Brd Groupe Societe Generale Sa (romania) · BVB:BRD
Brd Groupe Societe Generale Sa (romania) — BRD - Groupe Société Générale — Q3 2017 Earnings Presentation
30 slides from Brd Groupe Societe Generale Sa (romania)'s earnings presentation, Nov 6, 2017
Slide 1: BRD Group Results 3rd Quarter and First 9 Months 2017
BRD - GROUP R E S U LT S 3 RD Q U AR T E R AN D F I R S T 9 M O N T H S 2 0 1 7 06 NOVEMBER 2017
Slide 2: Disclaimer
DISCLAIMER The consolidated and separate financial position and income statement for the period ended September 30, 2017 were examined by the Board of Directors on November 2, 2017. The financial information presented for the period ended September 30, 2017 and comparative periods has been prepared
Slide 3: Introduction
INTRODUCTION BRD
Slide 4: 9M 17: Strong profitability growth fully confirmed
9M 17: STRONG PROFITABILITY GROWTH FULLY CONFIRMED Growth of core Group revenues on an accelerating path Core NBI* Further business expansion across Retail and Non-Retail segments Broad based credit growth (+6.6% y/y) RON 2,051m +3.4% vs 9M 2016 Growing retail deposit base (+7.6% y/y) Core GOI* Impr
Slide 5: Q3 17: Growth of core revenues on an accelerating path
Q3 17: GROWTH OF CORE REVENUES ON AN ACCELERATING PATH NBI excluding non recurring items (RON m) Accelerating core NBI growth Core NBI* up +6.1% vs Q3 2016, driven by net interest income, on solid volume growth +6.1% 712 Strong individuals’ loan production in a favorable macro context. Retail loans
Slide 6: Macroeconomic & Banking Environment
2 MACROECONOMIC & BANKING ENVIRONMENT
Slide 7: Supportive macro environment
SUPPORTIVE MACRO ENVIRONMENT Largest GDP growth* in Europe expected for 2017 GDP GROWTH After a solid advance of 4.8% in 2016, economic momentum 5.5% 4.8% continues to be strong in 2017, with private consumption the most 3.9% significant contributor to GDP growth 3.5% 3.1% Q2 17 GDP grew +5.9% y/y (
Slide 8: Loans to companies are picking up
LOANS TO COMPANIES ARE PICKING UP LOANS (RON bn) yoy* Loans to companies are picking up 246 +5.7% Corporate credit up +5.2% at September 2017 end, gathering pace, 230 233 compared to the contraction seen at 2016 end, on ongoing economic growth and favorable interest rate environment. 126 +5.2% 118 1
Slide 9: Confirmed improvement of the Romanian banking system risk profile
CONFIRMED IMPROVEMENT OF THE ROMANIAN BANKING SYSTEM RISK PROFILE NPL RATIO Material progress in NPLs reduction 20.7% NPL ratio lower by 1.8 ppts y/y as a result of write off operations and sale of defaulted loans portfolios 13.6% 10.0% 9.5% 8.2% 6.5% 5.7% 5.4% 5.1% 4.5% * Highest in EU NPL coverage
Slide 10: 3rd Quarter and First 9 Months 2017 BRD Group Results
3 3RD QUARTER AND FIRST 9 MONTHS 2017 BRD GROUP RESULTS
Slide 11: Ongoing transformation of retail banking business model
ONGOING TRANSFORMATION OF RETAIL BANKING BUSINESS MODEL Individual customers: increased autonomy on day-to-day Small business clients: successful shift to E-channels banking transactions c Stock of remote banking contracts up +25% YoY at Sep-17 E-channels share in the nb. of payments in 74% local cu
Slide 12: Strong commercial performance, rapidly growing direct channel transactions
STRONG COMMERCIAL PERFORMANCE, RAPIDLY GROWING DIRECT CHANNEL TRANSACTIONS AVERAGE INDIVIDUAL CUSTOMER Dynamic client acquisition EQUIPMENT RATE 4.16 2.27m active clients 4.07 Stock of active clients increased by + 34,000 y/y 4.04 Individuals Small business 2.14m clients 112k clients +31,000 y/y +3,
Slide 13: Broad-based credit growth further proving BRD's commitment to finance the economy
BROAD-BASED CREDIT GROWTH FURTHER PROVING BRD’S COMMITMENT TO FINANCE THE ECONOMY LOANS TO INDIVIDUALS PRODUCTION (RON m) Expansion of new loan volumes to individuals Q3-17 vs. 9M-17 vs. Strong advance of new consumer loans, thanks to well-targeted Q3-16 9M-16 campaigns and households’ appetite for
Slide 14: Growing deposit base
GROWING DEPOSIT BASE DEPOSITS (outstanding amounts, RON bn) yoy* ytd* Strong inflows from retail customers 42.2 42.7 +3.6% +0.6% 40.7 Retail +7.6% YoY vs September 2016 end 16.2 15.8 16.0 -2.6% -2.8% Lower non retail deposits, in a context of comfortable liquidity position 24.6 26.0 26.9 +7.6% +2.7%
Slide 15: Growth of core net banking income on an accelerating path
GROWTH OF CORE NET BANKING INCOME ON AN ACCELERATING PATH NET BANKING INCOME (RONm) Strong increase in core NBI… excl. non incl. non recurring * recurring NBI up +6.1% in Q3 2017 and +3.4% in 9M 2017 after adjusting 719 +6.1% +6.2% for non recurring items (gains on sale of Visa share and other Non r
Slide 16: Costs reflecting improved operational performance
COSTS REFLECTING IMPROVED OPERATIONAL PERFORMANCE OPERATING EXPENSES (RON m) yoy 326 343 +5.1% Q3 2017 operating expenses up +5.1% y/y 172 185 +7.3% Staff expenses influenced by the revaluation of the compensation Staff expenses package, in line with the market practice Higher consulting expenses (m
Slide 17: Improved asset quality
IMPROVED ASSET QUALITY GROSS LOANS – September 30, 2017 breakdown by segment and currency (RON bn) Loan portfolio market mix 62.5% on individuals market segment 37.5% on legal entities market segment Consolidation of RON lending 20.1 19.2 Share of RON denominated loans at 59.7% (versus 55.5% as of 1
Slide 18: Cost of risk strongly influenced by positive exceptional items
COST OF RISK STRONGLY INFLUENCED BY POSITIVE EXCEPTIONAL ITEMS COST OF RISK EVOLUTION (RON m) Q3 2017 NCR highlights Strong level of recovery performance, mainly from legal entities NPL 2 500 1 883 2 083 400 exposures: near 84 MRON in net provision reversals 2 000 1 193 1 193 300 Moderate level of n
Slide 19: Very strong profitability growth fuelled by commercial activity and non recurring items
VERY STRONG PROFITABILITY GROWTH FUELLED BY BOTH DYNAMIC COMMERCIAL ACTIVITY AND NON RECURRING POSITIVE COST OF RISK ITEMS NET PROFIT (RON m) +40.2% Net profit solid growth fully confirmed 316 incl. non recurring items 6 9M 2017 net profit up +76% Q3 2017 net profit up +40% Non-recurring 225 items c
Slide 20: Solid capital position
SOLID CAPITAL POSITION SOLVENCY RATIO * +269bp Solid Tier 1 capital base -188bp -76bp -2bp CAR at 18.5% at September 17, comfortably above regulatory requirement 18.47% 18.50% Sep-16 Earnings Dividends RWA Other Sep-17 Bank only Sep-16 Sep-17 Capital adequacy ratio 18.47% 18.50% Own funds (RONm) 5,0
Slide 21: Conclusions
CONCLUSIONS BRD
Slide 22: Conclusions
CONCLUSIONS Ongoing transformation of retail banking business model Direct channels transactions rapidly increasing Strong commercial momentum Broad-based credit growth showing BRD’s commitment to finance the economy Larger deposit base Growth of core net banking income on an acceleratin
Slide 23: Q&A Session
Q&A SESSION BRD
Slide 24: Appendix
APPENDIX BRD
Slide 25: BRD Group | Key figures
BRD GROUP | KEY FIGURES RON m Q3-2017 Q3-2016 Change 9M-2017 9M-2016 Change Net banking income 719 677 +6.2% 2,061 2,111 -2.4% Operating expenses (343) (326) +5.1% (1,063) (1,032) +3.0% Gross operating income 376 350 +7.3% 997 1,079 -7.5% Reported financial results Net cost of risk 1 (79) n/a 271 (3
Slide 26: BRD Group | Key figures
BRD GROUP | KEY FIGURES Loans and deposits RON bn Sep-16 Dec-16 Sep-17 vs. Sep-16 vs. Dec-16 (1) 28.4 28.5 30.7 +6.6% +7.1% Net loans including leasing (RON bn) Retail 19.0 19.3 20.7 +7.1% +6.4% Non retail 9.4 9.2 10.0 +5.6% +8.7% (1) 40.7 42.2 42.7 +3.6% +0.6% Total deposits (RON bn) Retail 24.6 26
Slide 27: BRD | Key figures for bank only
BRD | KEY FIGURES FOR BANK ONLY RON m Q3-2017 Q3-2016 Change 9M-2017 9M-2016 Change Net banking income 668 634 +5.4% 1,962 2,015 -2.7% Financial results Operating expenses (322) (308) +4.4% (1,003) (975) +2.8% Gross operating income 347 326 +6.4% 959 1,040 -7.8% Net cost of risk 7 (79) n/a 281 (349)
Slide 28: BRD | Stock price performance
BRD | STOCK PRICE PERFORMANCE Market capitalisation 15.0 4,000 EUR 1.9 bn 14.0 3,500 13.0 3,000 12.0 2,500 11.0 2,000 10.0 1,500 9.0 1,000 8.0 7.0 500 6.0 0 Volume ('000 shares, rhs) Price (RON, lhs) BRD is part of the main market indices on the Bucharest Stock Exchange BRD is in Top 5 largest d
Slide 29: Glossary – Client segmentation
GLOSSARY – CLIENT SEGMENTATION The Retail category is comprised of the following customer segments: • Individuals – BRD provides individual customers with a range of banking products such as: savings and deposits taking, consumer and housing loans, overdrafts, credit card facilities, funds transfe
Slide 30: BRD Groupe Societe Generale - Investor Relations
BRD GROUPE SOCIETE GENERALE - INVESTOR RELATIONS +4 021 380 47 62 investor@brd.ro www.brd.ro
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