Slide 1: Results of BRE Bank Group Q1 2013
Results of BRE Bank Group Q1 2013 A solid start to 2013 Management Board of BRE Bank SA Presentation for Investors and Analysts April 30, 2013
Slide 2: Key highlights of Q1/13 at BRE Bank Group
Key highlights of Q1/13 at BRE Bank Group Profits making a strong start to the year 1 Net income at PLN 323.9 M, up 18.8% QoQ and down 2.2% YoY Cyclically lower core revenues balanced by cost containment and strong risk management Core income under cyclical pressure NII and NFC at PLN 701 M, d
Slide 3: Agenda
Agenda Summary of Q1/13 Analysis of Q1/13 Results Macroeconomic Update & Outlook Appendix Additional Information: Selected Financial Data Detailed Results of Business Lines Summary of 2012-2016 Strategy 3
Slide 4: Summary of Q1/13 Results in BRE Bank Group
Summary of Q1/13 Results in BRE Bank Group Key Financials in PLN M Q1/13 Q4/12 Change Q1/Q4 Q1/12 BRE Analyzer Core income 701.2 750.8 -6.6% 761.6 Total income 829.2 822.9 +0.8% 916.3 Total costs (401.7) (434.0) -7.5% (392.1) Loan Loss Provisions (27.7) (89.0) -68.9% (111.8) Profit before tax 399.9
Slide 5: Development of Loans to Clients
Summary of Q1/13 in BRE Bank Group Development of Loans to Clients Stable lending despite economic slowdown Development of Gross Loans (PLN M) BRE Analyzer +2.2% +2.3% -0.6% QoQ YoY 71,827 -1.5% 70,436 69,588 69,170 67,687 3,271 3,169 3,366 3,017 4% 3,386 5% -10.3% -10.9% 28,374 30,727 28,405 27,922
Slide 6: Development of Deposits
Summary of Q1/13 in BRE Bank Group Development of Deposits Deposit volumes very resilient despite aggressive cuts in pricing Development of Deposits (PLN M) BRE Analyzer +17.8% +0.9% +15.0% +0.8% QoQ YoY 57,229 57,984 58,532 614 501 794 1% 52,190 49,705 578 469 1% +58.4% +69.3% 24,249 22,647 39% 27,
Slide 7: Funding structure details
Summary of Q1/13 in BRE Bank Group Funding structure details A diversified funding mix and improving liquidity BRE Bank Group’s structure of funding BRE Bank Group’s funding strategy as of March 31, 2013 Other Retail Funding needs reduced by CHF loan book repayments (c. CHF 350-400 M per annum) Su
Slide 8: Business Development: Corporates & Financial Markets
Summary of Q1/13 in BRE Bank Group Business Development: Corporates & Financial Markets Corporate volumes reflecting cautious stance of clients Loans (PLN M) Deposits (PLN M) +4.3% +6.5% -1.7% -6.6% 28,405 27,922 24,249 26,766 22,647 1,568 1,658 21,259 3,707 1,523 3,733 2,989 3,614 3,812 3,188 Other
Slide 9: Business Development: Retail Banking
Summary of Q1/13 in BRE Bank Group Business Development: Retail Banking Solid deposit growth supported by very strong client momentum Loans (PLN M) Deposits (PLN M) +1.9% +25.4% +1.1% +5.6% 37,535 37,817 38,231 33,234 35,091 7,898 8,645 8,863 63 27,977 53 3,123 3,714 3,714 39 12,150 12,122 9,260 Non
Slide 10: Agenda
Agenda Summary of Q1/13 Analysis of Q1/13 Results Macroeconomic Update & Outlook Appendix Additional Information: Selected Financial Data Detailed Results of Business Lines Summary of 2012-2016 Strategy 10
Slide 11: Income of BRE Bank Group
Analysis of Q1/13 Results Income of BRE Bank Group Total revenues stable despite rate cut pressures on interest income BRE Bank Group’s Income (PLN M) BRE Analyzer -9.5% QoQ YoY 916.3 921.2 917.7 +0.8% 41.0 30.8 5.4 24.5 16.0 20.5 822.9 829.2 99.5 3.1 97.7 2.6 83.3 11.2 76.1 51.5 -0.4% -22.4% 0.0 0.
Slide 12: Special topic: Managing the Bank's NII in a declining rate environment
Special topic Managing the Bank’s NII in a declining interest rate environment Proactive management of the deposit base Comfortable liquidity position Retail banking Corporate banking Loans to Deposits ratio 125.1% Strategic target Change Q1/13 v. Q4/12 in PLN M 115.7% 113.9% +1,819 ≈115% -45 +28 -1
Slide 13: Costs of BRE Bank Group
Analysis of Q1/13 Results Costs of BRE Bank Group Focus on effective cost management continues to bear fruits Overhead Costs + Depreciation & Amortisation of BRE Bank Group (PLN M) BRE Analyzer +2.4% QoQ YoY -7.5% 428.4 434.0 406.8 20.3 22.7 401.7 +14.5% +4.0% 392.1 24.8 45.3 51.4 26.0 25.0 50.6 44.
Slide 14: Loan Portfolio Quality
Analysis of Q1/13 Results Loan Portfolio Quality Risk indicators showing resilience in an economic downturn BRE Bank’s NPL Ratio Value of impaired loan portfolio of BRE Bank Group (%) (PLN M) 8.8% 8.8% 8.9%* +7.0% 8.4% 8.6% +0.2% 3,756 3,632 3,641 3,402 3,445 5.7% 5.5% 5.5% 5.2% 5.1% Q1/12 Q2/12 Q3/
Slide 15: Loan Loss Provisions
Analysis of Q1/13 Results Loan Loss Provisions Benefiting from stable asset quality and a conservatively provisioned loan book BRE Bank Group’s loan loss provisions (PLN M) -75.3% 79 Retail banking provisioning continues 67 65 52 to remain stable reflecting a robust loan portfolio despite the slow
Slide 16: Key Regulatory Ratios
Analysis of Q1/13 Results Key Regulatory Ratios Capitalisation and liquidity surpassing all regulatory requirements and supporting growth plans BRE Bank Group’s Capital Adequacy Ratio BRE Bank’s LCR and NSFR 208% 18.7% 18.9% 16.9% 16.2% 15.4% 5.7% 5.4% 14.8% 146% 5.3% 5.0% 129% 4.5% 4.7% 118% 116% 1
Slide 17: Detailed Development of Core Tier 1 ratio and CAR
Analysis of Q1/13 Results Detailed Development of Core Tier 1 ratio and CAR BRE Bank Group’s Core Tier 1 Ratio (%) +0.22 +0.01 13.51 +0.37 -0.09 +1.79 13.00 +0.37 +0.02 -0.10 11.21 10.92 Q3/12 Change in FX impact Other Q4/12 STA AIRB RWA Q4/12 Change in FX impact Net profit Other Q1/13 business on R
Slide 18: Agenda
Agenda Summary of Q1/13 Analysis of Q1/13 Results Macroeconomic Update & Outlook Appendix Additional Information: Selected Financial Data Detailed Results of Business Lines Summary of 2012-2016 Strategy 18
Slide 19: Macroeconomic Update (1/2)
Macroeconomic Update (1/2) Strong cyclical slowdown underway GDP forecast (% YoY) – BRE, NBP projections, consensus Consumption, real wage bill and income (% YoY) 5,0 5.0 14% 12% 4,0 4.0 10% 3,0 3.0 8% 6% 2,0 2.0 4% 1.0 1,0 2% 0% 0.0 0,0 -2% Q1'09 Q3'09 Q1'10 Q3'10 Q1'11 Q3'11 Q1'12 Q3'12 Q1'13 Q3'1
Slide 20: Macroeconomic Update (2/2)
Macroeconomic Update (2/2) Subdued credit action; reconstruction of savings rate Corporate loans and deposits (% YoY) Household loans and deposits (% YoY) 40% 70% 30% 60% 50% 20% 40% 10% 30% 0% 20% 10% -10% 0% -20% -10% Jan-08 Aug-08 Mar-09 Oct-09 May-10 Dec-10 Jul-11 Feb-12 Sep-12 Jan-08 Aug-08 Mar
Slide 21: 2013 Outlook – BRE Bank Group beyond Q1/13
2013 Outlook – BRE Bank Group beyond Q1/13 Implementation of the „One Bank” strategy to ensure sustainable 1 outperformance in an evolving client and regulatory environment Strong capital and ample liquidity underpinning the balance sheet 2 and supporting strategic initiatives Revenue generation to
Slide 22: 2013 in forecasts and what it means for BRE Bank Group
2013 in forecasts and what it means for BRE Bank Group Key economic indicators Impact on BRE Bank 2012 2013F NIM (Negative) GDP growth (YoY) 2.0% 1.0% Pressure on deposit margins as rates decrease, but: Domestic demand (YoY) 0.1% 1.1% Proactive deposit management Private consumption (YoY) 0.5% 1
Slide 23: Agenda
Agenda Summary of Q1/13 Analysis of Q1/13 Results Macroeconomic Update & Outlook Appendix Additional Information: Selected Financial Data Detailed Results of Business Lines Summary of 2012-2016 Strategy 23
Slide 24: Appendix
Appendix Additional Information: Page No. Detailed Results of the Business Lines & Update on Strategy Page No. Selected Financial Data & Historical Performance Consolidated Profit and Loss Account under IFRS 26 Retail Banking 40-45 Consolidated Statement of Financial Position 27 Summary of Q4/12: Fi
Slide 25: Appendix: Additional Information: Selected Financial Data
Appendix Additional Information: Selected Financial Data 25
Slide 26: Consolidated Profit and Loss Account under IFRS
Summary Historical outlook Appendix Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Business Lines Consolidated Profit and Loss Account under IFRS 2012-2016 Strategy PLN thou. Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 By quarter Net interest income 539,304 565,764 573,08
Slide 27: Consolidated Statement of Financial Position
Summary Historical outlook Appendix Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Business Lines Consolidated Statement of Financial Position 2012-2016 Strategy Assets (PLN thousand) Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Cash and balances with Central Bank 1 680 52
Slide 28: BRE Bank Group's Ratios
Summary Historical outlook Appendix Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Business Lines BRE Bank Group’s Ratios 2012-2016 Strategy Financial Ratios Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Net Interest Margin YtD 2.38% 2.43% 2.43% 2.39% 2.08% Cost to Income R
Slide 29: BRE Bank Group's historical performance (1/3)
Summary Historical outlook Appendix Profit & Loss Balance Sheet BRE Bank Group’s historical performance (1/3) Subsidiaries Business Lines Net interest income Net fee and commission income 2012-2016 Strategy (PLN M) (PLN M) NIM 2.3 2.3 2.2 2.5 2.4 2.4 2.1 +11% +13% 840.0 839.9 745.9 2.167,2 2.233,6 -
Slide 30: BRE Bank Group's historical performance (2/3)
Summary Historical outlook Appendix Profit & Loss Balance Sheet BRE Bank Group’s historical performance (2/3) Subsidiaries Business Lines Operating costs Pre-provision income 2012-2016 Strategy (PLN M) (PLN M) +2% 55.1% 54.2% 51.8% 47.7% 46.4% 42.8% 48.4% C/I ratio +14% 1,617.3 1,680.3 1,661.4 1,550
Slide 31: BRE Bank Group's historical performance (3/3)
Summary Historical outlook Appendix Profit & Loss Balance Sheet BRE Bank Group’s historical performance (3/3) Subsidiaries Business Lines Total assets Equity and CAR 2012-2016 Strategy (PLN B) (PLN M) +11% 10.04% 11.50% 15.90% 14.96% 18.73% 16.93% 18.87% CAR +5% +18% +24% 98.9 102.2 103.1 90.0 92.6
Slide 32: Net Interest Income & Margin
Summary Historical outlook Appendix Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Net Interest Income & Margin Business Lines 2012-2016 Strategy Interest Income Structure Interest Expense Structure (PLN M) (PLN M) 1,144.5 1,159.7 604.2 1,093.4 53.9 571.4 12
Slide 33: Fee and Commission Income
Summary Historical outlook Appendix Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Fee and Commission Income Business Lines 2012-2016 Strategy Commission Income Structure (PLN M) QoQ YoY 324.7 320.6 +30.2% -1.1% 318.4 310.3 308.9 38.0 35.6 43.3 28.9 37.7 12%
Slide 34: Trading Income
Summary Historical outlook Appendix Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Trading Income Business Lines 2012-2016 Strategy Net Trading Income Structure (PLN M) 97.7 99.5 QoQ YoY 9.1 18.8 83.3 76.1 9.5 75.8 6.8 +/- -63.7% 90.4 78.9 80.9 73.8 69.0 -14
Slide 35: Balance Sheet Analysis: Assets & Liabilities
Summary Historical outlook Appendix Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Balance Sheet Analysis: Assets & Liabilities Business Lines 2012-2016 Strategy Structure of Assets Structure of Liabilities (PLN B) (PLN B) 102.2 103.1 102.2 103.1 99.8 99.8 7
Slide 36: Balance Sheet Analysis: Currency Structure
Summary Historical outlook Appendix Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Balance Sheet Analysis: Currency Structure Business Lines 2012-2016 Strategy Currency Structure of Loans (net) Currency Structure of Amounts due to banks and customers1) (PLN
Slide 37: Balance Sheet Analysis: Structure of loans and deposits
Summary Historical outlook Appendix Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Balance Sheet Analysis: Structure of loans and deposits Business Lines 2012-2016 Strategy BRE Bank Group’s Loan Structure BRE Bank Group’s Deposit Structure as of March 31, 20
Slide 38: Balance Sheet Analysis: Loan Portfolio Structure
Summary Historical outlook Appendix Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Balance Sheet Analysis: Loan Portfolio Structure Business Lines 2012-2016 Strategy BRE Bank Group’s Sector Exposure by Industry as of March 31, 2013 Households Real estate man
Slide 39: Results of Subsidiaries
Summary Historical outlook Appendix Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Results of Subsidiaries Business Lines 2012-2016 Strategy Profit before Tax of Consolidated Subsidiaries (PLN M) 21.9 Q1 2012 Q1 2013 16.5 15.2 12.2 11.8 7.6 5.9 4.9 4.3 3.6 4
Slide 40: Detailed Results of the Business Lines Q1/13: Retail Banking
Summary Historical outlook Appendix Profit & Loss Balance Sheet Subsidiaries Business Lines 2012-2016 Strategy Detailed Results of the Business Lines Q1/13 Retail Banking 40
Slide 41: Retail Banking Summary of Q1/13: Financial Results
Summary Historical outlook Appendix Profit & Loss Balance Sheet BRE Bank Retail Banking Subsidiaries Summary of Q1/13: Financial Results Business Lines 2012-2016 Strategy Profit before Tax of Retail Banking Segment1) Number of Retail Outlets (by quarter, PLN M) 266 263 265 262 258 -12.8% 35 35 35 35
Slide 42: Sales of New Retail Loans to Individuals
Summary Historical outlook Appendix Profit & Loss Balance Sheet BRE Bank Retail Banking Subsidiaries Sales of New Retail Loans to Individuals Business Lines 2012-2016 Strategy Quarterly Sales of Mortgage Loans Quarterly Sales of Non-Mortgage Loans (PLN M) (PLN M) +27% -0.8% 516.5 -78% 76.4 438.8 168
Slide 43: Mortgage Loans: Portfolio Structure and Quality
Summary Historical outlook Appendix Profit & Loss Balance Sheet BRE Bank Retail Banking Subsidiaries Mortgage Loans: Portfolio Structure and Quality Business Lines 2012-2016 Strategy BRE Bank’s Mortgage Loan Portfolio Currency Structure of Retail Banking Mortgage Loan Portfolio (Retail Banking1) loa
Slide 44: BRE Bank Hipoteczny (BBH)
Summary Historical outlook Appendix Profit & Loss Balance Sheet BRE Bank Retail Banking Subsidiaries BRE Bank Hipoteczny (BBH) Business Lines 2012-2016 Strategy Loan Portfolio (PLN M) Profit before Tax Balance-sheet Exposure (net value) (PLN M) +2.9% +1.3% 4,115 4,128 4,108 4,160 4,044 47 48 47 46 4
Slide 45: BRE Ubezpieczenia (BRE Insurance)
Summary Historical outlook Appendix Profit & Loss Balance Sheet BRE Bank Retail Banking Subsidiaries BRE Ubezpieczenia (BRE Insurance) Business Lines 2012-2016 Strategy Bancassurance Retail Direct Insurance (Internet platform) Gross Written Premiums (PLN M) Gross Written Premiums (PLN M) -46% +5% 61
Slide 46: Detailed Results of the Business Lines Q1/13: Corporates & Financial Markets
Summary Historical outlook Appendix Profit & Loss Balance Sheet Subsidiaries Business Lines 2012-2016 Strategy Detailed Results of the Business Lines Q1/13 Corporates & Financial Markets 46
Slide 47: Corporates and Financial Markets Summary of Q1/13: Financial Results
Summary Historical outlook Appendix Profit & Loss Balance Sheet Corporates and Financial Markets Subsidiaries Summary of Q1/13: Financial Results Business Lines 2012-2016 Strategy Result before Tax of the Segment Corporate Branch Network (by quarter, PLN M) Offices Branches +10.1% +28.9% 48 48 48 48
Slide 48: Leasing and Factoring
Summary Historical outlook Appendix Profit & Loss Balance Sheet Corporates and Institutions Subsidiaries Leasing and Factoring Business Lines 2012-2016 Strategy Profit before Tax (PLN M) Factoring contracts (PLN M) -34.9% -3.0% 5.7 2,624.4 2,545.1 1.4 823.9 Factoring 3.7 Transfinance 836.0 Companies
Slide 49: Market Shares
Summary Historical outlook Appendix Profit & Loss Balance Sheet Trading and Investment Activity Subsidiaries Business Lines Market Shares 2012-2016 Strategy BRE Bank’s Market Share1) BRE Bank in the Market for Non-Treasury Debt2) in Investment Banking Services for Q1/13 (PLN M) 31,949 9.9% 25,567 29
Slide 50: Dom Inwestycyjny BRE Banku (DI BRE)
Summary Historical outlook Appendix Profit & Loss Balance Sheet Trading and Investment Activity Subsidiaries Business Lines Dom Inwestycyjny BRE Banku (DI BRE) 2012-2016 Strategy Number of Accounts with DI BRE DI BRE Equities Trading WSE Q1/13 (thou.) (PLN M) DI BRE accounts 51.5 -11% eBroker (mBank
Slide 51: BRE Bank Group's 2012-2016 Strategy Summary: One Bank for Customers and Employees
Summary Historical outlook Appendix Profit & Loss Balance Sheet Subsidiaries Business Lines 2012-2016 Strategy BRE Bank Group’s 2012-2016 Strategy Summary One Bank for Customers and Employees 51
Slide 52: Vision of BRE Bank Group
Summary Historical outlook BRE Bank Group’s 2012-2016 Strategy Summary Profit & Loss Balance Sheet Subsidiaries Vision of BRE Bank Group Business Lines 2012-2016 Strategy One Bank for Customers and Employees Organic growth supported by cutting-edge technology, anchored on a healthy balance sheet str
Slide 53: Highlights of BRE Bank Group's Strategy
Summary Historical outlook BRE Bank Group’s 2012-2016 Strategy Summary Profit & Loss Balance Sheet Subsidiaries Highlights of BRE Bank Group’s Strategy Business Lines 2012-2016 Strategy Key initiatives of the Strategy Better use of Unification of branding infrastructure policy Outlets availabl
Slide 54: One brand
Summary Historical outlook BRE Bank Group’s 2012-2016 Strategy Summary Profit & Loss Balance Sheet Subsidiaries One brand Business Lines 2012-2016 Strategy The Bank will strengthen its market image under mBank brand Current situation Future benefits 3 main brands of BRE Bank Group: mBank, BRE Ba
Slide 55: One Network
Summary Historical outlook BRE Bank Group’s 2012-2016 Strategy Summary Profit & Loss Balance Sheet Subsidiaries One Network Business Lines 2012-2016 Strategy Integrated distribution network available to all clients Current situation Number of branches Future benefits PKO BP 1,198 Limited access to
Slide 56: Financial Performance Targets
Summary Historical outlook BRE Bank Group’s 2012-2016 Strategy Summary Profit & Loss Balance Sheet Subsidiaries Financial Performance Targets Business Lines 2012-2016 Strategy An efficient business platform supported by a strong balance sheet Loan to Deposit Assets Income Growth Cost/Income Ratio CA
Slide 57: Further enhancing our reporting standards: BRE Analyzer
Further enhancing our reporting standards BRE Analyzer An innovative and convenient tool to analyse BRE Bank Group’s financial and business data Analyse, customise, export and print selected data on BRE Bank Group, covering all periods since Q1/06 in quarterly and annual series Includes FX Compreh
Slide 58: Contact details
Contact details BRE Bank’s Investor Relations at your service: Relacje.inwestorskie@brebank.pl Wojciech Chmielewski Direct dial: +48 22 829 14 34 Head of Investor Relations Fax: +48 22 829 15 19 E-mail: wojciech.chmielewski@brebank.pl Paweł Lipiński Direct dial: +48 22 829 15 33 Investor Relations O