Welcome Page 1
Content Macroeconomics Banking Sector in Bulgaria Raiffeisen Bank International Raiffeisenbank (Bulgaria) EAD Page 2
Raiffeisen Research s forecast for Bulgaria Economic growth is expected to reach 3.3% in 2016, due to stronger dynamics in household consumption and moderate growth in exports; Labour market will improve further, as the average unemployment rate is anticipated to decrease slightly to 7.8% in 2016 (9.2% for 2015); Average annual inflation around -0.6 % is expected in 2016, mainly due to low consumer price environment in the euro area and expected low oil prices; FDI inflow is forecast at around EUR 1.7 bn not very high level, which however guarantees a balanced and sustainable economic development; Public debt is among the lowest in the EU, despite the emission of EUR 2.0 bn in March 2016 under the in 2015 established EUR 8 bn Medium Term Note (MTN) Programme the public debt to GDP ratio is forecast to reach 29.0% in 2016. 2014 2015 2016e 2017e Real GDP (% YoY) 1.3 3.6 3.3 3.0 Inflation (annual average, % YoY) -1.4-0.1-0.6 1.6 Unemployment rate (avg, %) 11.4 9.2 7.8 7.4 General budget balance (% of GDP) -3.6-2.9 0.3-1.5 Public debt (% of GDP) 26.4 25.6 29.0 29.0 Net foreign direct investment (EUR billion) 0.8 1.5 1.7 1.8 Page 3
Banking market in Bulgaria Local banking market as of 30 September 2016 Banking system s balance sheet assets increased by 5.08% YoY to BGN 89.8bn. Banks credit portfolios decreased by 1.45% YoY to BGN 54.14bn, due to the decrease of both retail and corporate lending by 0.3% and 2%, respectively. The deposit base increased by 7.29% YoY reaching BGN 72bn, bolstered by the increase in retail deposits (6.29% YoY) as well as the deposits from corporates (9.08% YoY). In the end of September 2016 the Banking sector reported net profit of BGN 1.1 bn representing an increase by BGN 278.56 mn compared to September 2015. Capitalization and Liquidity The banking system remained stable, liquid and well capitalized with good capital buffers, significantly above regulatory minimum of 13.5%. The liquid assets ratio as of September 2016 was 37.35%. The BNB requirements to the capital position strength have also been met in the end-september 2016 the capital adequacy ratio rose up to 22.79%. Page 4
Banking market in Bulgaria Non-performing Exposures (NPEs) levels Trends The amount of non-performing exposures in the banking system amounted to BGN 10.47 bn at the end of September 2016, contracting by BGN 351 mn, compared to the same period in 2015. The risk costs of the banking sector decreased by 3% YoY in the second quarter of 2016 to BGN 597.95mn. BNB set the level of the buffer, applicable to the total risk exposure amount for other systemically important institutions (O-SIIs). Ten banks were Identified as O-SIIs and in addition to the already imposed regulatory capital ratios an additional buffer will be added, which, depending on their importance, will reach values from 0.5% to 1% of their risk exposures. Credit growth rate is expected to slowly increase as the share of NPLs (90 dpd) would gradually decline; Deposit base is projected to increase although with a decelerating pace and remain a solid source of funding. Page 5
Raiffeisen Bank International Page 6
Raiffeisen Bank International (RBI) ~ 14,2 million clients ~ 2,600 branches ~ 51,000 employees > 25 years 14 markets 1 Group Page 7
Raiffeisenbank (Bulgaria) EAD Page 8
Raiffeisenbank (Bulgaria) EAD Established in 1994 as the first green-field foreign investment in the Bulgarian banking sector, with 100% foreign capital More than 638,720 clients Branches: Currently 147 Universal bank with 3 business segments: Corporate Banking (large, medium and small companies) Retail Banking (private individuals, micro companies and entrepreneurs) Treasury & Investment Banking Page 9
Raiffeisenbank (Bulgaria) EAD key data Raiffeisenbank (Bulgaria) EAD key data 30.09.2016 Total assets (in BGN million) 6,294 Loans and advances to customers (in BGN million) 3,975 Deposits (in BGN million) 4,682 Profit after tax (in BGN million) 121.1 Number of clients 638,720 Number of branches 147 Number of employees 2,784 Page 10
Raiffeisenbank (Bulgaria) EAD Vision and Mission Vision Mission Raiffeisenbank (Bulgaria) EAD to be one of the top-three banks in all target customer segments across the country We seek long-term customer relationships and are a friendly, flexible and constructive partner for our customers. We are proactive and quick in delivering top-quality products. We are an efficient and lean organization. We exploit synergies within the bank and with all our subsidiaries to the fullest extent possible. Prudent risk management is a key pillar throughout our organization and processes. To adhere to the highest standards and corporate culture. We empower our employees to be entrepreneurial, to show initiative, and we foster their development. We are the employer of first choice, and we put special focus on the promotion of key staff and best talent. As part of the RBI Network, we contribute to the achievement of the overall Group objectives and generate sustainable and above-average return on equity. Page 11
Corporate Banking Page 12
Corporate Banking Market share in corporate lending close to 6,8 %, 5 th place in the bank system Market share in attracted funds 7,82%, 3 rd place in the bank system Regional Centers covering the whole country Full range of bank products and services, including: Factoring, trade finance, cash management, securities and currency trading. Except for all the traditional types of lending, The Bank offers loans guaranteed under the European Investment Fund Programmes (COSME, InnovFinn, SME Initiative), as well as the National Guarantee Fund Programmes. 30.09.2016 Number of clients 7,589 Loan portfolio (in BGN million) 1,832 Deposits (in BGN million) 1,374 Page 13
Retail Banking Page 14
Consumer Banking One of the leading banks in the consumer banking segment: Customer base consists of 565 thousand active clients. In TOP 5 banks in terms of new Consumer loans volumes in 3Q/2016. Growth in new mortgage volume market share in 3Q/2016 reached constant market share around 7%. Attracted funds by individuals exceed BGN 2,621 million. The deposit market share is 5.74%. 12% increase in card transactions on POS of the Bank and the number of installed POS terminals at the end of the year, totaling more than 9,700. The number of ATMs of the Bank exceeded 580. 30.09.2016 Number of clients 565,000 Loan portfolio (in BGN million) 1,552 Deposits (in BGN million) 2,621 Number of issued payment cards 491,000 Page 15
Micro Business One of the leading banks in Micro segment Raiffeisenbank (Bulgaria) services a growing base of more than 65 000 micro companies. Active role in providing Bulgarian micro business with access to various EU and local financial/guarantee schemes through agreements with National Guarantee Fund and EIF (InnovFin, SME Initiative, COSME) and specialized products for operational programs. Modern banking services for transactional business of micro companies simplified package programs and on-line package program advisor, on-line and mobile banking. Specialized personal customer approach innovative servicing model for micro customers. 20 Micro Business centers, specialized point of service and consulting. Business centers are situated in the main cities. 30.09.2016 Number of clients 65 884 Loan portfolio (in BGN million) 492.55 Deposits (in BGN million) 595.98 Page 16
Capital Markets Page 17
Capital Markets Among Top 3 capital markets banks in Bulgaria: One of the market leaders in foreign currency exchange with customers and banks; Active primary dealer and market maker for State Securities; Trend-setting bank in financial markets services: Leading provider of FX risk-mitigating instruments and practices; Delivering modern and hi-tech foreign exchange solutions; Pioneering bank in IB & Equity operations in terms of market coverage and product range; First choice Custody bank for local and international clients. Page 18
Subsidiaries Page 19
Raiffeisen Leasing Bulgaria OOD Shareholders: Raiffeisenbank (Bulgaria) EAD (24,5%) Raiffeisen Leasing International GmbH (75,5%) Products and services: New and used vehicles Construction and agricultural equipment Light and heavy trucks, trailers and motor trucks Machinery and equipment Real estate leasing Serving all main client segments: corporate, small and medium enterprises and private individuals One of the leading leasing companies 8.97% market share as of Q3 2016 Q3 2016 Number of active contracts 9,107 Portfolio (in BGN million) 298.2 Page 20
Raiffeisen Asset Management Second place on the local market 15,37% market share as of 30.09.2016 Net asset value of four locally managed funds BGN 152,68 million Raiffeisen Conservative Fund Bulgaria is the largest mutual fund in Bulgaria, net asset value as of 30.09.2016 - BGN 91,10 million Raiffeisen (Bulgaria) Active Protection is the fourth largest mutual fund in Bulgaria, net asset value as of 30.09.2016 EUR 23,96 million Distribution of 11 Mutual funds managed by Raiffeisen Capital Management, Vienna - leading European asset management company Page 21
Raiffeisen Insurance Broker Established March 2006 Owner Raiffeisenbank (Bulgaria) EAD 100% Premium income BGN 11.9 million Products and services: RIB offers Insurance products of 14 insurance companies Analyses of the insurance market Understanding of the customers specific needs Proactive and innovative solutions in the bancassurance area Customers oriented taller made approach Claims handling services Insurance expertise team, result oriented Insurance zones Located in some of the branches of RBBG Wide range of insurance products of leading insurance companies Page 22
Raiffeisenbank (Bulgaria) EAD Network, Positioning & CSR Page 23
Large Branch network in six regions Region # branches Sofia East and Southwest 36 Sofia West 24 South Central 23 Southeast 23 Northeast 24 Northwest 17 Page 24
17,908.8 11,626.2 8,576.0 7,146.7 6,566.0 6,294.0 5,601.2 4,856.7 2,897.4 2,871.3 Bank s position in terms of Total Assets 20,000 16,000 12,000 8,000 4,000 0 Bank A Bank B Bank C Bank D Bank E Raiffeisenbank (Bulgaria) Bank G Bank H Bank I Bank J As of 30 September 2016, in BGN million, source: BNB Page 25
2,648.8 1,532.7 1,328.9 1,116.8 901.2 810.1 731.4 668.2 404.7 389.6 Bank s position according to Total Equity 3,000 2,500 2,000 1,500 1,000 500 0 Bank A Bank B Bank C Bank D Raiffeisenbank (Bulgaria) Bank F Bank G Bank H Bank I Bank J As of 30 September 2016, in BGN million, source: BNB Page 26
265.8 247.0 121.1 93.0 87.9 74.4 55.1 30.7 30.1 27.9 Bank ranking in terms of Net Profit 300 250 200 150 100 50 0 Bank A Bank B Raiffeisenbank (Bulgaria) Bank D Bank E Bank F Bank G Bank H Bank I Bank J As of 30 September, 2016, in BGN million, source: BNB Page 27
Corporate Social Responsibility Raiffeisenbank (Bulgaria) as a part of Raiffeisen Banking Group operates in accordance with Raiffeisen values - which are the pillars of our business model for helping people to help themselves. This is a key part of our identity to function in sustainable manner as a group in which together we are stronger. In 2012 and 2013 Raiffeisenbank (Bulgaria) expanded the scope of its corporate responsibility policy by supporting a wide range of projects of governmental and nongovernmental organizations following Raiffeisen s mutual help principle and the support for practices, which are important for the development of society. For seventh year in a row Raiffeisenbank (Bulgaria) initiates and organizes its own allyear-round charity campaign Choose to help. Near BGN 2.3 million in donations for sustainable projects; Over 185 projects in the spheres of healthcare, the social sphere, culture, environment protection; Choose to help gathered 14 most prestigious CSR Awards. www.izberi.rbb.bg Page 28
H. Stepic CEE Charity supported by Raiffeisen Bank International Founded in 2007 Founder: Herbert Stepic, former CEO of Raiffeisen Bank International Aim: improvement of living conditions of children, young people and women in poorly developed regions of Central and Eastern Europe In Bulgaria: Since 2007 Raiffeisenbank (Bulgaria) traditionally supports the H. Stepic CEE Charity project in Dobrich Day Care Center for Disadvantaged Children. The day care center in Dobrich is able to host 30 children. The aim is to motivate these children to go to school and prepare them for a life in a social system; In 2015 the Foundation "Stepic" with "Caritas Bulgaria" initiate a new project named Education for an equal start. Page 29
Thank you for your attention! Page 30