and staff expenditures, decrease of technological expenses Retail: Expenses of the segment went down slightely, higher expenses related to increased acquisition and portfolio growth were compensated by growing effectiveness of the segment and lower marketing spending -12-

13 Balance sheet structure improvement Assets Liabilities /PLN MM/ 38.9 (5%) (5%) 37.1 /PLN MM/ Loans nonfinancial sector Financial sector AFS Trading portfolio Other assets % (18%) 9% (6%) (34%) % (15%) 0% (32%) Deposits nonfinancial sector Deposits financial sector Equity Trading portfolio Other liabilities % 71% up by 8 pp 38% up by 6 pp 12,3% up by 0,7 pp (3Q08/4Q07) Loans to nonfinancial sector (3Q08/4Q07) Loans / deposits ratio (3Q08/4Q07) Loans share in total assets (3Q08/2Q08) Capital Adequacy Ratio -13-

14 Loans Non-financial sector loans Corporate loans Retail loans (3%) Market 7% 7% % Market (excl. mortgage) 8% Corporate loans: including public sector and local government institutions Source: Bank s estimates, data pro-forma, in PLN billion -14-

15 Deposits Non-financial sector deposits Corporate deposits Retail deposits (4%) (5%) (2%) Market 4% (2%) 5% (6%) Market 5% Current Term Corporate deposits including public sector and local government institutions Source: Bank s estimates, data pro-forma, in PLN billion -15-

16 Results of the third quarter corporate banking Achievements of the Bank for corporates 130 % Growth of transactions volumes concluded by On Line Trading Platform compared to analogous period of % Growth of the number of customers on On Line Trading Platform (IIIQ2008/ IIIQ2007) Almost 80% growth of volumes level on hedging by customers their FX exposure by options (IIIQ2008/ IIIQ2007) 3-year loan agreement was signed with FMCG segment player for the amount of 40 million USD -16-

17 Results of the third quarter corporate banking Prepaid payment cards Citi Handlowy market leader Innovative solution with a wide spectrum of use: social benefit card instrument in contests and promotions tool used in incentive programmes 70% Market share 420,000 cards prepaid were issued as at the end of September % Growth of issued cards at the end of the III quarter 2008 as compared to analogous period of

18 Results of the third quarter retail banking Once again record results in the credit cards segment Aquisition of more than 74,000 credit cards almost 20% more than in 3Q 2007 Total number of cards as at the end of 3Q 2008 reached 972,000 26% more than as at the end of 3Q 2007 Stable growth of popularity co-branded cards The largest Credit Cards Discount Program in Poland Co-branded cards (65,000) amount more than 90% of acquired credit cards; The users of Motokarta Kredytowa Citibank-BP represent almost half of it (31,000) Thus the Citibank-BP card, with total of nearly 240,000 issued cards, strengthened its position of the largest cobranding partnership programme on the market More than 3,200 vendors 30% more than in 3Q

19 Innovations for customer retail banking Safety and comfort for individual customers Innovative SMS service which helps holders of Citibank Credit Cards to locate the Discount Program partners Shopping in the Internet for instalments with Citibank Credit Cards customer is enabled to independently set up instalment plans on his/her Citibank Credit Card payments, this via the ecard served internet shops CitibankOnline 20% (IIQ2008 vs. IIIQ2008) The growth of the number of customers, which decided on Online Statements (255,000) SMS with adresses of the nearest vendors, where attractive discounts can be obtained One motion for new customers for gaining retail products of the Bank (current account in PLN and other currencies, deposit accounts, credit line in the account, credit card and insurance products) -19-

20 Prospect for the Polish Economy Unfavourable External Environment Poland - GDP (% YoY) Euro Area (% YoY) Increased Financial Market Volatility EUR/PLN exchange rate q08 2q08 3q08 4q08 1q09 2q09 3q09 4q09 Likely Substantial Rate Cuts NBP reference rate (%) Forecast Euro zone recession will likely contribute to economic slowdown in Poland Risk of heightened market volatility due to global financial crisis Economic growth weakness opens doors for interest rate cuts in Poland Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Sources: NBP, Eurostat, GUS, Citi Handlowy forecasts. -20-

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22 3Q 2008 results PLN MM 3Q Q Q08/3Q07 I/ (D) I/ (D) % Net interest income 306,8 335,0 28,2 9% Net fee and commission income 191,3 150,1 (41,2) (22%) Dividend income 3,5 0,4 (3,1) (89%) Treasury 95,0 164,3 69,3 73% Equity instruments result 0,3 0,0 (0,3) (100%) Other operating revenue 18,0 11,2 (6,8) (38%) Revenue 614,9 661,1 46,2 8% Expenses and depreciation (375,7) (367,2) (8,5) (2%) Total operating expenses (349,0) (343,1) (5,8) (2%) Depreciation (26,7) (24,1) (2,6) (10%) Income on fixed assets sale 0,5 1,3 0,8 155% Movements in provisions (10,6) (22,6) (12,0) 113% Share in subs' profits 0,0 0,0 (0,0) - EBIT 229,2 272,5 43,4 19% Corporate tax (50,3) (56,8) 6,5 13% Net profit 178,8 215,7 36,9 21% -22-

23 Corporate banking 3Q 2008 results PLN MM 3Q Q Q08/3Q07 I/ (D) I/ (D) % Net interest income 138,6 128,5 (10,1) (7%) Net fee and commission income 78,8 62,0 (16,9) (21%) Dividend income 3,5 0,4 (3,1) (89%) Treasury 86,9 154,2 67,3 77% Equity instruments result 0,3 0,0 (0,3) (100%) Other operating revenue 18,1 13,9 (4,2) (23%) Revenue 326,2 358,9 32,7 10% Expenses and depreciation (177,3) (170,7) (6,6) (4%) Total operating expenses (158,5) (154,9) (3,6) (2%) Depreciation (18,8) (15,8) (2,9) (16%) Income on fixed assets sale 0,5 1,0 0,6 117% Movements in provisions 6,7 (4,0) (10,7) nm Share in subs' profits 0,0 0,0 (0,0) - EBIT 156,2 185,2 29,1 19% -23-

24 Retail banking 3Q 2008 results PLN MM 3Q Q Q08/3Q07 I/ (D) I/ (D) % Net interest income 168,3 206,6 38,3 23% Net fee and commission income 112,5 88,2 (24,3) (22%) Dividend income 0,0 0,0 0,0 - Treasury 8,1 10,1 2,0 25% Equity instruments result 0,0 0,0 0,0 - Other operating revenue (0,1) (2,7) (2,5) nm Revenue 288,7 302,2 13,4 5% Expenses and depreciation (198,4) (196,5) (1,9) (1%) Total operating expenses (190,4) (188,2) (2,2) (1%) Depreciation (8,0) (8,2) 0,3 4% Income on fixed assets sale 0,0 0,2 0,2 1167% Movements in provisions (17,4) (18,6) (1,3) 7% Share in subs' profits 0,0 0,0 0,0 - EBIT 73,0 87,3 14,3 20% -24-