BANK PEKAO S.A. GENERAL PICTURE www.pekao.com.pl
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New Management Board of the Bank MICHAŁ KRUPIŃSKI Vice President of Bank Pekao S.A. s Management Board coordinating the work of Management Board Vice Presidents ROKSANA CIURYSEK-GEDIR* Private Banking ANDRZEJ KOPYRSKI CIB TOMASZ KUBIAK CFO MICHAŁ PIOTR LEHMANN Support functions, Logistics Division MAREK LUSZTYN CRO TOMASZ STYCZYŃSKI SME MAREK TOMCZUK Retail Banking o Board Members with average 15-year experience in financial sector o Half of new Management comes from Pekao and half from other financial institutions o Upgraded role of SME segment: new Division and new Vice President in charge of this market segment * - from January 1st, 2018 2
Agenda 1. General picture 2. 2016-2017 Outlook 3. Appendix 3
Bank Pekao snapshot Key financial and non-financial highlights as at June 2017 ( ) Assets 40.3bl Loans Retail PLN loans Corporate loans Public sector loans 31.0bl 13.0bl 13.2bl 3.3bl Retail clients Corporate & SME clients Mobile banking customers Internet banking customers No of branches No of ATM s New payment cards 5.0m 0.3m 1.7m 3.5m 918 1 757 267th 6M Deposits 32.1bl Retail deposits 17.3bl Corporate deposits 14.7bl Pekao share in Polish banking sector Total revenues Operating profit Net profit 12.5% 12.5% 15.7% Banking leader in corporate loans and deposits and loans for public sector. 4 NOTE: Financial data as at June 30th, 2017 NOTE: Corporate loans and deposits excl. respectavly, BSB and reverse reo transactions and SBB and repo transactions 1EUR = 4.2265 PLN
Solid Pekao fundamentals CT 1 ROE 18,0% 16,5% 8,9% 7,1% Pekao Sector Pekao Sector L/D RATIO C/I RATIO 90,9% 93,9% 56,3% 56,4% Pekao Sector Pekao Sector ROA CoR 0,59% 1,2% 0,40% 0,8% Pekao Sector Pekao Sector 5 Data as of June 30th, 2017 or 1H2017 Source: NBP, KNF reports, Pekao non consolidated data (CT1 and CoR consolidated) C/I ratio for commercial banks incl. banking tax
Market share - Retail Market share Retail lending Retail deposits 9.5% 10.2% PLN MORTGAGES (%) CONSUMER LOANS - PEX(%) 16,3% + 1.6 pp + 1.3 pp 17,9% 8,4% 9,7% Dec 10 Jun 17 Dec 10 Jun 17 Source: Calculation based on adjusted NBP reporting; Dec 2010 Jun 2017 6
Market share - Corporate Market share Market leader in corporate lending Market leader in corporate deposits Project finance & Leveraged finance Debt capital market Corporate bonds Leader in cash management service Trade finance market 13% 13% 30% 16% 26% 17% 17% NOTE: Market share as at June 30th, 2017 7
Market position - Bank Pekao vs peers Deposits Loans PKO 49,0 PKO 48,4 Pekao 31,8 Pekao 28,8 BZWBK 25,8 BZWBK 24,9 ING 23,1 ING 20,6 MBank 20,9 MBank 19,7 Millennium 13,5 BGŻBNPP 13,3 BGŻBNPP 13,0 Alior 11,6 Alior 12,2 Millennium 11,2 GetinNoble 12,2 GetinNoble 10,6 Note: Consolidated data in bln EUR as at June 30th, 2017 8
Bank Pekao history 1929 Creation of the Bank 1998 Merger with 3 regional banks 1998 IPO Pekao listed on WSE 1999 UniCredit as a strategic investor 2007 BPH spin-off 2012 Rebranding 2017 Acquisition by PZU and PFR 9
Ratings of Bank Pekao S.A. FITCH RATINGS PEKAO POLAND Long-term rating (IDR) A- A- Short-term rating F2 F2 Viability rating a- - Support rating 2; Credit Watch Negative - Outlook Stable Stable S&P GLOBAL RATINGS PEKAO POLAND Long-term rating BBB+ BBB+ Short-term rating A-2 A-2 Stand-alone bbb+ - Outlook Stable Stable MOODY'S INVESTORS SERVICE LTD PEKAO (unsolicited rating) POLAND Long-term foreign-currency deposit rating A2 A2 Short-term deposit rating Prime-1 Prime-1 BCA baa1 - Outlook Stable Stable 10
Pekao became part of the biggest financial group in CEE Purchase of significant stake by PZU and PFR Powszechny Zakład Ubezpieczeń S.A. 20.0% Polski Fundusz Rozwoju S.A. 12.8% Transaction value PLN 10.6 bn (PLN 123 per share) Shareholders of Bank Pekao S.A. 60,9% 6,3% 12,8% 20,0% PZU SA PFR SA UniCredit Others 11
Agenda 1. General picture 2. 2016-2017 Outlook 3. Appendix 12
Polish economy outlook 2017 2016 2017F GDP, % y/y 2,7 4,1 Consumption, % y/y 3,8 4,3 Investments, % y/y -7,9 4,0 Unemployment, % eop 8,3 6,9 CPI, % avg -0,6 1,8 3M Wibor, % avg 1,73 1,73 Reference rate, % eop 1,5 1,5 Exchange rate EUR, eop 4,42 4,15 Exchange rate USD, eop 4,18 3,46 Public sector balance, % GDP -2,4-2,6 Note: Internal macroeconomic scenario 13
Polish banking sector outlook 2017 2016 2017F (2) Loans, % y/y 4,9 4,9 Retail, % y/y 5,2 4,4 Mortgage loans PLN 10,5 10,7 Consumer loans (1) 6,9 6,0 Corporate, % y/y 5,5 6,2 SME loans 4,8 6,7 Savings (3), % y/y 9,3 5,9 Deposits, % y/y 9,2 5,8 Retail, % y/y 9,5 5,1 Corporate, % y/y 7,9 1,9 Mutual Funds (4), % y/y 10,5 7,0 14 (1) all non-mortgage retail loans (2) Internal scenario (3) deposits + assets in mutual funds dedicated to retail cliens (4) assets in mutual funds dedicated to retail clients
Agenda 1. General picture 2. 2016-2017 Outlook 3. Appendix 15
Selected data Bank Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Jun 17 Oaatlets 1 014 1 002 1 001 1 001 1 034 975 928 918 ATM's 1 800 1 817 1 845 1 847 1 825 1 759 1 761 1 757 Employees 18 276 17 921 17 433 17 092 16 914 16 387 15 882 15 663 No of PLN current accounts (ths)* 4 743 4 834 5 305 5 108 5 214 5 314 5 480 5 533 No of mortgage loan accounts (ths)** 202 223 246 268 288 310 328 344 No of clients holding a consumer loan accounts (ths)*** 703 685 676 635 594 576 572 602 Number of individuals with an access to electronic banking Pekao24 (ths) 1 711 1 963 2 205 2 447 2 661 2 899 3 177 3 287 Number of individuals with an access to mobile banking (ths) 27 80 201 373 596 1 015 1 496 1 680 Number of business clients (SME) with an access to electronic banking systems (ths) 156 179 199 224 241 248 255 254 Group Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Jun 17 Employees**** 20 783 20 357 19 816 18 916 18 765 18 327 17 757 17 509 Outlets**** 1 073 1 051 1 040 1 001 1 034 975 928 918 ATM's**** 1 910 1 910 1 919 1 847 1 825 1 759 1 761 1 757 Number of MF accounts (ths)***** 1 102 1 020 939 933 907 850 784 769 Number of Brokerage accounts (ths)****** 217 376 367 361 353 346 340 337 (*) Number of accounts including pre-paid card accounts 16 (**) Retail clients accounts (***) Pożyczka Ekspresowa (Express Loan) (****) Credit Union (SKOK) Kopernik included since Dec 2014 (****) Pioneer Pekao Investment Management S.A. (*****) Including: Dom Maklerski Pekao (Dom Maklerski), subsidiarycentralny Dom Maklerski Pekao S.A. (CDM), and associated entity Dom Inwestycyjny Xelion Sp. z o.o. (Xelion)
Consolidated income statement (1/2) in PLN mln PLN 2010 2011 2012 2013 2014 2015 2016 1H 2017 Share in income or cost (%) Net interest income (1) 4 180 4 638 4 989 4 572 4 533 4 232 4 437 2 291 65% Net fee and commission 2 368 2 449 2 122 2 143 2 044 2 006 2 390 1 156 33% Operating income 7 340 7 808 7 953 7 565 7 346 7 059 7 347 3 511 100% Operating costs (2) -3 609-3 582-3 529-3 376-3 286-3 220-3 212-1 594 100% Payroll costs -1 950-1 946-1 910-1 881-1 905-1 909-1 897-952 60% Other administrative expenses -1 267-1 259-1 250-1 149-1 054-980 -974-472 30% Depreciation -392-377 -369-346 -327-331 -341-170 11% OPERATING PROFIT 3 731 4 226 4 424 4 189 4 060 3 839 4 135 1 917 Provisions -538-538 -669-664 -560-518 -501-230 Guarantee funds charges -40-89 -97-107 -140-274 -263-224 PROFIT BEFORE INCOME TAX 3 102 3 593 3 664 3 454 3 360 2 831 2 897 1 197 Income tax -571-684 -712-659 -635-538 -617-312 GROUP NET INCOME (3) 2 525 2 899 2 943 2 785 2 715 2 292 2 279 885 Cost/Income Ratio (%) (4) 49,2% 45,9% 44,4% 44,6% 44,7% 45,6% 43,7% 45,4% Cost of Risk (%) 0,68% 0,63% 0,72% 0,71% 0,56% 0,49% 0,45% 0,39% NIM (%) 3,5% 3,7% 3,7% 3,4% 3,2% 2,8% 2,8% 2,77% (1) NII and dividends and other income from equity investments 17 (2) Costs excl. guarantee funds charges (3) Net profit attributable to equity holders of the Bank (4) Operating cost excluding guarantee funds charges
Consolidated income statement (2/2) in EUR mln EUR 2010 2011 2012 2013 2014 2015 2016 1H 2017 Share in income or cost (%) Net interest income (1) 945 1 048 1 128 1 033 1 025 957 1 003 542 65% Net fee and commission 535 554 480 484 462 453 540 273 33% Operating income 1 659 1 765 1 798 1 710 1 660 1 596 1 661 831 100% Operating costs (2) -816-810 -798-763 -743-728 -726-377 100% Payroll costs -441-440 -432-425 -431-431 -429-225 60% Other administrative expenses -286-285 -283-260 -238-221 -220-112 30% Depreciation -89-85 -83-78 -74-75 -77-40 11% OPERATING PROFIT 843 955 1 000 947 918 868 935 454 Provisions -122-122 -151-150 -126-117 -113-54 Guarantee funds charges -9-20 -22-24 -32-62 -59-53 PROFIT BEFORE INCOME TAX 701 812 828 781 759 640 655 283 Income tax -129-155 -161-149 -143-122 -139-74 GROUP NET INCOME (3) 571 655 665 629 614 518 515 209 Cost/Income Ratio (%) (4) 49,2% 45,9% 44,4% 44,6% 44,7% 45,6% 43,7% 45,4% Cost of Risk (%) 0,68% 0,63% 0,72% 0,71% 0,56% 0,49% 0,45% 0,39% NIM (%) 3,5% 3,7% 3,7% 3,4% 3,2% 2,8% 2,8% 2,77% (1) NII and dividends and other income from equity investments 18 (2) Costs excl. guarantee funds charges (3) Net profit attributable to equity holders of the Bank (4) Operating cost excluding guarantee funds charges
The structure of the Group net profit (1/2) in PLN mln PLN cumulative Share in entitiy % 2010 2011 2012 2013 2014 2015 2016 6M 2017 Bank Pekao S.A. Banking - Poland 2 552 2 826 2 925 2 800 2 662 2 290 2 278 980 Entities - consolidated under full method 170 206 188 175 143 195 121 51 of which: (*) Pekao Leasing Sp. z o.o. Leasing 100% 4,8 42,0 41,9 40,6 54,6 53,9 40,0 17,2 Centralny Dom Maklerski Pekao S.A. Brokerage 100% 51,5 46,0 30,5 39,3 42,4 44,2 25,3 17,4 Pekao Bank Hipoteczny S.A. Mortgage Bank 100% 17,5 17,3 15,7 12,7 10,0 5,0 8,7 2,6 Pekao Pioneer PTE S.A. Pension Fund 65% 12,4 12,0 11,4 13,8 15,4 2,9 1,4 0,6 Pekao Faktoring Sp. z o.o. Factoring 100% 11,3 10,7 10,2 10,1 8,2 9,3 9,7 5,4 Pekao Investment Banking S.A. Brokerage 100% --- --- 0,0 --- --- 6,8 24,4 2,1 Centrum Bankowości Bezpośredniej Sp. z o.o. Call Centre 100% 1,1 3,7 3,2 3,9 2,4 2,7 3,4 1,7 Pekao Financial Services Sp. z o.o. Servicing MF/PF 100% 9,8 7,4 3,9 6,6 7,2 8,0 7,5 3,0 Centrum Kart S.A. Cards 100% 4,6 3,7 2,5 1,7 2,6 0,6 0,3 0,3 Pekao Fundusz Kapitałowy Sp. z o.o. in liquidation Business consulting 100% 2,8 1,3 1,2 0,6 0,3 0,2 0,3 0,2 Pekao Property S.A. Real estate development 100% --- --- 1,6-0,4-0,9-0,2-0,3 0,2 Entities - valued under the equity method 67 70 53 59 63 52 39 21 Pioneer Pekao Investment Management S.A. Mutual Funds 49% 57,1 62,3 45,2 48,3 51,8 44,6 36,4 19,1 Krajowa Izba Rozliczeniowa S.A. Clearing Services 34% 8,4 10,9 7,4 10,0 10,0 5,5 --- --- Dom Inwestycyjny Xelion Sp. z o.o. Financial Advisory 50% 0,8 0,7 0,7 1,1 1,5 2,0 2,2 1,4 Exclusions and consolidation adjustments -263-203 -224-249 -154-245 -159-167 Group Net Profit (**) 2 525 2 899 2 943 2 785 2 715 2 293 2 279 885 19 (*) Entities in liquidation, sold or indirect ownership not presented (**) Group net profit attributable to equity holders of the Bank (reported) NOTE: Data as reported
The structure of the Group net profit (2/2) in EUR mln EUR cumulative Share in entitiy % 2010 2011 2012 2013 2014 2015 2016 6M 2017 Bank Pekao S.A. Banking - Poland 599 663 686 657 625 537 515 232 Entities - consolidated under full method 40 48 44 41 34 46 27 12 of which: (*) Pekao Leasing Sp. z o.o. Leasing 100% 1,1 9,9 9,8 9,5 12,8 12,6 9,0 4,1 Centralny Dom Maklerski Pekao S.A. Brokerage 100% 12,1 10,8 7,2 9,2 9,9 10,4 5,7 4,1 Pekao Bank Hipoteczny S.A. Mortgage Bank 100% 4,1 4,1 3,7 3,0 2,3 1,2 2,0 0,6 Pekao Pioneer PTE S.A. Pension Fund 65% 2,9 2,8 2,7 3,2 3,6 0,7 0,3 0,1 Pekao Faktoring Sp. z o.o. Factoring 100% 2,7 2,5 2,4 2,4 1,9 2,2 2,2 1,3 Pekao Investment Banking S.A. Brokerage 100% --- --- 0,0 --- --- 1,6 5,5 0,5 Centrum Bankowości Bezpośredniej Sp. z o.o. Call Centre 100% 0,3 0,9 0,8 0,9 0,6 0,6 0,8 0,4 Pekao Financial Services Sp. z o.o. Servicing MF/PF 100% 2,3 1,7 0,9 1,5 1,7 1,9 1,7 0,7 Centrum Kart S.A. Cards 100% 1,1 0,9 0,6 0,4 0,6 0,1 0,1 0,1 Pekao Fundusz Kapitałowy Sp. z o.o. in liquidation Business consulting 100% 0,7 0,3 0,3 0,1 0,1 0,0 0,1 0,0 Pekao Property S.A. Real estate development 100% --- --- --- 0,4-0,1-0,2 0,0-0,1 0,0 Entities - valued under the equity method 16 16 12 14 15 12 9 5 Pioneer Pekao Investment Management S.A. Mutual Funds 49% 13,4 14,6 10,6 11,3 12,2 10,5 8,2 4,5 Krajowa Izba Rozliczeniowa S.A. Clearing Services 34% 2,0 2,6 1,7 2,3 2,3 1,3 #ARG! #ARG! Dom Inwestycyjny Xelion Sp. z o.o. Financial Advisory 50% 0,2 0,2 0,2 0,3 0,4 0,5 0,5 0,3 Exclusions and consolidation adjustments -62-48 -53-59 -36-57 -36-39 Group Net Profit (**) 593 680 691 653 637 538 515 209 20 (*) Entities in liquidation, sold or indirect ownership not presented (**) Group net profit attributable to equity holders of the Bank (reported)
Consolidated balance sheet (1/2) in PLN mln PLN Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Jun 17 Share in balance sheet (%) Cash and amounts due from Central Bank 5 969 4 886 9 207 4 191 9 226 7 882 5 873 6 735 4% Loans and advances to banks 6 259 5 586 4 054 7 548 7 170 7 315 3 258 3 289 2% Loans and advances to customers* 80 843 95 452 97 559 103 944 114 984 122 059 122 664 125 750 74% Investment securities 30 398 29 120 28 735 34 996 24 713 21 182 35 121 26 836 16% Assets held for sale 3 247 2 932 2 374 46 37 45 48 48 0% Intangible assets 697 703 669 627 627 637 596 593 0% Tangible fixed assets 1 822 1 773 1 671 1 590 1 544 1 461 1 423 1 400 1% TOTAL ASSETS 134 090 146 406 150 755 158 522 167 625 168 786 174 215 170 530 100% Amounts due to the Central Bank 728 356 0 1 1 1 6 6 0% Amounts due to other banks 6 913 5 544 7 783 6 418 5 345 5 958 4 823 4 497 3% Financial liabilities held for trading 114 0 247 310 591 611 673 290 0% Amounts due to customers 99 807 108 437 107 993 119 797 125 609 128 868 137 816 134 601 79% Debt securities issued 1 177 3 044 4 759 3 064 3 857 2 903 1 523 1 314 1% Total liabilities 113 833 125 233 127 491 135 008 143 579 145 361 151 303 148 821 87% Total Shareholders' equity 20 257 21 173 23 264 23 514 24 046 23 424 22 912 21 709 13% (*) Including loans and advances from customers and receivables from finance leases 21
Consolidated balance sheet (2/2) in EUR mln EUR Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Jun 17 Share in balance sheet (%) Cash and amounts due from Central Bank 1 401 1 147 2 161 984 2 165 1 850 1 328 1 522 4% Loans and advances to banks 1 469 1 311 951 1 771 1 682 1 716 736 743 2% Loans and advances to customers* 18 970 22 399 22 893 24 391 26 982 28 642 27 727 28 424 74% Investment securities 7 133 6 833 6 743 8 212 5 799 4 970 7 939 6 066 16% Assets held for sale 762 688 557 11 9 11 11 11 0% Intangible assets 164 165 157 147 147 149 135 134 0% Tangible fixed assets 427 416 392 373 362 343 322 317 1% TOTAL ASSETS 31 465 34 355 35 376 37 199 39 335 39 607 39 380 38 547 100% Amounts due to the Central Bank 171 84 0 0 0 0 1 1 0% Amounts due to other banks 1 622 1 301 1 826 1 506 1 254 1 398 1 090 1 016 3% Financial liabilities held for trading 27 0 58 73 139 143 152 66 0% Amounts due to customers 23 421 25 446 25 341 28 111 29 475 30 240 31 152 30 425 79% Debt securities issued 276 714 1 117 719 905 681 344 297 1% Total liabilities 26 712 29 387 29 917 31 681 33 692 34 110 34 200 33 640 87% Total Shareholders' equity 4 753 4 968 5 459 5 518 5 643 5 497 5 179 4 907 13% (*) Including loans and advances from customers and receivables from finance leases 22
Bank Pekao on the Warsaw Stock Exchange Bank Pekao S.A. on the Warsaw Stock Exchange (WSE) Bank Pekao SA is listed on the Warsaw Stock Exchange and London Stock Exchange (GDRs program) The third largest bank on WSE in terms of market capitalisation (7.8 bln EUR) The biggest bank in terms of value of turnovers and share in turnover among banks WIGBanki, WIG 20, WIG 30, MSCI, CEERIUS Sustainability Index, RESPECT Index Note: Data as at 30 th of June 2017 23