Mbank Sa · GPW:MBK
Mbank Sa — BRE Bank — Q1 2011 Earnings Presentation
59 slides from Mbank Sa's earnings presentation, Apr 29, 2011
Slide 1: Results of BRE Bank Group Q1 2011
Results of BRE Bank Group Q1 2011 Strong performance momentum continues Management Board of BRE Bank S.A. Presentation for Investors and Analysts 29 April 2011
Slide 2: Agenda
Agenda Summary of Q1/11 Analysis of Q1/11 Results 2011 Outlook Appendix Detailed Results of Business Lines Additional Information: Selected Financial Data 2
Slide 3: Highlights of Q1/2011 in BRE Bank Group
Highlights of Q1/2011 in BRE Bank Group Record quarterly core income and continued growth momentum 1 NII and NFC at PLN 714 M, up 26.5% YoY and 1.5% QoQ; 4th consecutive quarter of core income growth Disciplined investment in business growth 2 YoY income growth of 20.7% v. YoY cost growth of 15.3%;
Slide 4: Analysis of Results, Q1/2011: Key Financials
Analysis of Results, Q1/2011 Key Financials Q1/2011 Q4/2010 Change Q1/Q4 Q1/2010 Core income1) 713.9 703.5 +1.5% 564.4 Total income2) 831.5 844.4 -1.5% 689.0 Total cost (408.4) (454.6) -10.2% (354.1) Operating profit3) 423.1 389.8 +8.5% 334.8 Net provisions (114.1) (126.0) -9.4% (177.1) Profit befor
Slide 5: Development of Loans to Clients
Summary of Q1/2011 in BRE Bank Group Development of Loans to Clients Development of Gross Loans Structure of Gross Loans Portfolio (PLN B) as at 31 March 2011 +0.2% BRE -others BRE - 1.0% 61.8 61.9 Individual BRE Bank 1.1 1.2 -0.1 +0.3 -0.1 clients Hipoteczny -0.4% -1.3% 54.0% 6.2% +1.1% QoQ QoQ QoQ
Slide 6: Development of Deposit Base
Summary of Q1/2011 in BRE Bank Group Development of Deposit Base Development of Deposits Structure of Amounts Due to Clients (PLN B) as at 31 March 2011 BRE - BRE Bank -1.8% Individual Hipoteczny clients 0.4% 47.4 46.5 54.0% 0.1 0.2 Intermarket +0.4 -1.3 0.0 Bank + Magyar +1.8% -6.3% +2.3% BRE Bank
Slide 7: Business Development: Corporates & Institutions
Summary of Q1/2011 in BRE Bank Group Business Development: Corporates & Institutions Revenue Net Interest Income Net Commission Income Net interest income decreased (revenue before costs (PLN M) (PLN M) by 2.4% QoQ and increased by 59.4% excl. LLP, PLN M) YoY supported by loan growth and +33.0% +59.
Slide 8: Business Development: Retail Banking
Summary of Q1/2011 in BRE Bank Group Business Development: Retail Banking Revenue Net Interest Income Net Commission Income (revenue before costs (PLN M) (PLN M) Highest segment revenue in history excl. LLP, PLN M) with net interest income and net fee and commission income reaching +16.0% +14.5% +37
Slide 9: Agenda
Agenda Summary of Q1/11 Analysis of Q1/11 Results 2011 Outlook Appendix Detailed Results of Business Lines Additional Information: Selected Financial Data 9
Slide 10: Income of BRE Bank Group
Analysis of Results, Q1/2011 Income of BRE Bank Group BRE Bank Group Income QoQ & YoY Income structure by Business Line (PLN M) in Q1/11 +20.7% -1.5% Trading and Investment +0.7% +3.5% -8.3% -207.1% -30.8% QoQ QoQ QoQ QoQ QoQ Activity; PLN 112 M; Corporates 13.5% -4.3 26.3 and 95.6 Institutions; 0.0
Slide 11: Costs of BRE Bank Group
Analysis of Results, Q1/2011 Costs of BRE Bank Group Overhead Costs + Depreciation of BRE Bank Group QoQ & YoY Cost Structure by Business Line (PLN M) in Q1/11 +15.3% Trading and Retail -10.2% Investment Banking; Activity; PLN 183 M; -13.1% -17.4% -1.8% +121.3% PLN 46 M; 44.9% QoQ QoQ QoQ QoQ 11.3%
Slide 12: Structure of Loan Loss Provisions
Analysis of Results, Q1/2011 Structure of Loan Loss Provisions BRE Bank Group’s Impairment Losses on Loans and Advances Trends in Q1 2011: (PLN M) - Further improvement of financial -9.4% standing of corporate and retail clients +6.3% QoQ -21.3% QoQ - Cost of risk down to 77 bps 177.1 in Q1/11 126.0
Slide 13: Agenda
Agenda Summary of Q1/11 Analysis of Q1/11 Results 2011 Outlook Appendix Detailed Results of Business Lines Additional Information: Selected Financial Data 13
Slide 14: Macroeconomic update: Economic recovery set to continue
Macroeconomic update Economic recovery set to continue We expect GDP growth in 2011 at 4.3% Investment activity rebounds slower than previously expected GDP, investment, Corporate private consumption investment (% YoY) credit Source: StatOffice Source: NBP Inflation boosted by both recovery and glob
Slide 15: Macroeconomic update: Stabilization in the banking sector
Macroeconomic update Stabilization in the banking sector Slow rebound of lending to corporates. Corporate deposits on Higher interest rates and strong labour market seen as near term decline support for household deposits. Slower credit demand Corporate loans Household loans and deposits, and deposi
Slide 16: 2011 Outlook – BRE Bank Group beyond Q1/11
2011 Outlook – BRE Bank Group beyond Q1/11 1 Continued implementation of 2010-2012 strategy 2 Core revenue growth as key driver of profitability improvement Encouraging asset quality trends 3 but pace and strength of improvement remains uncertain Strong capital and ample liquidity 4 to take full adv
Slide 17: Agenda
Agenda Summary of Q1/11 Analysis of Q1/11 Results 2011 Outlook Appendix Detailed Results of Business Lines Additional Information: Selected Financial Data 17
Slide 18: Appendix
Appendix Additional Information: Page No. Detailed Results of the Business Lines Page No. Selected Financial Data & Business Environment BRE Bank Retail Banking 19-28 P&L acc. to IFRS 42 Summary of Q1/11 20 Profitability of the Business Lines 43 Customer Acquisition & Volume Trends 21-22 Results of
Slide 19: Detailed Results of the Business Lines Q1/11: Retail Banking
Appendix Detailed Results of the Business Lines Q1/11 Retail Banking 19
Slide 20: BRE Bank Retail Banking: Summary of Q1/11 Financial Results
Appendix BRE Bank Retail Banking Summary of Q1/11: Financial Results Profit before Tax of the Segment (by quarter, PLN M) 69.3 57.5 70.9 29.8 68.2 86.7 95.3 -8.7 74.0 61.5 72.7 8.0 108.8 81.5 151.0 114.3 186.3 193.0 Retail Banking PL 163.2 mBank CZ & SK 124.3 125.2 108.2 114.6 98.5 89.9 94.4 96.0 84
Slide 21: Retail Banking (Poland): Customer Acquisition and Volume Trends
Appendix BRE Bank Retail Banking (Poland) Customer Acquisition and Volume Trends Data as at 31.03.2011 End of 12/10 Change End of 03/11 (M) 5 0.0 4 0.4 0.0 3.18 M clients +1.9 % 3.24 M 3 0.6 2 3.96 2.51 1 4.5 M accounts +2.2 % 4.6 M 0 Customers Accounts Private Banking 21.2 B deposits (PLN) +0.9 % 2
Slide 22: Retail Banking Foreign Operations (CZ/SK)
Appendix BRE Bank Retail Banking foreign operations (CZ/SK) Customer Acquisition and Volume Trends Data as at 31.03.2011 End of 12/10 Change End of 03/11 (thou.) 1 000 245.4 800 600 478.1 thou. customers +2.9% 492.1 thou. 400 131.6 702.0 200 360.5 0 Customers Accounts 924.4 thou. accounts +2.5 % 947
Slide 23: Acquisition of Microenterprises
Appendix BRE Bank Retail Banking Acquisition of Microenterprises* 396 thousand microenterprises serviced by BRE Bank Retail Banking Volume of loans granted to microenterprises (PLN M) 1147.6 1971.9 2546.8 2672.4 2889.4 2940.6 2935.6 3018.3 3000 Number of serviced 2500 microenterprises up by 6.0 thou
Slide 24: Deposits & Loans: Market Shares
Appendix BRE Bank Retail Banking Deposits & Loans: Market Shares Household Deposits* Household Loans* 03/11: 03/11: (PLN B) (PLN B) 4.8% 6.4% 35 7% 35 7.0% 6.7% 6.7% 6.6% 6.5% 6.5% 6.5% 6.4% 7% 6.3% 30 6% 30 5.9% 5.2% 5.1% 5.3% 5.2% 5.4% 5.5% 6% 4.9% 5.0% 5.0% 5.0% 4.8% 5.2% 4.7% 5.1% 25 4.6% 5% 25
Slide 25: Mortgage Loans: Portfolio Structure and Quality
Appendix BRE Bank Retail Banking Mortgage Loans: Portfolio Structure and Quality BRE Bank’s Mortgage Loan Portfolio Currency Structure of Retail Banking Mortgage Loan Portfolio (Retail Banking* loans to individuals) (Household Loans) at 31.03.2011 in Poland in Poland, Czech Republic & Slovakia Balan
Slide 26: Distribution Network
Appendix BRE Bank Retail Banking Distribution Network Aspiro Distribution Network MultiBank Branches (in Poland) (in Poland) Total (at the end of period): Total (at the end of period): 103 161 142 134 130 122 115 111 109 131 134 134 133 133 133 134 77 52 58 54 59 61 61 61 62 46 42 44 33 26 21 27 65
Slide 27: BRE Ubezpieczenia (BRE Insurance)
Appendix BRE Bank Retail Banking BRE Ubezpieczenia (BRE Insurance) Bancassurance Retail Direct Insurance (Internet platform) Co-operation with BRE Leasing Gross Written Premium (PLN M) Gross Written Premium (PLN M) Gross Written Premium (PLN M) +86% +59% +5% 302.7 30.3 25.0 162.9 19.1 24.0 1Q 2010 1
Slide 28: Retail Banking (Poland): Clients & Volumes
Appendix BRE Bank Retail Banking (Poland) Clients & volumes Clients Deposits (thou.) (PLN B) +1.9% +0.9% 5 4 5 5 5 592 595 6 592 2.3 2.1 1.8 1.7 603 2.0 570 588 2.1 7 5.5 5.1 5.0 493 2.5 5.7 5.2 5.2 4.4 2511 2581 2644 2296 2371 2436 2035 14.3 14.7 13.8 14.0 13.8 12.7 10.9 31.12.08 31.12.09 31.03.10
Slide 29: Detailed Results of the Business Lines Q1/11: Corporates & Financial Markets
Appendix Detailed Results of the Business Lines Q1/11 Corporates & Financial Markets 29
Slide 30: Corporates and Financial Markets: Summary of Q1/11
Appendix Corporates and Financial Markets Summary of Q1/11: Financial Results Result before Tax of the Segment * Q1/08: Repayment of default loan (by quarter, PLN M) Q2/10 and Q3/10 – partial sale of PZU shareholding 321.0 14.8* 137.7 Vectra 167.6 142.5 117.2 137.2 128.2 86.6 81.1 30.5* 168.6 49.4 1
Slide 31: Corporates and Institutions: Customer Acquisition and Volume Trends
Appendix Corporates and Institutions Customer Acquisition and Volume Trends End of 12/10 Change End of 03/11 corporate 13 271 clients +152 13 423 Enterprises acc. to NBP definition Corporate Loans corporate (PLN B) 25.6 B loans (PLN) +1.1% 25.9* B 12.1 11.6 thereof loans for 13.5 14.3 13.5 B enterpr
Slide 32: Loans & Deposits: Market Share
Appendix Corporates and Institutions Loans & Deposits: Market Share* BRE Bank’s Market Share in Corporate Loans and Deposits 01/06 – 03/11 12,00% Corporate* Deposit Volume (BRE Bank only, PLN B) 10,00% 16.1 15.4 14.2 13.7 14.6 14.6 14.4 14.9 8.7% 12.9 12.7 13.3 12.5 14.0 12.2 13.1 13.3 8,00% 6,00% 6
Slide 33: Client Base and Development of Loans and Deposits
Appendix Corporates and Institutions Client Base and development of Loans and Deposits Corporate Clients’ Loan Volume Corporate Clients: Number and Structure (BRE Bank, PLN B) 12,836 12,783 13,026 13,126 13,271 13,423 16.3 15.6 15.9 15.9 19.5 19.6 K1 1 101 K1 1 114 K1 898 K1 1 062 K1 1 083 K1 993 31
Slide 34: Cash Management
Appendix Corporates and Institutions Cash Management Net Income on Cash Management products +23.4% Cash Management – Strategic Product Line Supporting Long-Term Customer Relations Q1/10 Q1/11 Number of Clients Using Cash Direct Debit Identification of Trade Payments Consolidation Services (thou. of
Slide 35: Products for Local Governments and Products with EU Financing
Appendix Corporates and Institutions Products for local governments and Products with EU Financing Volume of transactions with local Sales of Banking Products governments with EU Financing The volume of transactions with local In Q1/11 the income on products governments increased by 3.9% QoQ sponsor
Slide 36: Factoring Companies Transaction Summary
Appendix Corporates and Institutions Factoring Companies Transaction Summary Transaction background Transaction impacts (PLN M) Transaction details: Before the transaction Sale of 56.24% of Intermarket Bank AG (Austria) to Erste Bank Austria Q1/11 Q4/10 Sale of 50% of Magyar Factor zRt Customer loan
Slide 37: Leasing and Factoring
Appendix Corporates and Institutions Leasing and Factoring Intermarket PLN 8.5 M pre-tax profit in Q1/11 (+49.5% YoY); supported by improving economic environment Profit before Tax (PLN M) Group Companies* PLN 5.5 B of new sales in Q1/11 (+14.3% YoY) Increase of sales visible across all Group compan
Slide 38: BRE Bank Hipoteczny (BBH)
Appendix Corporates and Institutions BRE Bank Hipoteczny (BBH) Loan Portfolio (PLN M) Profit before Tax (PLN M) Balance-sheet Exposure (net value) 4,527 4,427 4,275 4,107 3,889 3,925 3,787 3,769 3,800 74 68 61 59 56 58 54 53 52 726 723 721 -20.9% 699 691 672 662 640 629 3 727 3 637 3 493 3 349 3 142
Slide 39: Dom Inwestycyjny BRE Banku (DI BRE)
Appendix Corporates and Institutions Dom Inwestycyjny BRE Banku (DI BRE) Number of Accounts with DI BRE Profit before Tax (PLN M) Q1/11 (thou.) DI BRE accounts 55.7 - 30.9% eBroker (mBank) 196.5 Brokerage Service (MultiBank) 34.4 TOTAL 286.6 8.9 6.8 DI BRE Market Share in Q1/11, by volume* Equities*
Slide 40: Trading and Investment Activity: Market Shares
Appendix Trading and Investment Activity Market Shares BRE Bank’s Market Share* BRE Bank in the Market of Non-Treasury Debt** in Investment Banking Services at 31.03.2011 (PLN M) 18,565 14,492 12,662 8.7% 15.7% 3,616 2,334 2,301 Treasury IRS/FRA Short-term Debt Corporate Debt Mid-term bank debt Bill
Slide 41: Appendix
Appendix Additional Information: Selected Financial Data 41
Slide 42: Consolidated Profit and Loss Account under IFRS
Appendix Additional Information: Selected Financial Data Consolidated Profit and Loss Account under IFRS PLN thou. By quarter Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Net interest income 390 537 436 254 481 048 503 125 506 524 Net commission income 173 893 172 449 199 211 200 366 207 388 Dividend income 330 2
Slide 43: Profitability of the Business Segments
Appendix Summary of Q1/2011 in BRE Bank Group - Profitability of the Business Segments Quarterly Result before Tax by Business Segment (PLN M) BRE Bank Group Retail Banking Corporates & Financial Markets +71.2% +159.4% +95.8% +17.1% +62.9% -10.0% 309.0 186.3 263.8 142.5 128.2 157.8 108.8 114.3 49.4
Slide 44: Results of Subsidiaries
Appendix Additional Information: Selected Financial Data Results of Subsidiaries Profit before Tax of Consolidated Subsidiaries (PLN M) 16.3 14.9 13.9 Q1/10 11.5 11.0 Q1/11 Q1/11 profit 9.1 8.9 6.8 before tax 3.7 3.3 2.7 2.4 of consolidated 2.1 2.0 2.3 1.1 1.4 0.4 0.4 1.1 subsidiaries BRE.locum DI B
Slide 45: Net Interest Income & Margin
Appendix Additional Information: Selected Financial Data Net Interest Income & Margin Interest Income Structure Net Interest Income, Q1/11 by Business Lines (PLN M) (PLN M) +0.7% 821.8 859.7 863.5 876.7 891.5 -2.6 64.2 165.1 5.2 1.7 1.3 6.8 4.0 8.1 20.2 7.7 15.1 10.7 503.1 506.5 603.2 611.3 628.6 63
Slide 46: Commission Income
Appendix Additional Information: Selected Financial Data Commission Income Commission Income Structure Net Commission Income, Q1/11 by Business Lines (PLN M) (PLN M) 278.5 282.7 302.6 314.8 306.7 +3.5% 8.1 18.5 88.3 200.4 207.4 92.5 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q4/10 Retail Banking Corporates & Tra
Slide 47: Trading Income
Appendix Additional Information: Selected Financial Data Trading Income Contributors of Net Trading Income FX Result Contributors in Q1/11 (PLN M) (PLN M) 32.7 140 Retail Banking 120 100 Financial Markets 16.3 80 14.0 Risk & Liquidity 60 9.3 40 Other 5.6 2.6 20 K3 1.0 1.0 0 -20 K2 -0.4 Origination O
Slide 48: Administrative Expenses Structure
Appendix Additional Information: Selected Financial Data Administrative Expenses Structure Structure of Administrative Expenses incl. Depreciation C/I Ratio of BRE Bank Group (PLN M) (%, as at the end of period) 354.1 391.6 416.9 454.6 408.4 10.3 15.8 59.7 22.8 15.2 58.7 15.4 59.3 58.6 51.4 51.8 51.
Slide 49: Loans and Deposits
Appendix Additional Information: Selected Financial Data Loans and Deposits Loans (PLN B, net) +16.7% BRE Bank* Market* 59.4 1.2** 59.4 58.2 55.6 54.6 50.9 QoQ +0.2% +1.2% +9.2% -1.8% +8.8% 0.0% YoY +16.8% +9.9% 03/10. 06/10. 09/10. 12/10. 03/11. * Data related to gross loans ** Intermarket Bank and
Slide 50: Loan to Deposit Ratio
Appendix Additional Information: Selected Financial Data Loan to Deposit Ratio LtD Ratio in BRE Bank Group 113.3 125.2 127.6 81.9 84.0 73.2 L/D - balance sheet The ratio of loans to deposits L/D "real" ratio stood at 127.6% in Q1/11 Q1/10 Q4/10 Q1/11 Q1/10 Q4/10 Q1/11 However, funding policy for FX
Slide 51: Balance Sheet Analysis – Currency Structure
Appendix Additional Information: Selected Financial Data Balance Sheet Analysis – Currency Structure Currency Structure of Loans Currency Structure of Amounts due to banks and customers 1) (PLN B) (PLN B) 59.4 1.9 1.9 3.2 3.1 1.7 1.6 1.9 1.8 3.8 1.7 1.9 3.5 2.0 3.5 1.9 1.6 1.8 1.8 8.8 8.4 9.2 9.1 1.
Slide 52: Balance Sheet Analysis - Assets
Appendix Additional Information: Selected Financial Data Balance Sheet Analysis - Assets Structure of Assets Loans and Advances to Customers* (PLN B) Portfolio by Customer Category 84.4 89.0 (PLN B) 84.8 88.9 90.1 4.8 1.2 3.3 3.8 4.4 3.1 3.7 1.8 2.6 1.9 1.9 3.6 1.6 1.1 1.4 18.9 18.8 16.1 1.1 15.0 19
Slide 53: Balance Sheet Analysis - Liabilities
Appendix Additional Information: Selected Financial Data Balance Sheet Analysis - Liabilities Structure of Liabilities Structure of Deposits (PLN B) (PLN B) 84.8 88.9 84.4 90.1 89.0 5.5 0.8 7.9 5.2 7.9 5.5 7.1 6.8 7.2 1.0 6.9 1.4 0.9 4.5 1.3 1.5 0.7 1.4 1.5 0.8 0.4 28.7 27.9 26.1 28.4 26.0 17.7 17.6
Slide 54: Funding - Maturity of Long- and Midterm FX Loans
Appendix Additional Information: Selected Financial Data Funding - Maturity of Long- and Midterm FX Loans Significant improvement of funding profile achieved Since 2010 mid-term loans in the amount Maturity of Long- and Mid-term FX Loans by the end of 2012 of CHF 3.0 B primarily maturing in 2010 and
Slide 55: BRE Bank Group's Capital Adequacy Ratio (CAR) in Q1/11
Appendix Additional Information: Selected Financial Data BRE Bank Group’s Capital Adequacy Ratio (CAR) in Q1/11 Relation between Capital Adequacy Ratio (CAR) Change of CAR under Basel II and Risk Weighted Assets (RWA) 90 17% 15.90% +114 bps 16.20% 80 15% 70 -55 bps -29 bps 60 13% 50 11% 40 10.40 11.
Slide 56: Loan Loss Provisions
Appendix Additional Information: Selected Financial Data Loan Loss Provisions Retail Banking provisions by quarters Corporates & Markets provisions by quarters (PLN M) (PLN M) 656.5 295.0 440.6 337.5 82.1 130.5126.1 101.9 103.5 95.6 68.7 69.7 127.9 308.3 122.7 97.6 73.4 107.9 59.5 54.2 57.6 56.5 Q1/
Slide 57: Quality of BRE Bank Group's Loan Portfolio
Appendix Additional Information: Selected Financial Data Quality of BRE Bank Group’s Loan Portfolio Quality of the Loan Portfolio of BRE Bank Group Impairment losses on loans and advances (consolidated data, PLN M) 2.3 2.2 3.4 4.7 5.3 6.0 5.3 5.6 97.7 97.8 96.6 95,3 94.7 94.0 94.7 94.4 -269.1 -1 097
Slide 58: NPLs: Portfolio Structure
Appendix Additional Information: Selected Financial Data NPLs: Portfolio Structure* 03/11 12/10 03/10 Expo- Provisions Expo- Provision Expo- Provisions sure % % coverage sure % % s sure % % coverage 7.1% of NPLs PLN B PLN B coverage PLN B Regular 48.2 92.9 0.7 47.6 92.9 0.6 42.2 93.7 0.9 in the port
Slide 59: Contact
Contact BRE Bank’s Investor Relations Officers at your service: Wojciech Chmielewski Secretariat: +48 22 829 04 80 Head of Investor Relations Direct dial: +48 22 829 14 34 Fax: +48 22 829 04 88 E-mail: wojciech.chmielewski@brebank.pl Joanna Filipkowska Direct dial: +48 22 829 04 53 Deputy Head of In