First Investment Bank Ad · BSESOF:FIB
First Investment Bank Ad — First Investment Bank — Q4 2019 Earnings Presentation
51 slides from First Investment Bank Ad's earnings presentation, Apr 13, 2020
Slide 1: First Investment Bank 2019
FIRST INVESTMENT BANK 2019 CONFIDENTIAL
Slide 2: Table of contents
Table of contents Section 1 Macro environment 3 Section 2 Banking system overview 10 Section 3 Fibank profile 15 Section 4 2019 Q4 Results and profitability 28 Section 5 Management and corporate governance 37 Section 6 Capitalization & leverage 40 Section 7 Funding and liquidity 45 Section 8 Appendi
Slide 3: Macro environment
• SECTION 1 MACRO ENVIRONMENT 3
Slide 4: Country profile
Country profile • Full name: Republic of Bulgaria • Memberships: European Union (since 2007), NATO (since 2004) • Population: 7.2 M AUSTRIA HUNGARY • Capital: Sofia SWITZ. • Area: 110,994 sq km (42,855 sq miles) • Official language: Bulgarian SLOVENIA E • CROATIA Traditional religion: Orthodox Chris
Slide 5: Bulgarian economy had strong results with high growth and low unemployment
Bulgarian economy had strong results over past few years with high growth and low unemployment BULGARIAN GDP INFLATION & KEY DRIVERS OF GROWTH ABOVE EU UNEMPLOYMENT THE BULGARIAN AVERAGE DECREASED SINCE 2012 ECONOMY GDP real growth HICP & Unemployment • In q4, 2019, the country's economy (%, 2012-20
Slide 6: Economy expected to continue strong growth of ~3-4% p.a.
Going forward, the economy is expected to continue strong growth anywhere between ~3-4% p.a. GDP GROWTH EXPECTED UNEMPLOYMENT EXPECTED TO CONTINUE AT TO FURTHER DECREASE & KEY DRIVERS OF THE ATTRACTIVE LEVELS INFLATION TO INCREASE BULGARIAN ECONOMY GDP real growth HICP & Unemployment (%, 2016-2021F)
Slide 7: Bulgarian Economic Overview
Bulgarian Economic Overview Macroeconomic indicators 2013 2014 2015 2016 2017 2018 2019 EUR M 42, 010 42, 824 45,675.2 48,619.8 52,309.2 56,086.2 60,674.5 GDP Growth, % 0.9 1.8 4.0 3.8 3.5 3.1 3.4 EUR M 535.6 530.6 55.1 1 550.9 1 825.0 773.7 2 452.3 Current account % of GDP 1.3 0.1 0.1 3.2 3.5 1.4 4
Slide 8: Macro environment: Key indicators historic development
Macro environment: Key indicators historic development Indicators 2013 2014 2015 2016 2017 2018 2019 Gross domestic product (BGN million) 82,166 83,634 88,571 94,130 98,361 107, 925 118,669 Gross domestic product, real growth (%) 0.9 1.3 3.6 3.9 3.6 3.1 3.4 - Consumption, real growth (%) (1.9) 2.2 3
Slide 9: Mid-term macro forecast
Mid-term macro forecast MACRO ASSUMPTIONS FAVOURABLE MACRO ENVIRONMENT 2018-2021F IN THE MID TERM (2019-2022F) Forecast 2019, Ministry ▪ Positive assumptions of the economic development during the of Finance 2019 2020F 2021F 2022F period 2018-2021; ▪ Stable growth in GDP to slow down in 2018 & then
Slide 10: Banking sector overview
• SECTION 2 BANKING SECTOR OVERVIEW 10
Slide 11: Sector prospects: loan demand, consolidation, new interest rate cycle
Sector prospects: gradual increase in loan demand, on- going consolidation & new upward interest rate cycle. BNB FORECAST 2019-2022 TOTAL TOTAL NET Annual rate of change 2019 2020f LOANS DEPOSITS PROFIT Claims on non-government sector 4.9% 5.6% Loans, Deposits, Net profit, BGNb BGNM - claims on non-
Slide 12: Current Status of the Bank System
Current Status of the Bank System Banking Sector as at 31 December 2019 у/oy 2013 2014 2015 2016 2017 2018 2019 Bank system assets, BGN M 85 747 85 135 87 524 92 095 97 807 105 557 114 201 Growth of assets in the bank system,% 4.0 (0.7) 2.8 5.2 6.2 7.9 8.2 Bank system profit, BGN M 584.9 746.3 898.4
Slide 13: Fibank and the Bulgarian Banking System
Fibank and the Bulgarian Banking System Fibank and the Banking Sector as at 31 December 2019 in BGN M September 2019 December 2019 Growth, % Banking system 111 509 349 114 201 141 2.4% Assets Fibank 9 626 378 10 055 776 4.5% Deposits (other than from Banking system 88 808 176 91 853 230 3.4% credit
Slide 14: Banking sector: Fibank in Top 5 banks at December 2019
The banking sector: 24 banks & foreign branches operated in the country. Fibank in Top5 banks at December 2019. GROUP 1: TOP 5 BANKS GROUP 2: OTHER BANKS TOTAL ASSETS MARKET SHARE TOTAL ASSETS MARKET SHARE (Q4’19, BGNm) (Q4’19%) (Q4’19, BGNm) (Q4’19%) UniCredit Bulbank 21,639 18.9% Raiffeisenbank 8,
Slide 15: Fibank profile
• SECTION 3 FIBANK PROFILE 15
Slide 16: Fibank aspires to be one of the best banks in Bulgaria
Fibank aspires to be one of the best banks in Bulgaria, recognized as innovative & customer-oriented bank BUSINESS MODEL VISION AHEAD TO STRONG COMPETITIVE IN LINE WITH GROW FORWARD IN ADVANTAGES SUPPORTIVE BANK MISSION RETAIL & SME TO OUTPACE PEERS ▪ Fibank aspires to be RETAIL BANKING among the be
Slide 17: 25 years of stable development with focus on innovation
Top 3 Player: 25 years of stable development with focus on innovation and customer experience Fibank Fibank issued Fibank Fibank Fibank Fibank first in Fibank Launches Fibank was Albania EUR200m realized acquired MKB the Balkans its Smart Lady welcomed established established as Eurobonds. the Union
Slide 18: Fibank is top 4 player in assets, loans and deposits
Fibank is top 4 player in assets, loans and deposits at December 2019. Committed to innovation & product leadership TOTAL ASSETS LOANS DEPOSITS Market share (Q4/19 & 2018) Market share (Q4/19 & 2018) Market share (Q4/19 & 2018) 4 4 5 18
Slide 19: Increased market shares in consumer loans and retail deposits
Increased market shares in consumer loans & retail deposits at December 2019 as part of long-term strategy. RETAIL CONSUMER MORTGAGE CORPORATE DEPOSITS LOANS LOANS LOANS Market share (Q4/19 & 2018) Market share (Q4/19 & 2018) Market share (Q4/19 & 2018) Market share (Q4/19 & 2018) * 2 3 6 6 *In the
Slide 20: Diverse and stable business model
Fibank with diverse and stable business model. Business mix weighted towards traditional banking. UNIVERSAL & Mortgage lending TRADITIONAL BANKING Investment & depository services Private banking, Gold & coins Deposit and savings products Payment services, е-banking RETAIL Consumer lending ▪ Retail
Slide 21: Distribution platform: country-wide branch network
Distribution platform: Country-wide branch network with 154 locations in Bulgaria & 10 abroad (Cyprus & Albania) MAP OF BRANCHES FULL RANGE OF SERVICES CYPRUS BRANCH RETAIL BUSINESS ▪ Fibank Cyprus branch has CLIENTS CLIENTS operated since 1997, initially mainly in the area of DEPOSIT PRODUCTS corpo
Slide 22: Customer profile: 91% retail customers
Fibank customer profile: 91% retail customers, 62% in 25- 55 age group. Strong potential for cross selling CUSTOMERS GREW 1.35% YOUNG & WELL-BALANCED DURING 2019 TO REACH 1.206M CUSTOMER PROFILE Total number of customers, thousands +1.35% 1.206 1.190 1.174 1.160 1.141 2015 2016 2017 2018 q4, 2019 So
Slide 23: Multi-channel distribution network
Multi-channel distribution network with adequate balance between physical locations & remote banking channels PHYSICAL REMOTE DISTRIBUTION DISTRIBUTION MULTI-CHANNEL CHANNELS DISTRIBUTION NETWORK CHANNELS ▪ Branch network is the ▪ New integrated e- main channel for Physical channels Remote channels
Slide 24: Fibank at a Glance
Fibank at a Glance After years of leading successfully First Financial Brokerage CORPORATE GROUP STRUCTURE House (FFBH) (a leading non-banking financial institution on the FIRST INVESTMENT BANK AD Bulgarian capital market), mr. Ivailo Mutafchiev and mr. Parent company Tseko Minev established on Octo
Slide 25: Fibank at a Glance
Fibank at a Glance 2003 – 2005: Fibank entered into10 Subordinated term debt agreements for the total amount of EUR 28 mln. included in the Tier 2 capital. In August 2005, the Bank issued its first perpetual subordinated bonds with par value of €27 mln. included in the Tier 2 capital. The arranger o
Slide 26: Key subsidiaries: sound performance and results
Key subsidiaries: Sound performance & results in 2018, growing contributors to Group profit FIRST INVESTMENT DINERS CLUB FIHEALTH BANK - ALBANIA BULGARIA INSURANCE ▪ In 2018, First Investment Bank – ▪ For 2017 the company reported a net ▪ In 2017, Fi Health Insurance increased Albania Sh.a. reported
Slide 27: Recent awards confirmed successful development
Recent awards confirmed Fibank’s successful development & strong focus on innovation & digitalization EFMA-ACCENTURE DMI AWARDS 2018 2 AWARDS ON BANK OF THE EUROMONEY DIGITAL CARDS YEAR AWARDS AWARDS ▪ Fibank won second place in the Offering Innovation category of the Efma- Accenture DMI Awards 2018
Slide 28: Results & profitability
• SECTION 4 RESULTS & PROFITABILITY 28
Slide 29: BGN 138m net profit in 2019
Fibank with BGN 138 m net profit in 2019, used as a strong tool for internal capital generation. Income statement, BGNth 2016 2017 2018 2019 FINANCIAL HIGHLIGHTS 2019 1 For 2019 net interest income amounted to BGN Net interest income 319,179 260,926 267,088 1 246,714 246,714 thousand or 7.6% less th
Slide 30: Profitability: sound financial indicators
Fibank with sound financial indicators. Improved profitability & coverage ratios due to conservative policy Key ratios, % 2016 2017 2018 2019 FINANCIAL HIGHLIGHTS 2019 CET1 ratio 12.01 12.87 13.3 14.65 1 Capital adequacy position at 2019 strengthened further Capital T1 capital ratio 15.1 15.87 16.15
Slide 31: Retail business: retail loans well-balanced
Retail business: Retail loans well-balanced in terms of products & FX. Growing share of consumer loans. RETAIL LOANS STRUCTURE OF KEY HIGHLIGHTS & BY PRODUCT RETAIL LOANS COMMENTS Retail portfolio, BGNm Retail portfolio,% ▪ As of 31 December 2019, First +15% Investment Bank kept its third place in t
Slide 32: Retail business: growing share of microlending
Retail business: Growing focus & share of Microlending portfolio. Gross amount reached BGN 170m at 2019. MICROLENDING GROWING SHARE OF KEY HIGHLIGHTS & PORTFOLIO MICROLENDING COMMENTS ▪ In 2019, the microlending portfolio grew by 21.2% to BGNm 170,161 thousand compared to BGNm +16.8% 140,422 thousan
Slide 33: Retail business: stable and granular retail deposit base
Retail business: Stable & granular retail deposit base, >80% covered by deposit guarantee scheme RETAIL DEPOSITS RETAIL DEPOSITS BY KEY HIGHLIGHTS & BY PRODUCT CURRENCY COMMENTS Deposits to individuals, BGNm Retail deposits by currency, % ▪ As at 30 December 2019, First +5.8% Investment Bank stepped
Slide 34: Loan Portfolio
Loan Portfolio Loan portfolio by sectors of economy Loan portfolio by business lines Corporate customers, 53.33% Small and medium enterprises, 14.12% Microlending, 2.51% Retail customers, 30.03% Corporate customers Small and medium enterprises Microlending Retail customers Corporate Loan portfolio a
Slide 35: Commercial business: corporate deposits grew 15.6%
Commercial business: Deposits from corporates grew 15.6% in 2019 outpacing banking system averages. CORPORATE DEPOSITS CORPORATE DEPOSITS KEY HIGHLIGHTS & BY PRODUCT BY CURRENCY COMMENTS Corporate deposits by product, Corporate deposits by currency, % ▪ Attracted funds from corporates and 22.6% inst
Slide 36: Payment services: growth in fund transfers
Payment services: Registered growth in fund transfers in both BGN & FX. Well-established market position. FUND TRANSFERS FUND TRANSFERS SOLID MARKET IN BGN IN FX CURRENCY SHARES Outgoing transfers Outgoing transfers Market share of in BGN, (000’ numbers) in FX, (000’ numbers) fund transfers -18.3% i
Slide 37: Management & corporate governance
• SECTION 5 MANAGEMENT & CORPORATE GOVERNANCE 37
Slide 38: Cooperation with the IFC: CG & RM enhancement project
Cooperation with the IFC: Successful CG & RM enhancement project during 2015 2015 Implementation Project IFC COOPERATION CORP.GOVERNANCE RISK MANAGEMENT MILESTONES DELIVERABLES DELIVERABLES ▪ In 2010, Fibank asked the IFC to prepare a diagnostic assessment of ✓ Fibank introduced full CCO function in
Slide 39: Organizational structure ensures effective key functions
Organizational structure ensures effective running of key functions & clear separation of duties. SUPERVISORY BOARD (Chair: Evgeni Lukanov, Deputy Chair: Maya Georgieva, Members: Georgi Mutafchiev, Radka Mineva, Jordan Skortchev, Jyrki Koskelo) AUDIT PRESIDING RISK REMUNERATION COMMITTEE COMMITTEE C
Slide 40: Capitalization & leverage
• SECTION 6 CAPITALIZATION & LEVERAGE 40
Slide 41: Regulatory capital well in line with CRD IV
Regulatory capital well in line with CRD IV (Basel III). Profit retention following GMS in September’19 to support CET1. REGULATORY OWN FUNDS REGULATORY CAPITAL CALCULATIONS REQUIREMENTS Regulatory capital, BGN,m Own funds calculations, ▪ Since 1 January 2014, the provisions YE2018 YE2019 of the CRD
Slide 42: Fibank to maintain capital buffers in line with CRD IV
Fibank to maintain capital buffers in line with CRD IV. New O-SII capital buffer applicable since 2018. CAPITAL BUFFERS COMMENTS ▪ In addition to the capital requirements, Fibank maintains Types of capital buffers maintained by the Bank, % capital buffers in compliance with the requirements of Ordin
Slide 43: Capital indicators exceed minimum requirements
Capital indicators exceeds minimum requirements. Ratio calculations consistent with CRD IV. CAPITAL CAPITAL ADEQUACY RATIO INDICATORS CALCULATIONS Capital adequacy indicators for 2017, 2018, ▪ Common Equity Tier 1 capital ratio is the Common Equity Tier 1 capital of the institution expressed as a pe
Slide 44: Capital indicators improved due to de-leverage measures
Capital indicators improved due to de-leverage measures. Hybrid capital fully compliant to absorb losses. CET1 T1 TCA AT1: RATIO RATIO RATIO HYBRID CAPITAL CET1 ratio, % Tier 1 capital ratio, % TCA ratio, % ▪ As at YE16, Fibank had issued +2.1 ppt +2.1 ppt two hybrid instruments 20.0 (bond issues) w
Slide 45: Funding & liquidity
• SECTION 7 FUNDING & LIQUIDITY 45
Slide 46: Customer deposits main source of funding
Customer deposits main source of funding with 95% of liabilities. Stable growth covered state aid repayment. DEPOSITS: MAIN STABLE GROWTH TO LDR SUPPORTING FUNDING SOURCE ADDRESS AID REPAYMENT LIQUIDITY Customer deposits, BGNm Structure of liabilities, % Net loan/deposit ratio, in % 120 9.1 % -2.4 p
Slide 47: Strong liquidity in line with market
Strong liquidity in line with market. Liquidity ratios well above minimum required levels. LIQUID ASSETS GREW LCR & NSFR WELL STRONG LIQUIDITY DESPITE SA REPAYMENT ABOVE MIN LEVELS RATIOS Liquid assets, BGNm LCR & NSFR indicators % Liquidity indicators, % +17.8 % 2,604 335 29.1 327 28.1 28.6 2,087 2
Slide 48: Appendix
• SECTION 8 APPENDIX 48
Slide 49: Awards
Awards Best Bank in Bulgaria Quality of Service 2010 2002 Bank of the year by market share, by Bank 2003 Bank of the Customer, 2011 2006 2012 of the year association by the influential Bulgarian daily “Pari” 2008 2009 (“Money”) 2001 2011 Bank of the year by Bank of the year 2007 The best customers s
Slide 50: Awards
Awards Brand/ Products/ Web/Other awards 2007 Best public company on the Bulgarian 2008 Stock Exchange, by "Dnevnik" 2004 Financial product of the year, by International newspaper 2005 Most Innovative Banking Product 2006 Finance Exhibition “Banks, Investments, 2014 (Credit and Debit Card) by Global
Slide 51: Awards
Awards “Product of the Year” – Debit card for Brand/ Products/ Web/Other awards 2018 2019 children and teenagers - category “Bank cards” 2017 “Product of the Year” b2b awards 2018 Debit card for children and teenagers - category 2018 Category “Socially responsible campaign” “Bank cards” 2017 Consume
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