Pko Bank Polski Sa · GPW:PKO
Pko Bank Polski Sa — FY2005 Earnings Presentation
46 slides from Pko Bank Polski Sa's earnings presentation, 2006
Slide 1: Results for 4 Quarters '05 Presentation
Results for 4 Quarters ‘05 Presentation 1
Slide 2: Disclaimer
Disclaimer • This presentation has been prepared solely for use by PKO BP SA clients and shareholders or analysts and should not be treated as a part of any offer or recommendation to conclude any transaction. The information contained in this presentation is derived from publicly available and reli
Slide 3: Highlights: Double-digit growth of net profit
HIGHLIGHTS Double–digit growth of net profit 2004 2005 Change ( PLN mn) ( PLN mn) 2005/2004 Net profit 1 506.7 1 758.9 16.7% Gross profit 1 869.8 2 192.5 17.3% ROE – net (%) * 19.9 * C/I(%) 66.2 64.8 -1.4pp C/I(%) Bank 65.4 63.1 -2.3pp Total income items 5 960.5 6 400.6 7.4% Net F&C 1 583.0 1 217.9
Slide 4: Highlights: Retail business keeps performing
HIGHLIGHTS Retail business keeps performing Year-on-year comparison • Total outstanding mortgages to individuals increased by 26.2% • Total consumer loans increased by 19.2% • Growth of deposits base by 6.5% • Number of accounts increased by 7.1% to 5,903 thousand • 1.4 millions clients, i.e. 23.7%
Slide 5: Group Efficiency
GROUP EFFICIENCY PAS ROE netto IFRS 22.3% 20.9% 20.1% 19.1% 19.9% 2002 2003 2004 1H05 2005 Group C/I Bank 68.4% 66.0% 66.2% 65.4% 64.8% 63.1% 63.7% 62.9% 62.3% 59.9% 2002 2003 2004 1H05 2005 PAS IFRS 5
Slide 6: Agenda: Macroeconomic situation, results, appendices
Macroeconomic situation Financial results for 2005 Appendices Business performance Detailed financial performance 6
Slide 7: Macroeconomic Situation: Stronger GDP growth
MACROECONOMIC SITUATION Stronger GDP growth IIQ05 IIIQ05 IVQ05 IQ06F 2006F GDP, y/y % 2.8 3.7 4.4p 4.8 4.4 After a period of weaker GDP Current account % GDP -2.2 -1.6 -1.7 -1.6 -1.5 growth in 1H05, in 2H05 Unemployment rate (end of period), % 18.0 17.6 17.6 18.0 16.4 economic growth accelerated. Wa
Slide 8: Macroeconomic Situation: Inflation down, yields up
MACROECONOMIC SITUATION Inflation down, yields up Inflation (end of period y/y%) 5 4.4 4.4 4.4 At the end of 2005 inflation rate dropped to 4 3.4 0.7%, mainly due to lower fuel prices (thanks to 1.7 3 1.4 1.8 drop in oil prices and appreciation of the zloty) 2 0.7 and lower food prices (due to barri
Slide 9: Macroeconomic Situation: Households deposits and loans kept rising
MACROECONOMIC SITUATION Households deposits and loans kept rising Deposits growth rates (end of period y/y %) 15 10.3 In 4Q05 growth rate of deposits weakened, mainly due to slower than in 4Q04 growth of 10 corporate deposits. Households deposits kept 4.1 5 rising as a result of graduate improvement
Slide 10: Agenda: Business performance
Macroeconomic situation Financial results for 2005 Appendices Business performance Detailed financial performance 10
Slide 11: Group Revenue
GROUP REVENUE Total income items in PLN mn 239 6 401 7.6% 4.8% 5 960 139 10.8% 72 309 7.9% 34 13 9.6% (365) 26.6% 19.0% 7.4% 59.0% 56.0% (0.8%) (0.2%) Dividend exchange 2004 operating 2005 Net interest Net other Net fees and at fair value (0.3%) Result from investment instruments Result from 2004 20
Slide 12: PKO BP - Costs
PKO BP - COSTS PLN mn 3 645 87 3 637 PLN mn 0 (45) (50) Impairment losses 2004 2005 - 0.2% (53.7) 2004 salaries and non-personnel taxes and depreciation 2005 (133.3) wages costs charges &contribution and payment to BFG Impairment losses are lower than in 2004 because of better quality of credit port
Slide 13: PKO BP - Structure of Costs
PKO BP - STRUCTURE OF COSTS PKO BP Overhead Costs (PLN mn) 3 645 3 637 61 61 1.7% 1.7% taxes and charges & contribution and payment 1 227 1 183 33.7% 32.5% to BFG non-personnel costs & other 421 12.9% 11.6% 471 deprecation 1 886 1 973 51.7% 54.2% salaries, wages and other employment costs 2004 2005
Slide 14: PKO BP - Number of Outlets and Employees
PKO BP - NUMBER OF OUTLETS AND EMPLOYEES Employees (FTE) Outlets 37 667 1 265 1 266 1 261 1 251 1 238 36 547 35 386 34 681 33 479 2002 2003 2004 1H05 2005 2002 2003 2004 1H05 2005 Continuous fall of employment 1,168 branches in the Retail Banking 83 outlets in the Corporate Banking (branches, Fall o
Slide 15: Net and Pre-Tax Profit
Net and Pre-Tax Profit PLN mn PLN mn Gross profit Net profit Gros s profit Net profit 1854.4 2 192.5 IFRS PAS 1626.1 +14.0% 1 869.8 +17.3% 1511.1 1 758.9 1443.9 +12.6% 1 506.7 +16.7% 1192.7 +26.7% 1051.1 +13.5% 2002 2003 2004 2004 2005 Increase in profits due to result from net interest income, divi
Slide 16: Assets Structure
ASSETS STRUCTURE PLN mn 91 865 85 954 1 656 1.5% 1.8% 1 318 2.9% 1 881 2 643 3.1% 2.0% Other assets 2 652 27.3% Tangible fixed asstes 26 459 46 884 51.0% Investment securities Loans and advances to customers 46.6% Financial instruments 40 037 at fair value 22 244 24.2% Amounts due from banks 1 732 2
Slide 17: Assets Structure by Business Lines
ASSETS STRUCTURE BY BUSINNES LINES 91 865 85 954 PLN mn 8 933 10.3% 9.7% 8 824 19 396 18.8% 21.1% 16 128 Other 1 805 1.8% Housing 1 542 2.0% Investment Treasury 33 710 35 894 41.8% 36.7% Corporate Retail 17 430 19.0% 14 961 17.4% 8 605 10 591 10.0% 11.5% 2004 2005 2004 2005 Assets from treasury have
Slide 18: Liabilities Structure
LIABILITIES STRUCTURE PLN mn 91 865 Total equity 85 954 8 832 10.3% 9.6% 8 858 3 150 2.6% 3.4% 2 212 Other liabilities Amounts due to the customers 76 344 85.0% 83.1% 73 092 Amounts due to the Central Bank, other banks and derivative financial instruments 1 793 3 539 2.1% 3.9% 2004 2005 2004 2005 6.
Slide 19: Liabilities Structure by Business Lines
LIABILITIES STRUCTURE BY BUSINNES LINES 91 865 PLN mn 85 954 11 880 12.6% 12.9% 10 808 8 864 8.9% 9.6% 7 639 470 0.3% 0.5% Other 270 2 177 1.0% 2.4% 883 14.2% 13 529 14.7% Housing 12 179 Investment Treasury Corporate Retail 54 175 54 946 63.0% 59.8% 2004 2005 2004 2005 Growth of corporate (11%) and
Slide 20: PKO BP - Quality of Loan Portfolio
PKO BP - QUALITY OF LOAN PORTFOLIO 8.9% 8.3% 7.7% 6.9% IFRS 1.0% 0.9% 6.9% 0.9% 6.4% 5.9% 0.9% 5.2% 6.8% 7.1% 6.3% 6.2% 1.0% 5.3% 5.0% 0.8% lost 6.5% 1.1% 0.9% doubtf ul individually im paired 93.2% 92.9% 93.7% sub-standard 84.6% 85.4% 87.0% 88.1% norm al watch normal 2004 1H05 3Q05 2005 1H05 3Q05 2
Slide 21: Loan Portfolio - PKO BP
LOAN PORTFOLIO – PKO BP Volume* (in PLN mn) IFRS (in PLN mn) 3Q04 2004 3Q05 2005 2005/2004 2005 Normal 34 053 34 763 40 881 42 915 23.4% Normal & collectively impaired 45 656 Watch 2 667 2 672 2 497 2 460 -7.9% Irregular including 3 798 3 674 3 634 3 347 -8.9% - sub-standard 495 468 424 386 -17.6% 3
Slide 22: Loan Portfolio Comparison by Business Lines
LOAN PORTFOLIO COMPARISON BY BUSINESS LINES - PKO BP Loan Volume* (in PLN mn) 2004 (PAS) Retail Corporate and SME New housing loans Old housing loans Share of individually impaired Normal 8 728 10 895 12 365 2 775 loans in comparison to non- Watch 0.4 2 197 411 64 performing loans in particular segm
Slide 23: Agenda: Detailed financial performance
Macroeconomic situation Financial results for 2005 Appendices Business performance Detailed financial performance 23
Slide 24: Business Development - Income & Profitability
BUSINESS DEVELOPMENT – INCOME & PROFITABILITY Total income items in PLN mn 6 400.6 5 960.5 7.4% annual growth of total income due to higher • result from investment securities (sale of shares in investment portfolio) • foreign exchange result 2004 2005 • result from financial instruments at fair val
Slide 25: Loans and Credits - PKO BP
LOANS AND CREDITS – PKO BP Growth of the loan portfolio Volume of loans Gross amount, PLN bn + 18.5% 48.7 47.0 41.1 44.1 3.0 Y-on-Y growth of loan portfolio 3.0 by 18.5 % 3.1 3.1 Consumer loans and mortgages 17.6 17.2 represent 58.0% of the Bank 16.1 portfolio: 15.2 Volume of consumer loans increase
Slide 26: Deposits - PKO BP
DEPOSITS – PKO BP Continuous growth in the deposits base Volume of deposits PLN bn + 6.5% 79.2 78.0 74.9 2.1 2,1 Y-on-Y growth in clients 73.3 1.8 0.9 14.9 13.7 deposits by +6.5% 12.1 11.4 7.3 7.9 8.4 8.8 Total deposits increased to 78.0 PLN bn 52.9 53.9 53.7 53.5 2004 1H05 3Q05 2005 Retail Housing
Slide 27: Retail Banking - PKO BP
RETAIL BANKING – PKO BP Growth of consumer loans Loans Deposits 11.4 PLN bn PLN bn + 19.2% 11.0 53.9 53.7 53.5 10.2 52.9 9.5 + 1.1% 2004 1H05 3Q05 2005 2004 1H05 3Q05 2005 Year-on-year increase in volume of consumer loans by 19.2% Year-on-year growth in deposit volume by 1.1% 27
Slide 28: Housing Loans - PKO BP
HOUSING LOANS – PKO BP Continuing of strong and healthy growth of mortgages PLN bn 16.8 + 26.2% 15.8 14.8 Year-on-year increase in volume of mortgages granted by 26.2% 13.3 Sale of new housing loans in IVQ05 value of 2.1 PLN bn, growth of 38% compared to IVQ04 Sale of new housing loans in 2005 value
Slide 29: PKO BP - Banking Cards Business
PKO BP - BANKING CARDS BUSINESS Strong growth in credit cards thousands of cards +60.1% 30.5 28.1 29.6 Growth of banking cards issued by 633 thousands 13.3 to 6 076 mn 12,8 Choice – wide offer Active cross – selling 439.1 459.1 494.9 Co-brands & affinity 374.3 partners effort 315.4 Number of individ
Slide 30: Current Accounts - PKO BP
CURRENT ACCOUNTS – PKO BP Current accounts thousands of accounts +3.9% 5 366 5 349 5 271 5 148 More than 1.4 million of PKO BP clients using electronic banking services Strong development in SME customer base 2004 1H05 3Q05 2005 Internet banking (Inteligo) 2004 1Q05 1H05 3Q05 2005 Individual Interne
Slide 31: Corporate Banking - PKO BP
CORPORATE BANKING - PKO BP Further growth of volumes Loans Deposits PLN bn PLN bn +15.9% 17.2 17.6 +12.8% 16.1 14.9 13.7 15.2 12.1 11.4 2004 1H05 3Q05 2005 2004 1H05 3Q05 2005 For the purpose of comparability with the 2004 data, SMEs loans and deposits are included in the corporate market balances 3
Slide 32: PKO BP - Structured Finance
PKO BP – STRUCTURED FINANCE Leading agent for local government No Status of XII 2005 Total debts issuers Number of Value of programmes Series or tranches sold in IV Q’05 (PLN mn) programmes (PLN mn) Bank - agent Number Value (PLN mn) 1 PKO BP 1 118.9 155 1 641.4 133 166.1 2 Pekao SA (with CDM Pekao
Slide 33: BDM PKO BP - Brokerage House
BDM PKO BP - BROKERAGE HOUSE One of the market leaders at WSE Activity in IVQ05: No. Brokerage house Turnover (PLN mn) Market shares No. 6 in turnover of share market 1 DM BH 8 890.7 16.2 2 CDM Pekao 7 091.5 12.9 Leader in bonds market, average share in WSE 3 DM BZ WBK 6 322.0 11.6 turnover 35% (PLN
Slide 34: PKO BP - Mutual Funds
PKO BP – MUTUAL FUNDS Pioneer Pekao 31.4% Other 21.7% BZ WBK AIB 12.6% KBC 4.3% ING 10.9% Union Investment 4.4% BPH 6.2% PKO/Credit Suisse 8.5% New products: Stock Fund – PKO/CS Akcji Nowa Europa (New Europe) Stock and bond Fund – PKO/CS Światowy Fundusz Walutowy (World Currency Fund) Investment dep
Slide 35: Subsidiaries of PKO BP
SUBSIDIARIES OF PKO BP Support of business activity and enhance product line of PKO BP Retirement insurance Assets: 2 749 million PLN management No. 8 on the market as ranked both by value of assets under management Asset and number of accounts of OFE members Investment funds Value of assets under m
Slide 36: Appendices
Macroeconomic situation Financial results for 2005 Appendices Business performance Detailed financial performance 36
Slide 37: Group Balance Sheet: Assets
GROUP BALANCE SHEET Assets IFRS, Consolidated, PLN thousand 2004 2005 %Change Cash and balances with the Central Bank 3 525 329 3 895 333 10.5% Amounts due from other banks 13 231 886 12 662 688 -4.3% Financial assets held for trading 369 517 851 003 130.3% Derivative financial instruments 1 362 379
Slide 38: Group Balance Sheet: Liabilities and Total Equity
GROUP BALANCE SHEET Liabilities and Total Equity IFRS, Consolidated, PLN thousand 2004 2005 %Change Amounts due to the Central Bank 144 766 X 4.3 Amounts due to the other banks 998 718 2 084 985 108.8% Derivative financial instruments 793 739 1 453 081 83.1% Amounts due to customers 73 091 874 76 34
Slide 39: PKO BP Group - Financial Results
PKO BP GROUP - FINANCIAL RESULTS Change PLN thousand 2004 2005 2004/2005 Net interest income 3 514 719 3 586 995 2.1% Net fees and commission income 1 583 014 1 217 882 -23.1% Dividend income 3 396 16 112 X 3.7 Result from financial instruments at fair value (45 675) (11 918) -73.9% Result from the
Slide 40: PKO BP Group - Financial Results (IVQ)
PKO BP GROUP - FINANCIAL RESULTS Change PLN thousand IVQ04 IVQ05 IVQ05/ IVQ04 Net interest income 894 322 906 325 1.3% Net fees and commission income 440 581 321 660 -27.0% Dividend income 145 0 -100.0% Result from financial instruments at fair value (58 989) (115 542) 95.9% Result from the investme
Slide 41: PKO BP - Financial Results
PKO BP - FINANCIAL RESULTS PLN thousand Change 2004 2005 2005/2004 Net interest income 3 471 947 3 517 453 1.3% Net fees and commission income 1 581 055 1 169 839 -26.0% Dividend income 22 291 28 881 29.6% Result from financial instruments at fair value (45 976) (13 045) -71.6% Result from the inves
Slide 42: PKO BP - Financial Results (IVQ)
PKO BP - FINANCIAL RESULTS PLN thousand Change IVQ04 IVQ05 IVQ05/ IVQ04 Net interest income 870 103 883 808 1.6% Net fees and commission income 434 926 311 980 -28.3% Dividend income 144 0 -100% Result from financial instruments at fair value (59 026) (115 930) 96.4% Result from the investment secur
Slide 43: Financial Record
FINANCIAL RECORD Total Income: Overhead costs: Impairment losses Net Interest Income: up 7.4% up 5.1 % up 2.1% 5 960.5 6 400.6 3 943.6 4 144.6 3 587.0 2004 2005 3 514.7 (86.2) 2004 2005 2004 2005 2004 2005 (169.0) Note: PLN millions Return on Average Equity: Irregular loans (as % of Loans)*: Capital
Slide 44: Structure of Shareholders
STRUCTURE OF SHAREHOLDERS Major shareholders of PKO BP with over 5% of the share capital as at 31 December 2005 – State Treasury 48.43% State Treasury Others 51.57% 44
Slide 45: Rating of PKO BP
RATING of PKO BP Based on public information as at 31 December 2005 Rating Agency Fitch Moody’s Investors Standard & Capital Service Poor’s Intelligence Long-term A2 /BBBpi BBB+/ (foreign/local) with stable outlook Short-term Prime-1 A2/ (foreign/local) with stable outlook Individual Support 2 2 Fin
Slide 46: Contacts: Investor Relations
CONTACTS Investor Relations Lidia Wilk Director of Investor Relations Phone: (+48 22) 521 91 82 Fax: (+48 22) 521 91 83 E-mail: lidia.wilk@pkobp.pl Web site: www.pkobp.pl 46