27 January 2016 POLAND. January December 2015

Transcription

1 27 January 2016 POLAND January December 2015

2 Disclaimer Bank Zachodni WBK S.A. ("BZ WBK") cautions that this presentation contains forward-looking statements. These forward-looking statements are found in various places throughout this presentation and include. without limitation. statements concerning our future business development and economic performance. While these forward-looking statements represent our judgment and future expectations concerning the development of our business. a number of risks. uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. These factors include. but are not limited to: (1) general market. macro-economic. governmental and regulatory trends; (2) movements in local and international securities markets. currency exchange rates and interest rates; (3) competitive pressures; (4) technological developments; and (5) changes in the financial position or credit worthiness of our customers. obligors and counterparties. The risk factors that we have indicated in our past and future filings and reports could adversely affect our business and financial performance. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. Forward-looking statements speak only as of the date on which they are made and are based on the knowledge. information available and views taken on the date on which they are made; such knowledge. information and views may change at any time. BZ WBK does not undertake any obligation to update or revise any forward-looking statement. whether as a result of new information. future events or otherwise. The information contained in this presentation is subject to. and must be read in conjunction with. all other publicly available information. including. where relevant any fuller disclosure document published by BZ WBK. Any person at any time acquiring securities must do so only on the basis of such person's own judgment as to the merits or the suitability of the securities for its purpose and only on such information as is contained in such public information having taken all such professional or other advice as it considers necessary or appropriate in the circumstances and not in reliance on the information contained in the presentation. In making this presentation available. BZ WBK gives no advice and makes no recommendation to buy. sell or otherwise deal in shares in BZ WBK or in any other securities or investments whatsoever. Neither this presentation nor any of the information contained therein constitutes an offer to sell or the solicitation of an offer to buy any securities. Note: Statements as to historical performance or financial accretion are not intended to mean that future performance. share price or future earnings (including earnings per share) for any period will necessarily match or exceed those of any prior year. Nothing in this presentation should be construed as a profit forecast. Note: The results information contained in this presentation has been prepared according to Spanish accounting criteria and regulation in a manner applicable to all subsidiaries of the Santander Group and as a result it may differ from the one disclosed locally by Bank Zachodni WBK S.A. 2

3 Agenda Macro-economic environment and financial system Strategy and business Results Appendix

4 Macro-economic environment Stable economic growth. very low inflation Annual GDP Growth (%. real) Central Bank monetary policy (%) (e) 2017 (e) (e) 2017 (e) Inflation (annual change. %) Average exchange rate (EUR/PLN) (e) 2017 (e) (e) 2017 (e) Source: GUS. NBP. BZ WBK 4

5 Macro-economic environment Strong domestic demand. record low unemployment Internal Demand (YoY growth. %) Current account balance (% GDP) (e) 2017 (e) (e) 2017 (e) Investment (YoY growth. %) Unemployment (yearly average. %) (e) 2017 (e) (e) 2017 (e) Source: GUS. NBP. BZ WBK 5

6 Financial system: Loan and deposit growth Solid growth in loans and deposits Total loans (Constant bn) 1 YoY (%) % 7.8% 7.9% 7.9% 7.2% D'14 M'15 J'15 S'15 N'15 Stable loan growth driven by credit for investment (ca. 8% YoY). mortgages (ca. 9% YoY) and consumption (ca. 5.5% YoY) Introduction of bank tax may lower loan growth in the coming quarters. despite solid economic environment Total customer deposits (Constant bn) Stable deposit growth driven by individuals (ca. 10% YoY) and corporate (ca. 12% YoY) YoY (%) 9.0% 9.2% 8.7% 8.9% 10.0% Deposits are expected to grow by 5% in 2016 D'14 M'15 J'15 S'15 N'15 Source: NBP. BZ WBK (1) constant EUR/PLN = (as of 31/12/2015) 6

7 Agenda Macro-economic environment and financial system Strategy and business Results Appendix

8 Our Franchise Bank Zachodni is the 3rd bank in Poland Business and Results Constant Gross Loans ( bn) % Deposits ( bn) % Consolidated profit ( MM) % Attributable profit ( MM) % Network and Customers 2015 Total customers (MM) 4.3 Branches (#) 723 ATMs (#) 1,525 Market Share Loans 9.6% Deposits 10.0% 2015 Var. YoY Sept 15 Source: NBP. BZ WBK Market share includes Santander Consumer Bank, data for September

9 Strategy To become the leading customer-centric bank A customer-centric bank cares for its customers to achieve sustainable long-term relationships We believe that a customer wants: BZ WBK as a customer-centric bank wants to be: A simple set of products. fairly priced and right for me. that are easily explained and understood Quick and error-free service through the channel of my choice Recognition that I'm an individual. with my own needs. whose relationship you value Simple Personal Fair Our strategy encompasses both elements critical to customer-centricity Business and operational improvement Cultural change Market leading business and financial performance Creating a bank that is Simple Personal Fair 9

10 Customers +7% Retail loyal customers (k) 1,157 1,242 End-2016: 1.2 Million Successful continuation of strategy to increase loyal customers and related income Dec'14 Dec'15 Loyal SMEs and Corporate customers (k) 53 Dec'14 +12% 60 End-2016: 65k Enhance value proposition and non-risk based revenue. Service excellence & continuous quality improvement Dec'15 +6% Online digital customers (k) 1,772 1,885 End-2016: 2 Million Multi-channel distribution driven by customer choice and best in class digital channels Dec'14 Dec'15 10 Note: Loyal definitions

11 Total loans performance +11.0% YoY due to growth in Mortgage. SME and Corporate Total gross loans (Constant MM 1 ) 11.0% 2.7% 17,845 18,397 18,901 19,291 19,809 Dec'15 YoY (%) QoQ (%) Individuals % 2% Mortgage % 2% Cash loans 1.6 9% 2% Other personal % 2% Companies % 3% SME % 0% Corporate % 2% Property % 10% GCB 1.6 5% 4% Total Gross Loans % 3% D'14 M'15 J'15 S 15 D (1) At period end rate as of December 2015

12 Total customer funds performance +6.3% YoY in Deposits and +4% YoY in Total customer funds Total deposits (Constant MM 1 ) 6.3% 5.6% 21,460 20,188 19,623 19,836 20,313 Dec' 15 YoY (%) QoQ (%) Demand % 7% Savings % 4% Time % 6% Total % 6% FUM % -13% D'14 M'15 J'15 S 15 D 15 Total customer funds % 3% 12 (1) At period end rate as of December 2015

13 Agenda Macro-economic environment and financial system Strategy and business Results Appendix

14 Net interest income and spreads (1) At average exchange rate as of December 2015 (12M 15) (2) Local criteria including SWAP points, excluding SCB -6%YoY due to lower interest rates +5%QoQ due to active management Loan spreads (%) Net Interest Income (Constant MM 1 ) Retail Banking Q'14 1Q'15 2Q'15 3Q'15 4Q'15 Deposit spreads (%) 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 Net Interest Margin % 3.08% 2.97% 3.03% 3.09% Retail Banking Q'14 1Q'15 2Q'15 3Q'15 4Q'15 14

15 Net fees -3%YoY due to interchange regulations +7% QoQ due to loan and insurance income Net fees (Constant MM 1 ) YoY (%) QoQ (%) Cards % -9% Customer + Other % 3% Loan + Insurance % 33% Capital market fees % 7% Other % -3% Total % 7% 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 15 (1) At average exchange rate as of December 2015 (12M 15)

16 Gross income Gross income impacted by lower interest rates and higher regulatory charges YoY (%) QoQ (%) Gross income (Constant MM 1 ) Net Interest Income % 5% Net Fees % 7% Subtotal 1,204 1,269-5% 6% Gains/losses on financial transactions % 29% Other 2 (40) Gross Income 1,276 1,376-7% -4% 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 16 (1) At average exchange rate as of December 2015 (12M 15) (2) Other includes : Other operating income. regulatory costs and dividends from AVIVA entities in Q2 and Q4: EUR 27m.

17 Operating expenses Operating expenses under tight control Operating expenses (Constant MM 1 ) YoY (%) QoQ (%) General and administrative expenses (550) (538) 2% -1% Depreciation and amortisation (44) (48) -7% 0% Operating expenses (594) (585) 1% 0% 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 Efficiency ratio (with amortisations) 46.5% 42.5% Number of branches Number of employees 11,474 12, (1) At average exchange rate as of December 2015 (12M 15)

18 (1) At average exchange rate as of December 2015 (12M 15) (2) Cost of credit = 12 month loan-loss provisions / average lending. Calculated in current euros Net operating income after loan-loss provisions (LLPs) Improvement in credit quality / NPL ratio lower YoY at 6.3% LLPs and Cost of credit (Constant MM 1 ; %) Cost of credit % 1.00% 1.00% 0.96% 0.87% YoY (%) QoQ (%) Net Operating Income % -6% LLPs (167) (186) -10% 13% Net LLPs Q'14 1Q'15 2Q'15 3Q'15 4Q'15 Net operating income after LLPs % -12% NPL ratio 6.3% 7.4% NPL Coverage ratio 64% 60% 18

19 Attributable profit 2015 profit lower by 15% YoY due to lower interest rates and higher (once-off) regulatory cost in Q4 Attributable profit (Constant MM 1 ) YoY (%) QoQ (%) Profit before taxes % -17% Tax on profit (101) (134) -25% -5% Net income % -21% Attributable profit % -20% Effective tax rate 19.8% 21.8% 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 19 (1) At average exchange rate as of December 2015 (12M 15)

20 Conclusions Market Environment & Financial System Strategy & Business Stable economic growth of 3.5% expected in 2015 and 2016 Deflation may persist until 2H16 and average annual CPI inflation of ca. 0% in Interest rate cut by 25bp / 50bp likely due to subdued inflation outlook 2016 banking sector profits will be lower due to a new bank tax of 44bps levied on bank assets and higher regulatory fees Sector loan growth can slow to 5% due to bank tax Business strategy continues to be focused on gathering new customers through the development of our multi-channel approach and increasing loans and related fee income from the Consumer. SME. Leasing. Factoring. Business & Corporate and GCB segments. Sales efforts supported by marketing campaign for new and existing products. Increasing level of loyal customers through more activity and related income. Close management of Net Interest Income in low interest rate environment. Fees lower YoY. due to the regulation of interchange fees since mid-2014 however. fee income growing QoQ. +7% in Q4 Results Costs under tight control flat QoQ. Improving credit quality with room for further improvement going forward. Year-on-year profit 15% lower due to lower interest rates and higher once-off regulatory impacts. 20

21 Agenda Macro-economic environment and financial system Strategy and business Results Appendix

22 Balance sheet EUR million. Constant currency* Variation Amount % Loans and credits* 18,977 17,013 1, Trading portfolio (w/o loans) 894 1,168 (275) (23.5) Available-for-sale financial assets 5,305 5,828 (523) (9.0) Due from credit institutions* 1,247 1, Intangible assets and property and equipment Other assets 2,429 2,546 (117) (4.6) Total assets/liabilities & shareholders' equity 29,112 27,855 1, Customer deposits* 21,460 20,188 1, Marketable debt securities* Subordinated debt (238) (70.4) Insurance liabilities 78 (78) (100.0) Due to credit institutions* 1,152 1,267 (115) (9.1) Other liabilities 3,515 3, Stockholders' equity** 2,487 2, Off-balance-sheet funds 3,209 3,522 (313) (8.9) Mutual funds 3,106 3,437 (331) (9.6) Pension funds Managed portfolios Customer funds under management 25,168 24, * As of * Includes all stock of concept classified in the balance sheet ** Capital + reserves + retained profit + valuation adjustments 22

23 Income statement EUR million. Constant currency* Variation Amount % Net interest income (52) (6.3) Net fees (13) (3.0) Gains (losses) on financial transactions Other operating income** (40) 28 (67) Gross income 1,276 1,376 (100) (7.3) Operating expenses (594) (585) (9) 1.5 General administrative expenses (550) (538) (12) 2.2 Personnel (324) (310) (13) 4.3 Other general administrative expenses (226) (227) 1 (0.6) Depreciation and amortisation (44) (48) 3 (7.1) Net operating income (108) (13.7) Net loan-loss provisions (167) (186) 18 (9.8) Other income (4) 11 (15) Profit before taxes (105) (17.1) Tax on profit (101) (134) 33 (24.6) Profit from continuing operations (72) (14.9) Net profit from discontinued operations Consolidated profit (72) (14.9) Minority interests (17) (13.6) Attributable profit to the Group (55) (15.4) * As of exchange rate 2015 ** Including dividends, income from equity-accounted method and other operating income/expenses 23

24 Quarterly income statements EUR million. Constant currency* 1Q 14 2Q 14 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 4Q 15 Net interest income Net fees Gains (losses) on financial transactions Other operating income** (5) 16 (9) (42) Gross income Operating expenses (148) (148) (144) (145) (151) (150) (147) (146) General administrative expenses (136) (137) (132) (133) (140) (139) (136) (135) Personnel (77) (76) (77) (80) (82) (80) (79) (83) Other general administrative expenses (59) (60) (56) (53) (58) (59) (57) (52) Depreciation and amortisation (12) (12) (12) (12) (12) (11) (11) (11) Net operating income Net loan-loss provisions (43) (42) (44) (57) (39) (45) (39) (44) Other income (3) (16) 8 22 (1) (2) 3 (4) Profit before taxes Tax on profit (26) (27) (33) (48) (27) (22) (26) (25) Profit from continuing operations Net profit from discontinued operations Consolidated profit Minority interests Attributable profit to the Group * As of exchange rate 2015 ** Including dividends, income from equity-accounted method and other operating income/expenses 24

25 Thank you Nuestra Our purpose misión to es help contribuir people al and progreso de las businesses personas prosper. y de las empresas. Nuestra Our culture cultura is based basa on the en la belief creencia that de que everything todo lo we que do hacemos should debe ser