Mbank Sa · GPW:MBK
Mbank Sa — BRE Bank — FY2007 Earnings Presentation
88 slides from Mbank Sa's earnings presentation, Jan 31, 2008
Slide 1: BRE Bank Group Results 2007 and Outlook 2008
BRE Bank Group Results 2007 and Outlook 2008 BRE Bank SA Management Board Presentation for Investors and Analysts 31 January 2008 1
Slide 2: Agenda
Agenda BRE Bank Group Results 2007 BRE Bank Group: A Year in Brief Key Achievements and Financial Results of the Business Lines Analysis of the Consolidated Financial Results Outlook 2008 Scenario for the Economy and the Banking Sector BRE Bank Group’s Outlook of Growth Appendix Detailed Results of
Slide 3: Agenda
Agenda BRE Bank Group Results 2007 BRE Bank Group: A Year in Brief Key Achievements and Financial Results of the Business Lines Analysis of the Consolidated Financial Results Outlook 2008 Scenario for the Economy and the Banking Sector BRE Bank Group’s Outlook of Growth Appendix Detailed Results of
Slide 4: BRE Bank Group: A Year in Brief
BRE Bank Group: A Year in Brief Key Achievements 2007 1 Dynamic growth of profit and efficiency 2 Retained growth rate of main balance sheet items 3 Improved profitability of all Business Lines 4 Proposed retention of entire 2007 profit 4
Slide 5: Best Financial Results since 2000
BRE Bank Group: A Year in Brief Key Achievements 2007 Best Financial Results since 2000 Profit (Loss) before Tax and Pre-tax ROE of the BRE Bank Group PLN M 1 200 35.9% 40% 1 000 28.0% 26.9% 30% 800 16.9% 18.4% 20% 600 955 10% 400 4.1% 493 576 200 335 338 0% 64 0 -414 -10% -200 -237 -11.0% -20% -400
Slide 6: High Profitability
BRE Bank Group: A Year in Brief High Profitability Continued and discontinued operations Profit before tax PLN 954.5 M ROE pre-tax 35.9% Cost/Income (C/I) 55.5% Capital adequacy ratio (CAR) 10.2% Unless indicated otherwise, the presented financial data refer to the BRE Bank Group 6
Slide 7: Dynamic Growth of Loans to Clients
BRE Bank Group: A Year in Brief Dynamic Growth of Loans to Clients Growth of Gross Loans (PLN B) +44.0% +44.0% Total lending up +56,2% YoY +36,7% YoY +37,5% YoY by 44.0% YoY 35 30 5.2 0.3 5.0 25 Loans to retail clients 20 15 34.4 up by 56.2% YoY 10 23.9 and 9.2% QoQ 5 Loans to corporate clients
Slide 8: Deposits Follow Lending
BRE Bank Group: A Year in Brief Deposits Follow Lending Growth Rate of Deposits (PLN B) +31.4% +31.4% Total deposits up 35 +37.1% YoY +24.6% YoY +351.2% YoY by 31.4% YoY 0.5 30 3.7 3,7 25 3.5 Continued growth of deposits 20 of retail clients (up by 37.1% YoY) 32.4 15 24.7 Deposits of corporate c
Slide 9: Growing Profitability of the Business Lines
BRE Bank Group: A Year in Brief Results of the Business Lines Growing Profitability of the Business Lines Corporations and Financial Markets Retail Banking (+PB) Profit before Tax by Business Line Q1-4 2007 v. Q1-4 2006 (PLN M) +36.6% +7.9% +98.2% 444.8 325.7 227.5 122.3 131.9 114.8 Corporates and I
Slide 10: Results of the Strategic Subsidiaries
BRE Bank Group: A Year in Brief Results of the Strategic Subsidiaries 53.9 Profit before Tax of Consolidated Subsidiaries 49.9 (PLN M) 47.4 Profit before tax 42.4 40.2 Q1-4 2006 of the strategic 26.9 29.6 Q1-4 2007 subsidiaries 22.3 21.6 21.3 18.0 18.0 in 2007 12.411.9 12.6 11.5 7.2 5.1 up by over 4
Slide 11: Agenda
Agenda BRE Bank Group Results 2007 BRE Bank Group: A Year in Brief Key Achievements and Financial Results of the Business Lines Analysis of the Consolidated Financial Results Outlook 2008 Scenario for the Economy and the Banking Sector BRE Bank Group’s Outlook of Growth Appendix Detailed Results of
Slide 12: Corporates and Institutions: Summary
Results and Achievements of the Business Lines 2007 Corporations and Financial Markets Corporates and Institutions: Summary Growing profitability Profit before tax in 2007 up by 36.6% YoY to PLN 444.8 M Business expansion Significant Corporate loans up contribution of Group by 38.0% YoY subsidiaries
Slide 13: Corporates and Institutions: Targets vs Actual 2007
Results and Achievements of the Business Lines 2007 Corporates and Institutions: Summary Target 2007 Actual 2007** 12.4 K clients, incl. 7,800 SMEs 5 Achieved Customer base up to 12.6 thousand companies, including 7,844 SMEs Loans up by PLN 1.1 B 5 Achieved Growth of loans to corporate clients in BR
Slide 14: Corporates and Institutions: Clients
Results and Achievements of the Business Lines 2007 Corporates and Institutions: Summary Clients Profitable acquisition: 7% growth in total income generated by customers acquired in 2007 v. 2006 income generated by customers acquired in 2006 Corporate Clients Total New Corporate Banking Customers Nu
Slide 15: Corporates and Institutions: Loans and deposits
Results and Achievements of the Business Lines 2007 Corporates and Institutions: Summary Loans and deposits 6.5% 9.3% Value of corporate loans Market share in Value of corporate deposits Market share in (at BRE Bank, PLN B) loans (at BRE Bank, PLN B) deposits 12.7 19.7 16.2 9.6 36% 44% 9.2 14.4 39%
Slide 16: Corporates and Institutions: Strategic Projects
Results and Achievements of the Business Lines 2007 Corporates and Institutions: Summary Strategic Projects 5 Sales Network Optimisation and refurbishment of the corporate network 4 Corporate Offices operational by the end of 2007 4 Corporate Branches refurbished Process improvement, continued r
Slide 17: Trading and Investments: Summary
Results and Achievements of the Business Lines 2007 Corporations and Financial Markets Trading and Investments: Summary Center of Competence for PLN Products Growing Since 2007 BRE is CoC profitability for PLN IR and FX products in Commerzbank Group Profit before tax in 2007 up by 7.9% YoY to PLN 13
Slide 18: Trading and Investments: Systems and Products
Results and Achievements of the Business Lines 2007 Trading and Investments: Summary 5 Systems Expansion of K+ capabilities Implementation of Murex Currency System Launching a project for a new e-commerce platform 5 Products Introducing commodity options Increasing supply of debt securit
Slide 19: Corporations and Financial Markets: Financial Results
Results and Achievements of the Business Lines 2007 Corporations and Financial Markets: Financial Results Financial Results of the Line, 2007 (PLN M) The profit before tax of the Line in 2007 up by 28.8% YoY to PLN 576.7 M Pre-tax profit Impairement amortisation Net fee and commission Net interest
Slide 20: BRE Bank Retail Banking: Summary
Results and Achievements of the Business Lines 2007 BRE Bank Retail Banking: Summary Growing Customer base contribution up by 1/4 to Group’s profit Achievements of 2007: Highest growth rate among Lines: 411.9 K clients (+25.3% YoY) Line’s profit before tax at PLN 227.5 M (including 50 thou. in 2007
Slide 21: Retail Banking: Summary of Q4 2007
Results and Achievements of the Business Lines 2007 BRE Bank Retail Banking: Summary of Q4 2007 Clients Accounts (thou.) +25.3% +25.3% (thou.) +26.7% +26.7% 1 916 2 038 2 425 1 818 2 268 1 729 2 153 253 1 626 409 1 914 2 047 239 371 391 232 354 222 337 211 2 029 2 172 1 525 1 629 1 825 1 921 1 289 1
Slide 22: Retail Banking (+PB): Summary of 2007
Results and Achievements of the Business Lines 2007 BRE Bank Retail Banking (+PB): Summary of 2007 MultiBank and mBank Private Banking Actual Actual Plan 2007 2.04 M Plan 2007 PLN 4.8 B PLN 4.7 B 2 M clients +2.0% +2.0% +2.1% +2.1% AuM* PLN 13.1 B PLN 519 M PLN 12.2 B PLN 436 M +7.4% +7.4% +19.0% +1
Slide 23: Retail Banking: Mortgage Loans
Results and Achievements of the Business Lines 2007 BRE Bank Retail Banking: Summary of 2007 Mortgage Loans Mortgage Loans +57.8% +57.8% (PLN M) 11 101 Successful year 10 353 9 089 in mortgage loans market 8 228 7 038 6 560 5 522 6 193 Mortgage loans 4 412 5 069 up by PLN 4.1 B in 2007 (+57.8% YoY
Slide 24: Retail Banking: Consumer Finance at mBank
Results and Achievements of the Business Lines 2007 BRE Bank Retail Banking: Summary of 2007 Consumer Finance at mBank mBank sales Growth of sales in 2007 vs. 2006 PLN 318.2 M +127% cash loans sales 70.8 thousand +80% credit cards 32.8 thousand +407% co-brand cards PLN 19 M +65% car loans sales 24
Slide 25: Expansion to Czech and Slovak Markets
Results and Achievements of the Business Lines 2007 BRE Bank Retail Banking: Summary of 2007 Expansion to Czech and Slovak Markets 66 66 thou. thou. accounts accounts Business As at 30 January 2008 in the Czech Rep. and Slovakia 45 45 thou. thou. launched on clients clients 25.11.2007 As at 30 Janua
Slide 26: BRE Ubezpieczenia
Results and Achievements of the Business Lines 2007 BRE Ubezpieczenia Policies sold: 490 thou. 2007 targets significantly exceeded Premiums: PLN 313 M Profit/Loss before tax of BRE Ubezpieczenia: -PLN 0.4 M Target Total result* of the project: +PLN 43 M PLN 1.2 M Contribution of Insurance Commission
Slide 27: Retail Banking (+PB): Financial Results
Results and Achievements of the Business Lines 2007 BRE Bank Retail Banking (+PB): Financial Results Structure of the Profit before MultiBank; Profit before Tax of the Segment Tax of Retail Banking 81 (by quarter**, PLN M) 69.3 70.9 Q1-4 2007 (PLN M) 57.5 48.9 43.3 -27.1 mBank Other; CZ & SK -12.2 m
Slide 28: Structure of the Profit of the BRE Bank Group
Results and Achievements of the Business Lines 2007 Structure of the Profit of the BRE Bank Group 1161; 716; 56% Income Cost 57% 694; 467; 34% 37% 210; 10% 78; 6% Pre-tax profit/loss Corporates and Institutions 46.6% 445 Trading and Corporations and Investments Financial Markets Retail Banking (+PB)
Slide 29: Agenda
Agenda BRE Bank Group Results 2007 BRE Bank Group: A Year in Brief Key Achievements and Financial Results of the Business Lines Analysis of the Consolidated Financial Results Outlook 2008 Scenario for the Economy and the Banking Sector BRE Bank Group’s Outlook of Growth Appendix Detailed Results of
Slide 30: P&L of Continued Operations
Analysis of the Results, Q1-4 2007 P&L of Continued Operations (PLN M) Q1-4 2007 Q1-4 2006 YoY Total income* 2 202.0 1 624.9 +35.5% Total cost (1 279.6) (1 044.4) +22.5% Operating profit** 922.4 580.6 +58.9% Net provisions (76.8) (46.0) +67.1% Profit before tax 845.6 534.5 +58.2% Net profit*** 661.0
Slide 31: Exceptional events 2007 and Q4 2007
Analysis of the Results, Q1-4 2007 Exceptional events 2007 and Q4 2007 Impact of Expectional Events on the BRE Bank 8.6 Group’s Profit before Tax 2007 105.2 -21.9 -17.5 (PLN M) The largest one-off transaction impacting the BRE Bank Group’s 954.5 consolidated profit before tax 880.3 was the sale of
Slide 32: Significant Growth of Income from the Core Business
Analysis of the Results, Q1-4 2007 Significant Growth of Income from the Core Business Strong growth in main income items Net interest income, the largest income item, up by 41.9% YoY in 2007 BRE Bank Group Income 2007 v. 2006 Interest margin increased (PLN M) from 2.1% in 2006 +35.5% +35.5% to
Slide 33: Costs Under Control
Analysis of the Results, Q1-4 2007 Costs Under Control C/I* at 58.1% in 2007 Overhead costs (+depreciation) Overhead costs (+depreciation) at PLN 370.6 M in Q4 2007, of the BRE Bank Group up by 24.1% QoQ by quarter and up by 29.1% comparing to Q4 2006 +24.1% Cost, +29.1% +24.1% +29.1% QoQ QoQ C/I
Slide 34: Credit Provisions
Analysis of the Results, Q1-4 2007 Credit Provisions Further improvement of the quality of the portfolio Net provisions driven by impairment provisions growing with the growth of the risk portfolio Net Credits and Loans Impairment Provisions BRE Bank Portfolio Quality: Comparison (consolidated data,
Slide 35: Management Board's Recommendation of 2007 Profit Distribution
Summary of 2007 Management Board’s Recommendation of 2007 Profit Distribution Advantageous market trends and sustained cost discipline ensured high growth in profitability, but very dynamic growth of balance sheet items exerted pressure on the consolidated capital adequacy ratio Results 2007 Capital
Slide 36: The Bank Keeps a Safe Capital Adequacy Ratio
Summary of 2007 The Bank Keeps a Safe Capital Adequacy Ratio Relation between Capital Adequacy Ratio (CAR) and Risk Weighted Assets (RWA) Dynamic growth in consolidated risk- 60 13% weighted assets (RWA): up by PLN 10.3 billion 50 12% or 35.8% in 2007 40 The consolidated 11% capital adequacy rat
Slide 37: Summary of 2007
Summary of 2007 1 The BRE Bank Group profit before tax up by 65.8% YoY to PLN 954.5 million, the highest profit since 2000, pre-tax ROE at 35.9% 2 Lending up by 44.0%, customer deposits up by 31.4% 3 Growing profitability of Business Lines: - Retail Banking & PB up by 98.2%, - Corporations and Finan
Slide 38: Agenda
Agenda BRE Bank Group Results 2007 BRE Bank Group: A Year in Brief Key Achievements and Financial Results of the Business Lines Analysis of the Consolidated Financial Results Outlook 2008 Scenario for the Economy and the Banking Sector BRE Bank Group’s Outlook of Growth Appendix Detailed Results of
Slide 39: Scenario for the Economy and the Banking Sector
Outlook 2008 Scenario for the Economy and the Banking Sector Economy GDP 5-5.5% Investments 15.2% (YoY growth) (YoY growth) Inflation 3.8% PLN/EUR 3.64 (at year’s end) (at year’s end) Interest rates 5.75-6% PLN/US$ 2.56 (at year’s end) (at year’s end) Unemployment 10% (at year’s end) Total deposits
Slide 40: Agenda
Agenda BRE Bank Group Results 2007 BRE Bank Group: A Year in Brief Key Achievements and Financial Results of the Business Lines Analysis of the Consolidated Financial Results Outlook 2008 Scenario for the Economy and the Banking Sector BRE Bank Group’s Outlook of Growth Corporates and Institutions T
Slide 41: BRE Bank Group Targets 08
BRE Bank Group’s Outlook of Growth BRE Bank Group Targets 2008 2008/2007 change Total deposits +18.5% Total loans +34.0% Total assets +21.0% 41
Slide 42: Corporates and Institutions: Targets 2008
BRE Bank Group’s Outlook of Growth Corporates and Institutions: Targets 2008 1 Grow the number of clients with a high income potential to 13.4 thousand clients, including 8,600 SME clients 2 Grow volumes of loans to corporates by PLN 2 B, including EU loans up by 17% Targets 2008 3 Grow the share of
Slide 43: Trading and Investments: Targets 2008
BRE Bank Group’s Outlook of Growth Trading and Investments: Targets 2008 1 Defend No 1 Primary Dealer Status and Top 3 Position in CPs, Corp & Bank Bonds 2 Increase distribution of structured & derivative products to Corporate & Retail client base Targets 2008 3 Sale of Vectra and remaining Novitus
Slide 44: Retail Banking (+PB): Targets 2008
BRE Bank Group’s Outlook of Growth BRE Bank Retail Banking (+PB): Targets 2008 1 Maintain the share in mortgage loans sales 2 Continue expansion in the consumer finance market and the related expansion of the sales network Targets 2008 3 Develop savings products, including structured products 4 mBan
Slide 45: Retail Banking (+PB): Targets 2008
BRE Bank Group’s Outlook of Growth BRE Bank Retail Banking (+PB): Targets 2008 Actual 2007 Growth Target 2008 Loans PLN 13.6 B +42% PLN 19.4 B Savings & Investments PLM 18.4 B +25% PLN 23.0 B incl.: deposits PLN 12.7 B +17% PLN 14.9 B Clients 2.04 M +18% 2.4 M 45
Slide 46: Outlook 2008 Summary
Outlook 2008 Summary Despite Despitethe thevolatility volatilityofofglobal globalmarkets markets and andthe theexpected expectedslow-down slow-downofofeconomic economicgrowth growthininthe theUSA USAand andWestern WesternEurope Europe we weexpect expectstable stablegrowth growthof ofPoland’s Poland’
Slide 47: BRE Bank Group's Mid-term Financial Targets
Outlook 2008 BRE Bank Group’s Mid-term Financial Targets Mid-term Financial Tagets Upgraded Targets: Lines’ Contribution to Group’s Profit 120 5% ROE >20% 100 4% 16% pre-tax 80 19% 35% 24% 60 C/I <60% 40 106% 77% 60% 65% 20 CAR ≥10% 0 -11% -20 2005 2006 2007 2010E Corporates & Markets Retail Banking
Slide 48: Agenda
Agenda BRE Bank Group Results 2007 BRE Bank Group: A Year in Brief Key Achievements and Financial Results of the Business Lines Analysis of the Consolidated Financial Results Outlook 2008 Scenario for the Economy and the Banking Sector BRE Bank Group’s Outlook of Growth Appendix Detailed Results of
Slide 49: Agenda
Agenda Appendix Detailed Results of the Business Lines, Q4 2007 Retail Banking and Private Banking Corporations and Financial Markets Additional Information: Selected Financial Data Macroeconomics 49
Slide 50: Internet Platform – SUS and Insurance Center
Appendix BRE Bank Retail Banking: Internet Platform – SUS and Insurance Center ‘It’s hard to top the Car Insurance Supermarket’ Newsweek ‘mBank’s offer is the most attractive’ Pentor Research International The Car Insurance Supermarket (mBank) was launched on 13 February 2007 and the Insurance Cen
Slide 51: Retail Banking: Savings
Appendix BRE Retail Banking: Savings BRE Bank customers quickly react to changing conditions on the financial market Debt Investmet Fund Assets Structure securities at Quarter End of Investment 4,1% 2 904 Funds Assets (PLN Mł) 2 719 Money 2 434 market 2 002 7,2% 1 588 1 245 995 1 077 Equity Hybrid 6
Slide 52: Retail Banking vs. the Market: Deposits and Investment Funds
Appendix BRE Bank Retail Banking vs. the Market: Deposits and Investment Funds Deposits and Investment Funds (PLN B) 2007 BRE Bank Retail 1.3% 1.7% 2.1% 2.6% 3.1% Banking Line 400 12,5 350 continues to 300 grow above 10 250 the market 7,5 200 5 150 BRE Bank (LHS) 100 2,5 Market (RHS) 50 2003 2004 20
Slide 53: Retail Banking: Investment Funds
Appendix BRE Bank Retail Banking: Investment Funds MultiBank Structure of Assets: MultiBank Investment Fund Assets MultiBank Investment Funds at Quarter End (PLN M) Investment fund assets grew Debt by PLN 205 M in 2007 securities 713 661 4% Money market 578 7% 473 373 The share of equity funds i
Slide 54: mBank – eBroker, MultiBank – Brokerage Service
Appendix BRE Bank Retail Banking: mBank – eBroker, MultiBank – Brokerage Service Dynamic growth Opened Investment 74,4 83,0 Accounts of brokerage services (thou., incremental) 62,3 for Retail Banking 46,1 customers 34,2 37,3 28,1 23,5 eBroker trading exceeded PLN 332 M 14,1 17,3 11,0 12,4 9,4 in D
Slide 55: Retail Banking vs. the Market: Loans
Appendix BRE Bank Retail Banking vs. the Market: Loans BRE Retail Banking Loans (PLN B) 2007 5.2% Retail loans portfolio 15 1.2% 2.1% 3.0% 4.5% 250 up to PLN 13.1 B 12,5 200 10 150 Our market share 7,5 in retail loans 100 5 up to 5.2% at the end of December 2007 50 2,5 2003 2004 2005 2006 2007 0 0 n
Slide 56: Retail Banking vs. the Market: Housing Loans
Appendix BRE Bank Retail Banking vs. the Market: Housing Loans In 2007 we sold PLN 7.8 B of new mortgage loans, remaining one of the top market leaders Mortgage Loans: Market Leaders Housing Loans (PLN B) by value of sales 2007 Jan-Nov 2007 (PLN B) 2.9% 5.1% 6.5% 9.0% 9.5% 120 12 100 13.1 10 80 8 60
Slide 57: Mortgage Loans: Portfolio Structure and Quality
Appendix BRE Bank Retail Banking: Mortgage Loans: Portfolio Structure and Quality BRE Bank’s Mortgage Loans Portfolio Structure of the Retail Loans Portfolio (Retail Morgage Loans to individuals) (Household Loans) as at 31 December 2007 5% 6% Total PLN FX 3% Balance-sheet value 10.7 2.2 8.5 (PLN B)
Slide 58: Acquisition of Microenterprises
Appendix BRE Bank Retail Banking: Acquisition of Microenterprises 235.6 thousand microenterprises served by BRE Bank Number of Microenterprises Served by BRE Bank Retail Banking Retail Banking (thou.) 62.3 Microenterprise customer base 55.4 59.1 up by 50 thousand in 2007 53.2 50.8 48.0 39.0 42.5 4
Slide 59: Growth of Sales, Q4 2007
Appendix BRE Bank Retail Banking: Growth of Sales, Q4 2007 mBank Customers Deposits Loans (thou.) +26.3% (PLN M) +43.8% (PLN M) +77.4% 505 104 964 711 78 72 752 530 85 617 7629 609 5399 1629 -16 4 894 6 665 4183 64 63 1290 1290 270 5314 5913 562 3043 328 3043 76 556 337 1140 257 1015 4035 05 06 06 0
Slide 60: Growth of the Distribution Network
Appendix BRE Bank Retail Banking: Growth of the Distribution Network mBank Distribution Network (in Poland) MultiBank Branches Total: Total: 7 24 54 56 61 62 65 67 75 83 103 35 46 72 82 83 84 84 93 101 101 109 44 44 44 225 41 139 38 38 38 38 27 34 4 10 4 13 46 47 50 52 56 58 61 52 57 57 65 22 40 42
Slide 61: Agenda
Agenda Appendix Detailed Results of the Business Lines, Q4 2007 Retail Banking and Private Banking Corporations and Financial Markets Corporate Customers and Institutions Trading and Investments Additional Information: Selected Financial Data Macroeconomics 61
Slide 62: Corporates and Institutions: Loans and Deposits
Appendix Corporates and Institutions: Loans and Deposits 8% Corporate Loans Volume Corporate Deposits Volume (BRE Bank, PLN B) (BRE Bank, PLN B) 19.7 11.8 12.2 12.7 19.7 18.2 11.0 11.5 16.2 16.6 10.4 10.1 9.6 9.2 14.4 49% 53% 44% 9.134% 34% 36% 48% 52% 12.9 12.7 13.3 8.4 34% 10.9 39%7.3 37% 52% 10.7
Slide 63: Corporates and Institutions: Market Share
Appendix Corporates and Institutions: Loans and Deposits: Market Share BRE Bank’s Market Share in Corporate Loans and Deposits* 12,0% 10,0% 8,0% 6,0% Source: NBP reports 4,0% Au 5 Au 6 Au 7 Ap 5 Fe 5 Ap 6 Fe 6 Ap 7 07 De 5 De 6 De 7 O 5 O 6 O 7 Ju 5 Ju 6 Ju 7 0 0 0 0 0 0 0 0 0 0 0 0 0 0 r-0 r-0 r-0
Slide 64: Corporates and Institutions: Cash Management
Appendix Corporates and Institutions: Cash Management Cash Management – Strategic Product Line Supporting Long-term Customer Relations Direct Debit Identification of Mass Payments Identification of Trade Payments (thou. transactions) (M transactions) (thou. transactions) +28.2% +28.2% stable stable
Slide 65: Foreign Trade Service and Risk Management Products
Appendix Corporates and Institutions: Foreign Trade Service and Risk Management Products The market position in foreign trade service The profit on sales of financial instruments and the launch of many innovative product solutions to corporate customers helped to grow the revenue was close to PL
Slide 66: Good Market for Leasing and Factoring
Appendix Corporates and Institutions: Good Market for Leasing and Factoring BRE Leasing Intermarket Group #3 in Poland with a market share of 9.4% The pre-tax profit of Intermarket Group companies (at the end of 2007) was PLN 51.9 M in 2007; Value of leasing contracts the pre-tax profit of Pol
Slide 67: BRE Bank Hipoteczny (BBH)
Appendix Corporates and Institutions: BRE Bank Hipoteczny (BBH) Loans Portfolio (PLN M) Profit before Tax (PLN M) Balance-sheet exposure 86 95 108 100 511 569 +5.4% +5.4% 118 466 Housing 190 427 loans** +36.8% +36.8% 399 213 2595 Local 2 386 government 40.2 31.0* 42.4 2 196 1 967 loans 1 643 1 775 C
Slide 68: Dom Inwestycyjny BRE Banku (DI BRE)
Appendix Corporates and Institutions: Dom Inwestycyjny BRE Banku (DI BRE) # DI BRE Accounts (thou.) After Q4 2007 gross profit of PLN 53.9 M # DI BRE accounts 23.0 (doubled versus 2006) eBroker (mBank) 83.9 DI BRE equities trading Brokerage Service (MultiBank) 12.7 at 30.7 B PLN after Q4 2007 v.
Slide 69: Agenda
Agenda Appendix Detailed Results of the Business Lines, Q4 2007 Retail Banking and Private Banking Corporations and Financial Markets Corporate Customers and Institutions Trading and Investments Additional Information: Selected Financial Data Macroeconomics 69
Slide 70: Trading and Investments: Market Share and Position
Appendix Trading and Investments: Market Share and Position BRE Bank’s Market Share* BRE Bank in the Market in Investment Banking Services of Non-Treasury Debt** (BRE – in navy blue) As at 31 December 2007 (PLN M) Market 13 757.8 13 871.5 BRE Bank 18.4% 19.9% 38.0% 10 831.1 2 521.2 2 983.7 2 456.6 T
Slide 71: Trading and Investments: Proprietary Investments
Appendix Trading and Investments: Proprietary Investments Major equity investments Equity stake as at 31 December 2007 At the end of 2007, the Bank’s proprietary investments portfolio Vectra SA* 19.95% was PLN 434 M at cost PZU SA 0.76% Compared to the end of Q3 2007, the value of portfolio at c
Slide 72: Agenda
Agenda Appendix Detailed Results of the Business Lines, Q4 2007 Additional Information: Selected Financial Data Consolidated P&L under IFRS Net Interest Income Structure, Interest Margin Net Commission Income Structure Cost Structure Analysis of the Balance Sheet: Assets and Liabilities Structure NP
Slide 73: Consolidated Profit and Loss Account under IFRS
Appendix Additional Information: Selected Financial Data Consolidated Profit and Loss Account under IFRS PLN’000 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 By quarter * Net interest income 198 777 227 536 241 394 267 770 291 083 Net commission income 127 712 142 857 146 631 139 004 135 721 Dividend inc
Slide 74: Net Interest Income
Appendix Additional Information: Selected Financial Data Net Interest Income The net interest income up quarter by Net Interest Income Structure (by quarter, consolidated figures, PLN M) quarter: PLN 291.1 M in Q4 2007 v. PLN 267.8 M in Q3, PLN 241.4 M in 690 1 41 Other Q2, PLN 227.5 M in Q1 2007
Slide 75: Interest Income Structure
Appendix Additional Information: Selected Financial Data Interest Income Structure Structure of Net Interest Income Net Interest Income, Q4 2007 Q4 2007 by Business Line (consolidated figures, %) (consolidated figures, PLN M) Debt securities 25.1 -3.2 -7.8 6% Other 0% 155.3 Loans and advances 292 75
Slide 76: Net Commission Income
Appendix Additional Information: Selected Financial Data Net Commission Income Net Commission Income Structure (consolidated figures, PLN M) Net commission income in Q4 down modestly QoQ (by 2.4%) 220 but up by 35.5% YoY 200 Other The largest item, lending commissions, 180 28 42 up by 20.1% QoQ
Slide 77: Commission Income Structure
Appendix Additional Information: Selected Financial Data Commission Income Structure Structure of Net Commission Income Net Commission Income, Q4 2007 Q4 2007 by Business Line (consolidated figures, %) (consolidated figures, PLN M) and trade finance Other commissions 15% and fees 7.4 5% -0.4 Clients
Slide 78: Overhead Cost Structure
Appendix Additional Information: Selected Financial Data Overhead Cost Structure Structure of Overhead Costs BRE Bank Group’s C/I (+Amortisation/Depreciation) by quarter, PLN M, consolidated figures (based on average balances) 7.7 360 41.4 64.3 6.6 8.7 320 7.1 8.9 280 45.4 57.7 58.0 56.9 58.1 43.6 4
Slide 79: Loans & Deposits
Appendix Additional Information: Selected Financial Data Loans & Deposits Loans Deposits (PLN B) (PLN B, net) +46.3% +46.3% +31.2% +31.2% 31.6 33.7 32.4 29.0 29.3 29.0 25.8 24.7 26.7 23.0 +12% +12% +12% +12% +9% +9% +7% +7% +8% +8% +10% +10% -1% -1% +12% +12% 31.12.06 31.03.07 30.06.07 30.09.07 31.1
Slide 80: Balance Sheet Analysis: Assets
Appendix Additional Information: Selected Financial Data Balance Sheet Analysis: Assets Structure of Assets Credits and Loans to Customers* (PLN B) Portfolio by Customer Category (PLN B) 60 35 0.6 2% 55 0.8 3% 50 23% 26% 30 0.9 25% 14.5 3% 45 22% 12.0 1.0 13.9 12.1 25 4% 12.7 40 27% 10.0 1.6 3% 2.3
Slide 81: Balance Sheet Analysis: Liabilities
Appendix Additional Information: Selected Financial Data Balance Sheet Analysis: Liabilities Structure of Liabilities Structure of Deposits (PLN B) (PLN B) 60 35 55 4.9 9% 0.7 2% 50 4.1 8% 3.4 6% 30 0.1 0% 0.2 1% 45 4 8% 3.3 6% 2.9 5% 1% 3.6 8% 3.1 6% 0.2 9% 3.4 7% 40 3.6 2.8 6% 3.5 7% 25 0.2 1% 2.6
Slide 82: Structure of BRE Bank's Risk Portfolio
Appendix Additional Information: Selected Financial Data Stucture of BRE Bank’s Risk Portfolio Continued decrease of NPLs as a percentage of the loans portfolio, falling ratio of provisions to default exposures due to write-off of part of the portfolio 10.8% 9.2% 8.5% 7.2% 5.9% 5.6% 5.5% 4.8% 4.4% 4
Slide 83: Non-performing Loans: Portfolio Structure
Appendix Additional Information: Selected Financial Data Non-performing Loans: Portfolio Structure* Steadily decreasing share of NPLs in the loans portfolio (balance-sheet) 31.12.2007 31.12.2006 31.12.2005 Expo- % Provision Expo- % Provision Expo- % Provisio sure s% sure s% sure ns % Steady improvem
Slide 84: Agenda
Agenda Appendix Detailed Results of the Business Lines, Q4 2007 Additional Information: Selected Financial Data Macroeconomics 84
Slide 85: Macroeconomics: GDP and Labour Market
Appendix Macroeconomics GDP and Labour Market GDP growth (%) GDP growth: High but less balanced Consumption Investment Net Exports 10 Others GDP 8 6 GDP growth at 6.7% in Q1-3 2007 4 and close to 6.5% (est.) in all of 2007 2 Economic growth mainly driven 0 by domestic demand, in particular -2 fa
Slide 86: Macroeconomics: Inflation and NBP Interest Rates
Appendix Macroeconomics Inflation and NBP Interest Rates Fast growing inflation CPI (% YoY), MPP inflation target, NBP intervention rate(%) forces monetary policy 7% CPI 6% NBP to tighten 5% 4% CPI crossed the ceiling of the band 3% of allowed deviation from the NBP inflation target 2% in November
Slide 87: Loans and Deposits in the Banking Sector
Appendix Macroeconomics Loans and Deposits in the Banking Sector Growth of loans weakens, (%, YoY) Corporates growth of corporate 45 Deposits Loans 40 deposits slumps 35 30 25 20 Growing cost of corporates and growing demand 15 for funds necessary to finance investments slowed 10 5 down growth in
Slide 88: Contact
Contact BRE Bank’s Investor Relations Officers at your service: Jakub Korczak Director, Investor Relations Direct dial: +48 22 829 04 79 Secretariat: +48 22 829 02 98 Fax: +48 22 829 02 97 E-mail: jakub.korczak@brebank.pl or Joanna Filipkowska Tel.: +48 22 829 04 53 Analyst, Investor Relations Fax: