Brd Groupe Societe Generale Sa (romania) · BVB:BRD
Brd Groupe Societe Generale Sa (romania) — BRD Groupe Société Générale — H1 2019 Earnings Presentation
30 slides from Brd Groupe Societe Generale Sa (romania)'s earnings presentation, Aug 2, 2019
Slide 1: BRD Group Results
BRD GROUP RESULTS 2nd quarter and 1st half 2019 | 02.08.2019
Slide 2: Disclaimer
DISCLAIMER The consolidated and separate financial position and income statement for the period ended June 30, 2019 were examined by the Board of Directors on July 30, 2019. The financial information presented for the period ended June 30, 2019 and comparative periods has been prepared according to
Slide 3: Introduction
1 INTRODUCTION BRD GROUPE SOCIETE GENERALE
Slide 4: H1 2019: Net profit of RON 787 million
H1 2019: NET PROFIT OF RON 787 MILLION Strong revenues’ generation capacity benefiting from dynamic commercial activity and double digit advance in NII NBI Increase of average outstanding of retail (+3.9% y/y) and corporate loans (+7.7% y/y) RON 1,609m +8.7% vs H1 2018 Average outstanding deposits o
Slide 5: Q2 2019: Revenues positive momentum supporting the bottom line
Q2 2019: REVENUES POSITIVE MOMENTUM SUPPORTING THE BOTTOM LINE NBI (RON m) Good revenue momentum +9.7% +9.1% 824 Net banking income, +9.1% y/y on broad based revenues growth 756 689 Costs under control Operating expenses up by +2.3% y/y Q2-2017 Q2-2018 Q2-2019 C/I ratio improved to 43.9%, lower by -
Slide 6: Macroeconomic and Banking Environment
2 MACROECONOMIC AND BANKING ENVIRONMENT
Slide 7: Strong economic expansion, largely based on consumer spending
STRONG ECONOMIC EXPANSION, LARGELY BASED ON CONSUMER SPENDING GDP GROWTH GDP growth of 5.0% y/y in Q1 2019 7.0% In Q1 2019, economic expansion was robust (+5.0% y/y), but continued to be consumption-led (households’ consumption: +4.4 pp contribution to GDP growth) 4.8% Weak gross fixed capital forma
Slide 8: Robust loan market
ROBUST LOAN MARKET ROMANIAN BANKING SYSTEM LOANS (RON bn) Y/Y* Individuals’ borrowing appetite begins to moderate 254 263 271 +6.1% Consumer lending is showing signs of softening after enjoying sound growth last year (+3.4%* y/y at June 2019 end compared to the 134 126 130 +5.9% average +5.8%* y/y g
Slide 9: Sound risk profile
SOUND RISK PROFILE ROMANIAN BANKING SYSTEM NPL RATIO 20.7% Further improving risk profile 13.6% Declining trend in NPL ratio as a result of write off operations and 9.5% sale of defaulted loans portfolios, as well as positive lending dynamics 6.5% 5.7% 5.1% 6.4% 5.0% 4.9% NPL ratio at 4.8% at May 20
Slide 10: 2nd Quarter and 1st Half 2019 BRD Group Results
3 2ND QUARTER AND 1ST HALF 2019 BRD GROUP RESULTS
Slide 11: Further digitalizing the customer journey
FURTHER DIGITALIZING THE CUSTOMER JOURNEY DIGITAL BANKING SOLUTIONS* Constant focus on innovation 948 970 995 Personal expenses dashboard in ContAll offers users additional insight on monthly spending habits (MyBRD Mobile) 748 Instant Top-Up option in MyBRD Mobile allows free interbank 624 trans
Slide 12: Loan growth sustained by retail and large corporate clients
LOAN GROWTH SUSTAINED BY ADVANCE ON RETAIL AND LARGE CORPORATE CLIENTS Retail growth building on both consumer and housing loans Robust increase in consumer loans (+5.8%* y/y) Focus on higher mass market customers with safe risk profile Housing loans outstanding up by +3.4%* y/y NET LOANS (outstandi
Slide 13: Large deposit base ensuring stable funding sources
LARGE DEPOSIT BASE ENSURING STABLE FUNDING SOURCES DEPOSITS (outstanding amounts, RON bn) Y/Y* YTD* Retail savings continued to rise 44.3 45.2 45.4 +1.9% -0.2% Retail deposits up by +3.2%* y/y due to higher inflows in 15.4 15.7 -0.5% +1.4% individuals’ sight accounts (+23%* y/y) 15.7 Corporate depos
Slide 14: Positive business momentum
POSITIVE BUSINESS MOMENTUM NET BANKING INCOME (RON m) Continued rise in revenues Near +9% y/y in both Q2 2019 and H1 2019, reflecting good commercial activity overall in spite of an environment marked by Y/Y legislative uncertainties 824 +9.1% 756 Other income 91 +2.6% 88 Net fee and 202 Double digi
Slide 15: Opex increase reflecting higher regulatory and labor costs
OPEX INCREASE REFLECTING HIGHER REGULATORY AND LABOR COSTS OPERATING EXPENSES (RON m) Y/Y Operating expenses integrating rising staff costs and higher contribution to FGDB & RF +2.3% 353 362 Staff costs increased (+5.0% y/y in Q2 2019 and +6.7% y/y in Staff expenses +5.0% H1 2019) in relation to sal
Slide 16: Improved asset quality
IMPROVED ASSET QUALITY GROSS LOANS – June 30, 2019 breakdown by segment and currency (RON bn) Loan portfolio market mix 70.6% on individuals market segment 29.4% on legal entities market segment 21.6 20.5 Consolidation of RON lending Share of RON denominated loans at 67.1% (vs 64.9% as of June 2018
Slide 17: Negative cost of risk
NEGATIVE COST OF RISK COST OF RISK EVOLUTION (RON m) Net cost of risk at -162 bps, driven by: 509 1,883 2,083 409 Significant net provision reversals, typical to upper part of the 309 economic cycle with low default rate and recoveries above 1,193 1,193 198 expectations 209 800 137 631 109 461 9 -10
Slide 18: Strong profitability, driven by solid operating performance and write-backs
STRONG PROFITABILITY, DRIVEN BY SOLID OPERATING PERFORMANCE AND NCR WRITE-BACKS Very strong operational performance GROSS OPERATING INCOME NET PROFIT GOI +15.0% y/y in Q2 2019 vs Q2 2018 due to solid revenue (RON m) (RON m) generation and operational expenses growing at a far slower pace GOI +8.5% y
Slide 19: Solid capital position
SOLID CAPITAL POSITION Comfortable level of solvency ratio SOLVENCY RATIO CAR of 20.0% at June 2019 end Increase in own funds on a yearly basis explained by higher reserves from revaluation of debt instruments +149bp +116bp -141bp -3bp accounted at fair value through other comprehensive income and h
Slide 20: Conclusions
A CONCLUSIONS BRD GROUPE SOCIETE GENERALE
Slide 21: Conclusions
CONCLUSIONS Sustained increase in revenues, pushed by robust business performance on individuals and large corporate segments, in a favorable macroeconomic environment Strong growth of BRD AM assets under management, reflecting BRD’s strategy to capture the potential of the alternative savings m
Slide 22: Q&A Session
.) Q&A SESSION BRD GROUPE SOCIETE GENERALE
Slide 23: Appendix
APPENDIX BRD GROUP – KEY FIGURES BRD - KEY FIGURES FOR BANK ONLY BRD - STOCK PRICE PERFORMANCE FINANCIAL CALENDAR FOR 2019 GLOSSARY – CLIENT SEGMENTATION
Slide 24: BRD Group | Key Figures
BRD GROUP | KEY FIGURES (1) Variations at constant exchange rate; (2) Bank only, including impact of prudential filters in Sep-17 and Dec-17; RON m Q2-2019 Q2-2018 Change H1-2019 H1-2018 Change Net banking income 824 756 +9.1% 1,609 1,480 +8.7% Operating expenses (362) (353) +2.3% (804) (738) +8.9%
Slide 25: BRD Group | Key Figures
BRD GROUP | KEY FIGURES (1) Variations at constant exchange rate; (2) Bank only, including impact of prudential filters in Sep-17 and Dec-17; Loans and deposits RON bn Jun-18 Dec-18 Jun-19 vs. Jun-18 vs. Dec-18 (1) 29.8 30.4 30.6 +2.3% +0.4% Net loans including leasing (RON bn) Retail 21.4 21.7 22.2
Slide 26: BRD | Key Figures for Bank Only
BRD | KEY FIGURES FOR BANK ONLY RON m Q2-2019 Q2-2018 Change H1-2019 H1-2018 Change Net banking income 822 757 +8.5% 1,565.61 1,438 +8.9% Financial results Operating expenses (339) (333) 1.8% (760) (697) +9.1% Gross operating income 482 424 +13.7% 805 741 +8.7% Net cost of risk 124 10 1191.3% 154 16
Slide 27: BRD | Stock Price Performance
BRD | STOCK PRICE PERFORMANCE Market capitalisation 4,000 EUR 1.9 bn 16.0 3,500 3,000 14.0 2,500 12.0 2,000 10.0 1,500 1,000 8.0 500 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 domestic companies
Slide 28: Financial Calendar for 2019
FINANCIAL CALENDAR FOR 2019 7th February: Preliminary 2018 financial results and annual press conference 18th April: General Shareholders Meeting for approving the 2018 annual financial results 3rd May: Presentation of the 1st quarter 2019 financial results 1st August: Presentation of the 2nd quarte
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
BRD Groupe Société Générale — H1 2019 Earnings Presentation on 6ix