Moneta Money Bank As · PSECZ:MONET
Moneta Money Bank As — Q1 2018 Earnings Presentation
48 slides from Moneta Money Bank As's earnings presentation, May 10, 2018
Slide 1: 1Q 2018 Results
INSIDE INFORMATION MANDATORY DISCLOSURE ACCORDING TO IFRS Published: May 10, 2018, 07:00 CET Consolidated, unaudited 1Q 2018 May 10, 2018
Slide 2: 2018 Financial Performance Against Guidance
2018 FINANCIAL PERFORMANCE AGAINST GUIDANCE Updating guidance, targeting consolidated net profit of CZK 3.5 billion, amid exceptionally low Cost of Risk RESULTS 2018 GUIDANCE METRICS 1Q 2017 1Q 2018 Initial1 Revised LOAN BOOK GROWTH (YoY)2 5.7% 12.6% ≥ 9% ≥ 9% TOTAL OPERATING INCOME (CZK) 2.5bn 2.4b
Slide 3: Executing on Strategy: Portfolio growth supported by digital capabilities
EXECUTING ON STRATEGY Portfolio growth supported by improved digital capabilities and underpinned by strong capital adequacy ratio 12.6% YoY growth in gross performing loans outperforming guidance DIGITAL CAPABILITIES 16.1% YoY increase in RETAIL gross performing loan balance DIGITAL CAPABILITIES •
Slide 4: Generated consolidated net profit of CZK 1.2 billion
EXECUTING ON STRATEGY Generated consolidated net profit of CZK 1.2 billion, +12.8% increase compared to 1Q 2017 METRICS (CZK m, %) 1Q’18 1Q’17 CHANGE CZK 2.4bn of operating income, down 5.8% YoY, in line with guidance NET INTEREST INCOME 1,796 1,892 (5.1%) CZK 103m higher operating expenses NET FEE
Slide 5: Key highlights
EXECUTING ON STRATEGY Key highlights Pricing Legacy NPL New client Completed first Pay-out of 2017 stabilization in monetization acquisition phase of branch dividend of consumer loan continued accelerated network CZK 4.1bn pre- production optimization tax approved 30bps uplift CZK 475 million 8,202
Slide 6: Annual General Meeting Summary of Results
ANNUAL GENERAL MEETING SUMMARY OF RESULTS Held on 25 April 2018 with quorum of more than 56% 01. 02. 03. 04. Annual Annual Resolution on Appointment Consolidated Separate distribution of of KPMG Česká Financial Financial profit of republika Audit, Statements Statements MONETA s.r.o. to conduct of MO
Slide 7: Macroeconomic Environment
MACROECONOMIC ENVIRONMENT Macroeconomic outlook remains positive, no imminent rate hikes expected, MONETA consumer loan pricing above market STRONG GDP OUTLOOK KEY MACROECONOMIC INDICATORS1 INDICATOR 4Q’16 1Q’17 2Q’17 3Q’17 4Q’17 1Q’18 4.6% 3.9%1 Export2 0.4% 9.1% 4.8% 4.1% 4.4% n/a Industrial 3.3%
Slide 8: Digital Transformation Progressing
DIGITAL TRANSFORMATION PROGRESSING Significant growth of mobile banking acceptance confirming phenomenal success of Smart Banka DIGITAL BANKING PENETRATION DOUBLED (number of clients in thousands) DELIVERIES • 91.8% YoY growth in Smart Banka; Registered Smart registered users reaching 210 thousand +
Slide 9: Strong Online Lending Performance
STRONG ONLINE LENDING PERFORMANCE Continued increase in online originated lending in both consumer and small business segments CONSUMER LOAN VOLUMES ORIGINATED ONLINE1 (CZK m) SMALL BUSINESS LOANS ORIGINATED ONLINE1 (CZK m) 30% of 25% of production2 production2 +41.5% 1,580 1,376 161 372 1,208 Fully
Slide 10: Client Base Evolution
CLIENT BASE EVOLUTION Improving client acquisition by 63% year on year NET CLIENT ACQUISITION1 (number of clients in thousands) 5.0 7.0 6.7 6.8 8.2 16.9 18.1 17.7 18.7 18.6 New -11.9 -11.1 -11.0 -11.9 -10.4 Left 1Q 2Q 3Q 4Q 1Q 2017 2018 Write-offs -24.8 -12.4 -12.4 -6.9 -6.9 and closures CLIENT BASE
Slide 11: Gross Performing Loan Portfolio Development
GROSS PERFORMING LOAN PORTFOLIO DEVELOPMENT1 Solid performance in retail and commercial segments, supported by strong growth in mortgages and small business lending RETAIL GROSS PERFORMING LOAN BALANCE (CZK bn) RETAIL • 35.9% YoY growth in gross performing +16.1% mortgage balance 61.2 63.7 56.9 58.7
Slide 12: Gross Performing Retail Loan Portfolio Development
GROSS PERFORMING RETAIL LOAN PORTFOLIO DEVELOPMENT1 Strong growth across all retail products except credit cards and overdrafts MORTGAGE BOOK DEMONSTRATING STRONG GROWTH (CZK bn) AUTO LENDING BALANCE EXHIBITS STRONG PERFORMANCE (CZK bn) +35.9% +25.5% 22.0 2.7 2.8 20.1 2.5 17.5 18.6 2.3 16.2 2.2 1Q 2
Slide 13: Gross Performing Commercial Loan Portfolio Development
GROSS PERFORMING COMMERCIAL LOAN PORTFOLIO DEVELOPMENT1 Accelerated growth in small business lending complemented by strong increase in investment and working capital lending SMALL BUSINESS INSTALMENT LENDING BALANCE (CZK bn) WORKING CAPITAL BALANCE (CZK bn) +15.0% 2.6 9.5 9.8 +90.5% 9.2 8.5 9.0 2.2
Slide 14: Solid Balance Sheet Fundamentals
SOLID BALANCE SHEET FUNDAMENTALS Maintaining highly liquid balance sheet with lower volume of opportunistic repo operations BALANCE SHEET INFLUENCED BY REPO OPERATIONS (CZK bn) HIGHLIGHTS 184.8 184.8 • CZK 17.9bn YtD decrease in reverse repo Cash 6.8 11.1 Repo operations operations Investment Portfo
Slide 15: Fully self-funded with low cost of funds
SOLID BALANCE SHEET FUNDAMENTALS Fully self-funded with low cost of funds CUSTOMER DEPOSITS1 (CZK bn) DUE TO BANKS AND REPO OPERATIONS2 (CZK bn) +4.6% 138.1 39.1 132.0 1.4 Term deposits 7.2 Deposits on demand 6.7 -55.7% and other & term deposits Saving accounts 48.9 51.2 Repo operations 32.6 17.3 1.
Slide 16: Capital Management
CAPITAL MANAGEMENT Progressively moving towards 15.5% of medium term capital target ACCOUNTING EQUITY (CZK m) REGULATORY EQUITY (CZK m) -3.6% -11.3% 27,268 26,299 22,420 25,763 20,653 848 1,436 19,887 1,301 26,420 24,462 24,863 2016 2017 1Q’18 2016 2017 1Q’18 Intangible Tangible assets equity CAPITA
Slide 17: Excess Capital Management
EXCESS CAPITAL MANAGEMENT Existing excess capital expected to be used for 2017 dividend payment, organic growth and investment initiatives in 2018 EXCESS CAPITAL EVOLUTION (CZK m) 5,478 (954) 104 (1,433) 2,278 (498) (420) 1,289 (638) (223) (128) 31 Dec 2016 Excess capital Increase Change in Goodwill
Slide 18: Net Interest Income Overview
NET INTEREST INCOME OVERVIEW Slow down in erosion of NII, management believes reversal point is approaching due to margin stabilization and growth (CZK m) ACTUAL FORECAST 0.2% (4.1%) (2.4%) (6.2%) YoY change (9.1%) (13.0%) (13.4%) (11.9%) (14.3%) 1,977 1,892 1,824 1,804 1,797 1,775 ~ 1,760 ~ 1,800 ~
Slide 19: Loan Portfolio Margin Evolution
LOAN PORTFOLIO MARGIN EVOLUTION Retail yield impacted mainly by back book repricing on consumer loans; continued stabilisation in commercial yield RETAIL PORTFOLIO YIELD 10.7% 10.1% LOAN PORTFOLIO YIELD 9.4% 9.0% 8.5% 7.9% 7.2% 6.8% 6.4% 6.2% 6.0% 5.7% 4Q 1Q 2Q 3Q 4Q 1Q 2016 2017 2018 COMMERCIAL POR
Slide 20: Retail Loan Portfolio Margin Evolution
RETAIL LOAN PORTFOLIO MARGIN EVOLUTION Decline in yield driven by consumer loans rate pressure, back book repricing and mix more balanced towards secured loans CONSUMER LOAN PORTFOLIO YIELD 13.0% 12.4% 11.7% 11.1% RETAIL PORTFOLIO YIELD 10.6% 10.3% 10.7% 10.1% 9.4% 9.0% 8.5% 7.9% 4Q 1Q 2Q 3Q 4Q 1Q 2
Slide 21: Net Fee and Commission Income
NET FEE AND COMMISSION INCOME Share of 3rd party income increasing to 28.5% of net fee and commission income NET FEE & COMMISSION INCOME (CZK m) THIRD PARTY COMMISSION INCOME DRIVEN BY INVESTMENT FUNDS UP 37% AND INSURANCE UP 9% YoY, (CZK m) Investment funds Insurance -2.8% 458 445 +14.0% 127 111 29
Slide 22: Operating Expenses
OPERATING EXPENSES Operating expenses flat year on year when adjusted for one-off provision release in 1Q’17 OPERATING EXPENSES (CZK m) HIGHLIGHTS • 5.5% YoY increase to CZK 593m in personnel expenses : 1,236 excl. one-off 8.9% • Primarily driven by wage inflation and change in FTE provision release
Slide 23: Continued Improvement in Asset Quality
CONTINUED IMPROVEMENT IN ASSET QUALITY Cost of Risk positively impacted by legacy NPL sales with gain of CZK 475 million DECREASING NPL PORTFOLIO, COVERAGE IMPACTED BY IFRS 9 (CZK m) COST OF RISK IMPACTED BY LEGACY NPL SALES (CZK m) 5.6% 4.1% 3.7% NPL ratio Annualised Total NPL Cost of Risk 81.7% 77
Slide 24: NPL Development Overview
NPL DEVELOPMENT OVERVIEW Continued positive portfolio performance and proactive NPL management further reduce NPL stock GROSS NPL WALK (CZK m) 2.0% of average 1.5% of average 1.2% of average performing receivables1 performing receivables 1 performing receivables 1 2,165 1,783 7,483 (1,841) 1,467 6,5
Slide 25: Asset Quality: IFRS 9 Impact on Allowances
ASSET QUALITY Impact of IFRS 9 implementation into allowances for lending portfolio ALLOWANCES FOR NON-IMPAIRED PORTFOLIO1 (CZK m) ALLOWANCES FOR IMPAIRED PORTFOLIO1 (CZK m) +88m 3,469 (329)m 3,381 3,140 +62m 1,331 1,269 371 Stage 2 381 +588m 681 Stage 3 961 Stage 1 888 31 December 2017 1 January 20
Slide 26: 2018 Guidance
2018 GUIDANCE Improving 2018 guidance, targeting to deliver consolidated net profit of CZK 3.5 billion underpinned by low Cost of Risk METRICS INITIAL GUIDANCE1 REVISED GUIDANCE GROSS PERFORMING LOAN BOOK GROWTH ≥9% ≥9% TOTAL OPERATING INCOME (CZK) ≥9.5bn ≥9.5bn COST BASE (CZK) ~4.9bn ~4.9bn COST OF
Slide 27: KPI for 2018 Performance Year: Chief Executive Officer
KPI FOR 2018 PERFORMANCE YEAR Chief Executive Officer QUANTITATIVE TARGETS TOTAL WEIGHT 70% QUALITATIVE TARGETS TOTAL WEIGHT 30% Nr. Objective Weight Target Floor Nr. Objective Weight 01. Net income 25% ≥3.5 3.5 (CZK bn) 01. Digital strategy implementation 6% 02. Operating income 15% ≥9.7 9.5 (CZK b
Slide 28: KPI for 2018 Performance Year: Chief Financial Officer
KPI FOR 2018 PERFORMANCE YEAR Chief Financial Officer QUANTITATIVE TARGETS TOTAL WEIGHT 70% QUALITATIVE TARGETS TOTAL WEIGHT 30% Nr. Objective Weight Target Floor Nr. Objective Weight 01. Net income 25% ≥3.5 3.5 01. Develop Treasury income 5% (CZK bn) 02. Operating income 15% ≥9.7 9.5 02. Implement
Slide 29: KPI for 2018 Performance Year: Chief Risk Officer
KPI FOR 2018 PERFORMANCE YEAR Chief Risk Officer QUANTITATIVE TARGETS TOTAL WEIGHT 70% QUALITATIVE TARGETS TOTAL WEIGHT 30% Nr. Objective Weight Target Floor Nr. Objective Weight 01. Review and change organizational structure to 6% 01. Gain on NPL sale 20% ≥0.75 0.73 improve efficiency, reinforce ma
Slide 30: KPI for 2018 Performance Year: Chief Commercial Banking Officer
KPI FOR 2018 PERFORMANCE YEAR Chief Commercial Banking Officer QUANTITATIVE TARGETS TOTAL WEIGHT 70% QUALITATIVE TARGETS TOTAL WEIGHT 30% Nr. Objective Weight Target Floor Nr. Objective Weight 01. Net income 10% ≥3.5 3.5 01. RWA optimization & sales staff motivation 10% (CZK bn) 02. Revenue (Commerc
Slide 31: KPI for 2018 Performance Year: Chief Operating Officer
KPI FOR 2018 PERFORMANCE YEAR Chief Operating Officer QUANTITATIVE TARGETS TOTAL WEIGHT 70% QUALITATIVE TARGETS TOTAL WEIGHT 30% Nr. Objective Weight Target Floor Nr. Objective Weight 01. OPEX (COO Divisions) 20% ≤1.11 1.13 01. Delivery of agreed milestones of IT strategy 6% (CZK bn) 02. New Volume
Slide 32: Reporting Dates and Investor Meetings
REPORTING DATES AND INVESTOR MEETINGS Calendar for 2nd quarter 2018 2Q 2018 Earnings 8 August 2018 MONETA Roadshow WOOD‘s CEE Investor days European Financial Conference East Coast New York Frankfurt 22 and 25 May 2018 23 - 24 May 2018 7 – 8 June 2018 CalGEMs Global Emerging WOOD‘s Emerging Europe M
Slide 33: Investor Relations Contacts
INVESTOR RELATIONS Contacts Linda Kavanová Manda Drvotová MONETA Money Bank, a.s. BB Centrum, Vyskočilova 1422/1a 140 28 Praha 4 – Michle Jarmila Valentová Tel: +420 224 442 549 investors@moneta.cz www.moneta.cz Identification number: 25672720 Bloomberg: MONET CP ISIN: CZ0008040318 Reuters: MONET.PR
Slide 34: Appendix
Appendix Net Retail Loan Portfolio Development Net Commercial Loan Portfolio Development Consolidated Statement of Financial Position Consolidated Statement of Profit or Loss and Other Comprehensive Income Key Performance Ratios Glossary Forward Looking Statement Material Assumptions and Estimates f
Slide 35: Net Loan Portfolio Development
NET LOAN PORTFOLIO DEVELOPMENT Continuing balance increase in both segments, supported by strong growth in retail mortgages and small business lending NET RETAIL LOAN BALANCE (CZK bn) RETAIL +14.3% • 34.8% YoY growth in net mortgage balance 62.0 63.8 55.8 57.8 59.4 • 24.9% YoY growth in net auto len
Slide 36: Net Retail Loan Portfolio Development
NET RETAIL LOAN PORTFOLIO DEVELOPMENT Continuing strong growth in mortgages and other instalment lending products NET MORTGAGE BOOK DEMONSTRATING STRONG GROWTH (CZK bn) NET CONSUMER LOANS BALANCE SOLID GROWTH (CZK bn) +7.5% +34.8% 22.2 33.7 34.1 35.0 35.3 20.3 32.8 17.7 18.8 16.5 1Q 2Q 3Q 4Q 1Q 1Q 2
Slide 37: Net Commercial Loan Portfolio Development
NET COMMERCIAL LOAN PORTFOLIO DEVELOPMENT Robust growth performance NET INVESTMENT LOAN BALANCE (CZK bn) NET WORKING CAPITAL BALANCE (CZK bn) +15.1% +9.2% 9.9 9.5 9.3 8.6 9.0 33.5 33.7 34.6 34.5 31.6 1Q 2Q 3Q 4Q 1Q 1Q 2Q 3Q 4Q 1Q 2017 2018 2017 2018 NET AND LEASING FRANCHISE (CZK bn) NET SMALL BUSIN
Slide 38: Net Commercial Loan Portfolio Development
NET COMMERCIAL LOAN PORTFOLIO DEVELOPMENT Strong growth performance NET INVESTMENT LOAN BALANCE (CZK bn) NET WORKING CAPITAL BALANCE (CZK bn) Real estate Agroland & machinery Other investment lending +15.1% +9.2% 9.5 9.9 9.0 9.3 8.6 33.5 33.7 34.6 34.5 31.6 7.0 6.9 6.7 6.8 5.6 8.5 8.9 9.1 9.2 9.2 17
Slide 39: Consolidated Statement of Financial Position
CONSOLIDATED STATEMENT OF FINANCIAL POSITION CZK m 31/03/2018 31/12/2017 % Change Cash and balances with the central bank 6,823 7,127 (4.3%) Financial assets at fair value through profit or loss 0 48 (6.3%) Derivative financial instruments with positive value 45 0 Financial assets - available for sa
Slide 40: Consolidated Statement of Profit or Loss and Other Comprehensive Income
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME CZK m 1Q 2018 1Q 2017 % Change Interest and similar income 1,873 1,939 (3.4%) Interest expense and similar charges (77) (47) 63.8% Net interest income 1,796 1,892 (5.1%) Fee and commission income 519 534 (2.8%) Fee and commissio
Slide 41: Key Performance Ratios
KEY PERFORMANCE RATIOS 1Q 2018 FY 2017 Change in bps Profitability Yield (% Avg. Net Customer Loans) 5.7% 6.3% (60) 1 Cost of Funds (% Avg Deposits) 0.19% 0.15% 4 NIM (% Avg Int Earning Assets) 2 3.8% 4.3% (50) Cost of Risk (% Avg Net Customer Loans) (0.90)% 0.32% (122) Risk-adj. yield (% Avg Net Cu
Slide 42: Alternative Performance Measures
ALTERNATIVE PERFORMANCE MEASURES • In this presentation, certain financial data and measures are presented which are CZK m (unless otherwise indicated) 1Q 2018 FY 2017 not calculated pursuant to any accounting standard and which are therefore non- Reported Profit after tax (A) 1,173 3,923 IFRS measu
Slide 43: Glossary (1/3)
GLOSSARY (1/3) Adjusted RoTE (at 15.5% Adjusted return on tangible equity is based on a management target CoR or Cost of Risk or Net impairment of loans and receivables divided by average balance of net CAR) Capital Adequacy Ratio of 15.5% (consists of (a) 11% total SREP capital loans to customers,
Slide 44: Glossary (2/3)
GLOSSARY (2/3) FVTPL Financial assets measured at Fair Value Through Profit or Loss Net Interest Earning Cash and balances with the central bank, investment securities, loans and Assets receivables to banks, loans and receivables to customers and prior to FY Financial year transition to IFRS 9 also
Slide 45: Glossary (3/3)
GLOSSARY (3/3) RWA density Ratio of RWA to total assets Small business loan Loans and receivables of unsecured instalment loans, commercial credit cards balances and unsecured overdrafts provided to an enterprise with an annual turnover of up to CZK 60 million Small business (new) New volume of unse
Slide 46: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS Forward-looking statements • This presentation and subsequent discussion may contain projections, estimates, forecasts, targets, opinions, prospects, results, returns and forward-looking statements with respect to the medium term financial guidance, profitability, costs, a
Slide 47: Material Assumptions and Estimates for 2018 Guidance
MATERIAL ASSUMPTIONS AND ESTIMATES FOR 2018 GUIDANCE A number of economic, market, operational and regulatory assumptions were made by the Company in preparing its forward looking guidance1 • Positive macroeconomic outlook will persist in the medium term: • 3M PRIBOR assumed to gradually increase an
Slide 48: Disclaimer and Other Information
DISCLAIMER AND OTHER INFORMATION • THIS PRESENTATION IS NOT AN OFFER TO SELL OR A SOLICITATION OF OFFERS TO PURCHASE OR SUBSCRIBE FOR SHARES OF MONETA MONEY BANK, A.S. (THE “COMPANY”), OTHER SECURITIES OR OTHER FINANCIAL INSTRUMENTS. • Copies of this presentation may not be sent to countries, or dis
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