Bank Millennium Sa · GPW:MIL
Bank Millennium Sa — Q1 2022 Earnings Presentation
37 slides from Bank Millennium Sa's earnings presentation, Apr 26, 2022
Slide 1: Presentation 1Q22 results
Presentation 1Q22 results 26 April 2022 1
Slide 2: Disclaimer
DISCLAIMER This presentation has been prepared by Bank Millennium for its stakeholders for information purpose only. The information presented in this presentation should be read together with other information published by the Bank (on www.bankmillennium.pl), in particular financial and current rep
Slide 3: Agenda
AGENDA 3
Slide 4: Presentation of 1Q22 results: Financial performance
01 PRESENTATION OF 1Q22 RESULTS Financial performance 4
Slide 5: Key profit & loss items
KEY PROFIT & LOSS ITEMS PLNmn 1Q22 1Q21 Change Y/Y 4Q21 Change Q/Q Net interest income 961.0 622.3 54.4% 54.4% 767.1 25.3% 25.3% Net commission income 220.8 204.8 7.8% 215.0 2.7% Total operating income 1,159.9 867.0 33.8% 33.8% 923.1 25.7% Total costs -486.2 -427.3 13.8% -434.1 12.0% Costs without B
Slide 6: Key balance sheet and business items
KEY BALANCE SHEET AND BUSINESS ITEMS PLNmn Mar. 22 Mar. 21 Change Y/Y Dec. 21 Change Q/Q Active customers (ths) 2 740 2 611 129 129 2 694 46 On-line and mobile customers 2 350 2 113 237 2 263 87 Customer funds 105 233 97 418 8.0% 100 425 4.8% Deposits 97 305 88 255 10.3% 10.3% 91 448 6.4% Deposits o
Slide 7: Financial highlights of 1Q22
FINANCIAL HIGHLIGHTS OF 1Q22 Core profitability (ex-FX mortgage) is growing: net income up 115% y/y Net profit Net profit w/o extraordinary* items (PLNmn) 10.1% 19.9% ROE adjusted* +115% 485 321 319 238 225 258 -14.0% -7.6% ROE reported 193 191 145 54 60 18 (PLNmn) +115% 1Q20 2Q20 3Q20 4Q20 1Q21 2Q2
Slide 8: Financial highlights of 1Q22
FINANCIAL HIGHLIGHTS OF 1Q22 Growing core profitability and efficiency, stable cost of risk Fees up Adjusted net profit* NII and NIM strongly up +115% y/y +54%; +79bp y/y +8% y/y Adjusted ROE Cost/Income Cost of risk 19.9% 35.5% 40 bp (*) Extraordinary items: FX-mortgage legal risk provisions, costs
Slide 9: Interest and commission income
INTEREST AND COMMISSION INCOME NII strongly up in 1Q22 with jump in quarterly NIM to 3.77%; remarkable growth in fees: +8% y/y Net interest income Interest on loans and deposit (quarterly average) (PLNmn) 4.75% 4.57% 4.77% +54% 3.94% 3.37% 3.33% 3.69% 3.22% 3.25% 3.32% +25% 2.94% 2.81% 2.58% 2.49% 3
Slide 10: Cost efficiency
COST EFFICIENCY Operating costs grew 14% y/y due to higher BFG fees (7% without BFG). C/I improved owing to strong core income Operating cost (PLNmn) Employees -396 8,412 8,141 7,846 7,630 7,493 7,335 7,238 14% 7,014 7,148 7,035 6,942 6,842 7% w/o BFG 6,602 8% 6,450 6,454 6,366 6,245 6,211 6% -239 1
Slide 11: Asset quality
ASSET QUALITY Strong credit quality with stable cost of risk Cost of risk Impaired loans (IFRS9 stage 3 &POCI) 10.6% 10.6% 10.5% 10.9% 10.9% 11.2% 10.4% 10.6% (bp) 9.9% 4.8% 4.9% 4.7% 5.0% 4.9% 4.7% 4.7% 4.4% 4.4% 108* 89 80 55 39 28 42 39 40 Total loans 4.3% 5.1% 4.6% 4.1% 4.2% 4.1% 3.9% 3.9% 4.1%
Slide 12: FX-mortgage portfolio (1/2)
FX-MORTGAGE PORTFOLIO (1/2) Accelerating pace of FX-mortgage portfolio’s downsizing FX-mortgages* (gross w/o legal risk provisions) FX-mortgages as % of total gross book (gross after legal risk provisions) (CHFmn) 5,000 4,698 4,406 25.8% 4,500 4,094 -19% 24.1% 4,000 3,782 3,498 20.4%19.1% 3,500 3,21
Slide 13: FX-mortgage portfolio (2/2)
FX-MORTGAGE PORTFOLIO (2/2) Number of amicable settlements remained well above the number of new legal cases Provisions against legal risk as % of FX-mortgage book* Legal risk provisions/outstanding FX-mortgage book** 35.0% (% of gross loans) 30.3% 35% 30.0% 30.3% 25.7% 30% 25.7% 25.0% 25% 19.5% 20.
Slide 14: Liquidity and capital
LIQUIDITY AND CAPITAL Good liquidity and sound capital adequacy despite material provisions burden Liquidity indicators Group capital ratios * 202% 20.0% 20.0% 177% 178% 184% 19.5% 19.5% 174% 19.4% 18.7% 162% 161% 18.2% 150% 151% 17.1% 16.5% 17.0% 17.0% 16.5% 16.3% 16.0% 15.6% 15.1% 86% 91% 85% 86%
Slide 15: Presentation of 1Q22 results: Business development
02 PRESENTATION OF 1Q22 RESULTS Business development 15
Slide 16: Business highlights of 1Q22
BUSINESS HIGHLIGHTS OF 1Q22 Good dynamics of retail business, corporate one showing gradual improvement Loans PLN mortgage loans Leasing portfolio +5% y/y +24% y/y +8% y/y Debit cards Active digital customers Customer deposits +163ths y/y 2.4mn +10% y/y 16
Slide 17: Loans and customer funds
LOANS AND CUSTOMER FUNDS Good dynamics of business volumes, especially PLN mortgage and corporate deposits Loan portfolio of the Group (net) Customer deposits (PLNmn) +5% +13% y/y without FX loans +10% +2% (PLNmn) +38% +4% 0% +24% 74,636 75,794 77,280 78,603 78,703 97,305 73,639 89,998 90,250 91,448
Slide 18: Retail business – loans and customer funds
RETAIL BUSINESS – LOANS AND CUSTOMER FUNDS Slowdown of retail loans’ origination although still robust when compared to pre-pandemic levels. PLN loans keep high momentum. Retail loans (gross) Retail customer funds 6% 0% (PLNmn) +16% y/y without FX loans 2% -2% 24% (PLNmn) +3% -1% 58,029 58,993 60,33
Slide 19: Retail banking - number of customers and accounts
RETAIL BANKING - NUMBER OF CUSTOMERS AND ACCOUNTS Steady growth of customers and cards after completed merger with Euro Bank Active retail clients* Active micro-business clients (thousand) (thousand) +12 +128 +45 118.5 2,739 114.1 2,664 2,694 111.5 2,607 2,611 2,632 108.6 103.9 106.1 31/12/20 31/03/
Slide 20: Bank in a smartphone
BANK IN A SMARTPHONE The interest in mobile banking breaks new records Record-breaking quarter +107% y/y At the end of March, we reached 2 million 2.02mn mobile banking users. We celebrated our first P2P transfers Active mobile users (*) (+17% y/y) milion 3 years ago. +68% y/y All BLIK transactions
Slide 21: Innovations
INNOVATIONS We support clients in managing their money, introduce e-administration projects and help Ukraine Mobile MilleAdministration Charity support We launched Rodzina 500+ and RKO benefit To help people fleeing Ukraine we introduces applications in the mobile app. a new defined charity transfer
Slide 22: Online, means always convenient
ONLINE, MEANS ALWAYS CONVENIENT The share of digital channels in sales and new accounts opening is growing New current accounts Seamless lending 32% +53% 6,300 78% Digital channels In number of accounts New junior accounts (0-17 share in opening opened online in 1Q22 years old) opened online Digital
Slide 23: Goodie – smartshopping platform of Bank Millennium
GOODIE – SMARTSHOPING PLATFORM OF BANK MILLENNIUM Development and promotions for cashback users Since 2018: 1Q22: 2.75mn 89,000 app downloads app downloads PLN1.14bln PLN176mn generated cashback turnover generated cashback turnover PLN26.5mn PLN3.3mn amount of cashback amount of cashback Your eCards
Slide 24: Companies business – deposits and loans
COMPANIES BUSINESS – DEPOSITS AND LOANS Steady growth of loans: +4% y/y with rebound in leasing; strong growth of deposits: +38% y/y Companies deposits Loans to companies (gross) (PLNmn) +4% (PLNmn) +38% -7% +93% +8% +18% +4% 19,023 19,031 19,250 19,454 19,540 19,711 33,033 2,783 2,859 2,982 2,835 2
Slide 25: Companies business – loans and transactions
COMPANIES BUSINESS – LOANS AND TRANSACTIONS Leasing sales grew +12% y/y; factoring grew +3% y/y Leasing – new sales Factoring – turnover (PLNmn) (PLNmn) +12% +3% 7,002 6,896 7,245 6,487 6,568 6,661 1,022 1,017 1,076 5,971 856 5,208 5,047 774 762 618 563 520 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q
Slide 26: Support for business
SUPPORT FOR BUSINESS We are building a comprehensive online offering for corporate and business clients FIRMS CORPORATE ✓ New process for applying for a business cash ✓ Innovative process for loan through digital channels validating and maintaining electronic ✓ System changes and additional promotio
Slide 27: Novelties and improvements for corporate banking clients
NOVELTIES AND IMPROVEMENTS FOR CORPORATE BANKING CLIENTS • We continued the development of Millenet for Companies online banking. We have enriched the module of digital document exchange with the process of qualified validation of electronic signatures, which makes it possible to obtain confirmation
Slide 28: Presentation of 1Q22 results: Appendices
03 PRESENTATION OF 1Q22 RESULTS Appendices 28
Slide 29: Macroeconomic overview
MACROECONOMIC OVERVIEW Economy The outlook for the growth and inflation PMI indicators in the Eurozone (pts) Business sentiment indicators in Poland (pts) deteriorated after the outbreak of the war in Ukraine but the drop of business sentiment indicators in March was milder than in 2020 after the ou
Slide 30: Macroeconomic overview: Financial markets
MACROECONOMIC OVERVIEW Financial markets EUR/PLN and CHF/PLN exchange rates WIBOR 3M and market expectations (%) Due to mounting inflation risks the Monetary Policy Council decided to accelerate the pace of monetary policy tightening in 1Q22 and hiked interest rates by 225 bps. Expected continuation
Slide 31: Macroeconomic overview: Monetary aggregates
MACROECONOMIC OVERVIEW Monetary aggregates Loans to households Mortgage loans Loans to companies (PLNbn, % y/y) (PLNbn, % y/y) (PLN bn, % y/y) At the end of Feb’22 the value of loans to households was only slightly lower than in Dec’21 as a decrease in consumer loans was counterbalanced by a further
Slide 32: Ratings and market ratios
RATINGS AND MARKET RATIOS In 1Q22, the outbreak of the war in Ukraine was the main factor influencing investors' moods. Since the beginning of the year the share price of Bank Millennium shares decreased 19% but in annual basis grew by 75%. Bank Millennium share performance vs. WIG Bank index Bank M
Slide 33: ESG activities
ESG ACTIVITIES ESG (Environmental, Social, Governance) issues have been an integral part of the Bank Millennium Group’s business strategy for years now. As a responsible and friendly bank, we want to exert a positive influence on our social, economic and natural environment, ensure full availability
Slide 34: The most important awards and achievements in 1Q 2022
THE MOST IMPORTANT AWARDS AND ACHIEVEMENTS OF BANK MILLENNIUM in 1Q 2022 Professionalism and versatility of employees as well as excellent relations with clients confirmed by independent rankings an competitions Bank employees distinguished in the A team of Bank Millennium economists Bank Millennium
Slide 35: Synthetic P&L account
SYNTHETIC P&L ACCOUNT SYNTHETIC P&L ACCOUNT Reported results 1Q22 1Q21 Change Y/Y 4Q21 Change Q/Q Net interest income* 961 622 54% 767 25% Net commission income 221 205 8% 215 3% Other non-interest income -22 40 - -59 -63% Operating Income 1 160 867 34% 923 26% General and administrative costs -435
Slide 36: Balance sheet
BALANCE SHEET 31.03.2021 31.12.2021 31.03.2022 Change y/y ASSETS Cash and balances with the Central Bank 2 361 3 180 8 286 251% Loans and advances to banks 605 771 986 63% Loans and advances to customers 74 636 78 603 78 703 5% Amounts due from reverse repo trans. 24 269 26 8% Debt securities 22 980
Slide 37: Investor relations contact
INVESTOR RELATIONS CONTACT: Head of Investor Relations Katarzyna Stawinoga Tel: +48 22 598 1110 Dariusz Górski e-mail: katarzyna.stawinoga@bankmillennium.pl Tel: +48 514 509 925, +48 22 598 1115 e-mail: dariusz.gorski@bankmillennium.pl Marek Miśków Tel: +48 22 598 1116 e-mail: marek.miskow@bankmille