Slide 1: Results of BRE Bank Group Q2 2012
Results of BRE Bank Group Q2 2012 Another solid quarter Management Board of BRE Bank SA Presentation for Investors and Analysts August 2, 2012
Slide 2: Agenda
Agenda Summary of Q2/12 Analysis of Q2/12 Results Macroeconomic Update Update on strategy & 2012 Outlook Appendix Additional Information: Selected Financial Data Detailed Results of Business Lines 2
Slide 3: Highlights of Q2/12 at BRE Bank Group
Highlights of Q2/12 at BRE Bank Group Further growth of core income 1 NII and NFC at PLN 784 M, up 2.9% QoQ and 4.7% YoY Total income at PLN 921 M Solid efficiency maintained 2 C/I at 43.5% in H1/12 vs. 42.8% in Q1/12 and 47.9% in H1/11 Total costs down 2.8% YoY, total income up 4.2% YoY Sou
Slide 4: Summary of Results, Q2/12
Summary of Results, Q2/12 Key Financials Q2/12 Q1/12 Change Q2/Q1 Q2/11 BRE Analyzer Core income1) 784.0 761.6 +2.9% 748.9 Total income2) 921.2 916.3 +0.5% 884.2 Total cost (406.8) (392.1) +3.8% (418.6) Operating profit 514.4 524.2 -1.9% 465.7 before LLPs Loan Loss Provisions (109.0) (111.8) -2.5% (
Slide 5: Development of Loans to Clients
Summary of Q2/12 in BRE Bank Group Development of Loans to Clients Solid credit sales momentum maintained Development of Gross Loans (PLN M) BRE Analyzer +13.0% 4.1% QoQ YoY 70,240 70,436 66,807 67,687 3,271 3,661 62,340 2,751 3,386 2,774 -3.4% +17.9% 27,890 28,374 25,765 26,766 24,308 +6.0% +16.7%
Slide 6: Development of Deposits
Summary of Q2/12 in BRE Bank Group Development of Deposits Ample and improving liquidity with ‘real’ loan to deposit ratio at 87.3% Development of Deposits (PLN M) BRE Analyzer +12.4% +5.0% QoQ YoY 54,244 528 52,190 48,953 49,705 578 46,448 1,512 469 564 +23.3% +2.5% 27,015 22,600 21,259 20,989 21,8
Slide 7: BRE Bank funding structure details
BRE Bank funding structure details Key funding data A safe funding mix supporting business objectives Loan to Deposit ratio (%) Structure of funding (%) Subordinated Other 131.3% 131.6% 131.2% 130.1% liabilities 125.1% Short-term funding 4% 4% 4% 86.2% 86.3% 86.2% 87.7% 87.3% Medium & long- 28% Cust
Slide 8: Business Development: Corporates & Financial Markets
Summary of Q2/12 in BRE Bank Group Business Development: Corporates & Financial Markets Balanced growth of corporate loans and deposits Loans (PLN M) Deposits (PLN M) +16.7% +17.4% QoQ +6.0% +15.9% +6.3% 26,766 28,374 24,308 1,847 24,633 Excluding 1,538 20,989 21,259 4,044 4,115 3,036 insurance-link
Slide 9: Business Development: Retail Banking
Summary of Q2/12 in BRE Bank Group Business Development: Retail Banking Increasing client penetration and accelerating sales of non-mortgage loans Loans (PLN M) Deposits (PLN M) +10.0% +16.5% QoQ +3.3% +3.7% -3.6% 37,535 38,791 27,977 29,011 26,979 35,258 24,895 2,033 Excluding 7,995 8,246 7,467 9,2
Slide 10: Innovations supporting organic growth
Innovations supporting organic growth Product innovations Innovations adding value to retail and corporate banking offering Corporate banking Retail banking Instant transfers mSaver – innovative programme Express Elixir for regular saving Immediate, highly secured money transfers to Transfers sm
Slide 11: Further enhancing our reporting standards
Further enhancing our reporting standards BRE Analyzer An innovative and convenient tool to analyse BRE Bank Group’s financial and business data Analyse, customise, export and print selected data on BRE Bank Group, covering all periods since Q1/06 in quarterly and annual series Includes FX Compreh
Slide 12: Agenda
Agenda Summary of Q2/12 Analysis of Q2/12 Results Macroeconomic Update Update on strategy & 2012 Outlook Appendix Additional Information: Selected Financial Data Detailed Results of Business Lines 12
Slide 13: Income of BRE Bank Group
Analysis of Q2/12 Results Income of BRE Bank Group Recurrent revenues improving further BRE Analyzer BRE Bank Group Income (PLN M) QoQ YoY +4.2% +0.5% -24.7% -24.9% 923.5 916.3 921.2 884.2 27.2 891.3 20.0 41.0 30.8 40.9 41.4 16.0 20.5 93.5 76.5 97.7 83.3 +27.7% -/+ 94.2 12.4 2.6 0.0 0.0 2.7 219.3 20
Slide 14: Costs of BRE Bank Group
Analysis of Q2/12 Results Costs of BRE Bank Group Consistent focus on cost discipline BRE Analyzer Overhead Costs + Depreciation of BRE Bank Group (PLN M) QoQ YoY -2.8% +3.8% 427.5 435.5 418.6 18.3 22.4 406.8 -0.3% +3.6% 24.1 392.1 60.2 24.8 50.8 48.9 25.0 50.6 48.3 144.0 +4.7% -0.4% 142.6 150.5 129
Slide 15: Loan Portfolio Quality
Analysis of Q2/12 Results Loan Portfolio Quality Stable risk indicators, both in corporate and retail segment BRE Bank’s NPL Ratio Value of impaired loan portfolio of BRE Bank Group (%) (PLN M) 8.4% 8.4% 8.4% 8.6% +11.2% 8.2% +1.3% 3,554 3,445 3,287 3,402 3,099 198 5.0% 4.9% 4.9% 5.2% 5.1% 3,356 Q2/
Slide 16: Loan Loss Provisions
Analysis of Q2/12 Results Loan Loss Provisions LLP levels reflecting prudent risk management, low problematic sector exposures and solid retail client standing BRE Bank Group’s loan loss provisions (PLN M) 93* 71 67 65 54 QoQ YoY 140.4 -2.5% -22.4%* 78.6 111.2 111.8 109.0 89.5 51.6 53.6 49.3 -8.1% -
Slide 17: Loan Portfolio Structure
Analysis of Q2/12 Results Loan Portfolio Structure A well diversified loan portfolio BRE Bank Group’s Sector Exposure by Industry, as of June 30, 2012 (%) Households 20.4% Real estate management Public administration Construction industry 1.2% Liquid fuels and natural gas 1.4% 1.8% Transport and tra
Slide 18: Key Regulatory Ratios
Analysis of Q2/12 Results Key Regulatory Ratios CAR and Tier 1 at solid level, including increased risk weights on FX retail loans BRE Bank Group’s Capital Adequacy Ratio BRE Bank’s LCR and NSFR as of 06/12 16.9% 16.1% 15.8% 108% 15.0% 14.8% 103% 5.3% 5.4% 5.6% 5.4% 4.7% Basel 3 requirement ≥100% 10
Slide 19: Detailed Development of Core Tier 1 ratio and CAR
Analysis of Q2/12 Results Detailed Development of Core Tier 1 ratio and CAR BRE Bank Group’s Core Tier 1 Ratio (%) +1.76 +0.05 11.62 -0.38 -0.17 -0.92 +0.88 10.98 -0.05 10.10 +0.33 9.59 -0.11 Q4/11 Business FX impact 2011 net Other Q1/12 Business FX impact Higher FX ML Other Q2/12 H1/12 net Q2/12 de
Slide 20: Agenda
Agenda Summary of Q2/12 Analysis of Q2/12 Results Macroeconomic Update Update on strategy & 2012 Outlook Appendix Additional Information: Selected Financial Data Detailed Results of Business Lines 20
Slide 21: Macroeconomic Update (1/2)
Macroeconomic Update (1/2) Slowdown of the Polish economy on the horizon Contribution to GDP growth (% YoY) Consumption and expected changes in household financial situation (% YoY) 10 8 0 8 6,2 6,8 -5 6 5,1 6 3,9 4,3 -10 3,6 4 2,5 4 1,6 -15 2 2 -20 0 0 -25 -2 I II III IV I II III IV I II III IV I I
Slide 22: Macroeconomic Update (2/2)
Macroeconomic Update (2/2) Monetary aggregates reflecting slowdown in the real economy Corporate loans and deposits (% YoY) Household loans and deposits (% YoY) 40% 80% 30% 60% 20% 10% 40% 0% -10% 20% -20% Jan-08 Jun-08 Nov-08 Apr-09 Sep-09 Feb-10 Jul-10 Dec-10 May-11 Oct-11 Mar-12 0% Jan-08 Jun-08
Slide 23: Agenda
Agenda Summary of Q2/12 Analysis of Q2/12 Results Macroeconomic Update Update on strategy & 2012 Outlook Appendix Additional Information: Selected Financial Data Detailed Results of Business Lines 23
Slide 24: BRE Bank Group's 2012-2016 Strategy Summary
Vision Pillars BRE Bank Group’s 2012-2016 Strategy Summary Key concepts Targets Vision of BRE Bank Group One Bank for Customers and Employees Organic growth supported by cutting-edge technology, anchored on a healthy balance sheet structure, culture of cooperation between people, enhanced by one net
Slide 25: Highlights of BRE Bank Group's Strategy
Vision Pillars BRE Bank Group’s 2012-2016 Strategy Summary Key concepts Targets Highlights of BRE Bank Group’s Strategy Key initiatives of the Strategy Better use of Unification of infrastructure branding policy Outlets available for Higher recognition all client groups Effective marketing
Slide 26: One brand
Vision Pillars BRE Bank Group’s 2012-2016 Strategy Summary Key concepts Targets One brand The Bank will strengthen its market image under mBank brand Current situation Future benefits 3 main brands of BRE Bank Group: mBank, MultiBank, Growth Potential BRE Bank will take BRE Bank advantage of the
Slide 27: One Network
Vision Pillars BRE Bank Group’s 2012-2016 Strategy Summary Key concepts Targets One Network Integrated distribution network available to all clients Number of branches Current situation Future benefits PKO BP 1,198 Pekao SA 1,002 Limited access to the BZ WBK + KB 899 outlets for 3 M of mBank Wid
Slide 28: Financial Performance Targets
Vision Pillars BRE Bank Group’s 2012-2016 Strategy Summary Key concepts Targets Financial Performance Targets An efficient business platform supported by a strong balance sheet Loan to Deposit Assets Income Growth Cost/Income Ratio CAGR* CAGR Ratio 125 ≈115 6% 14% 48.3% <47.5% 3% ≈6% 2011 2016 2009-
Slide 29: 2012 Outlook – BRE Bank Group beyond Q2/12
2012 Outlook – BRE Bank Group beyond Q2/12 Core revenue growth and cost discipline as key drivers of 1 financial performance in a decelerating growth environment Business resilience despite uncertain market environment; 2 long-term performance dependant on broader European policy actions 3 Strong ca
Slide 30: Agenda
Agenda Summary of Q2/12 Analysis of Q2/12 Results Macroeconomic Update Update on strategy & 2012 Outlook Appendix Additional Information: Selected Financial Data Detailed Results of Business Lines 30
Slide 31: Appendix
Appendix Additional Information: Page No. Detailed Results of the Business Lines Page No. Selected Financial Data & Business Environment Consolidated Profit and Loss Account under IFRS 33 Retail Banking 45-49 BRE Bank Group’s Ratios 34 Summary of Q2/12: Financial Results 46 Consolidated Statement of
Slide 32: Appendix: Additional Information: Selected Financial Data
Appendix Additional Information: Selected Financial Data 32
Slide 33: Consolidated Profit and Loss Account under IFRS
Summary Appendix Historical outlook Subsidiaries Additional Information: Selected Financial Data Profit & Loss Balance Sheet Consolidated Profit and Loss Account under IFRS Business Lines PLN thou. Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 By quarter Net interest income 540,666 551,081 569,644 539,304 565,764 N
Slide 34: BRE Bank Group's Ratios
Summary Appendix Historical outlook Subsidiaries Additional Information: Selected Financial Data Profit & Loss Balance Sheet BRE Bank Group’s Ratios Business Lines Financial Ratios Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Net Interest Margin 2.5% 2.5% 2.5% 2.4% 2.4% Cost to Income Ratio 47.9% 47.3% 47.7% 42.8%
Slide 35: Consolidated Statement of Financial Position
Summary Appendix Historical outlook Subsidiaries Additional Information: Selected Financial Data Profit & Loss Balance Sheet Consolidated Statement of Financial Position Business Lines Assets (PLN thousand) Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Cash and balances with Central Bank 1 799 272 4 183 794 1 038 3
Slide 36: BRE Bank Group's historical performance (1/3)
Summary Appendix Historical outlook Subsidiaries BRE Bank Group’s historical performance (1/3) Profit & Loss Balance Sheet Business Lines Net interest income Net fee and commission income (PLN M) (PLN M) NIM 2.1 2.3 2.3 2.3 2.2 2.5 2.4 2.4 +15% +25% 840.0 745.9 2,167.9 594.7 -2% 1,658.2 1,811.0 +5%
Slide 37: BRE Bank Group's historical performance (2/3)
Summary Appendix Historical outlook Subsidiaries BRE Bank Group’s historical performance (2/3) Profit & Loss Balance Sheet Business Lines Operating costs Pre-provision income (PLN M) (PLN M) 63.7% 55.5% 55.1% 54.2% 51.8% 47.7% 42.8% 43.5% C/I ratio +10% +26% 1,617.3 1,680.3 1,550.1 1,544.8 1,279.6 +
Slide 38: BRE Bank Group's historical performance (3/3)
Summary Appendix Historical outlook Subsidiaries BRE Bank Group’s historical performance (3/3) Profit & Loss Balance Sheet Business Lines Total assets Equity and CAR (PLN B) (PLN M) 10.39% 10.16% 10.04% 11.50% 15.90% 14.96% 16.93% 14.84% CAR +3% +19% +4% +25% 98.9 92.6 95.0 82.6 90.0 8,824 81.0 8,07
Slide 39: Results of Subsidiaries
Summary Appendix Historical outlook Subsidiaries Additional Information: Selected Financial Data Profit & Loss Balance Sheet Results of Subsidiaries Business Lines Profit before Tax of Consolidated Subsidiaries (PLN M) Q2 2011 Q2 2012 27.3 17.2 14.7 14.7 11.1 9.7 4.0 3.9 3.8 3.7 3.9 4.2 4.3 4.7 3.0
Slide 40: Net Interest Income & Margin
Summary Appendix Historical outlook Subsidiaries Additional Information: Selected Financial Data Profit & Loss Balance Sheet Net Interest Income & Margin Business Lines Interest Income Structure Interest Expense Structure (PLN M) (PLN M) 1,093.4 539.9 1,070.2 1,079.2 527.7 38.1 42.1 43.7 4% 500.5 14
Slide 41: Fee and Commission Income
Summary Appendix Historical outlook Subsidiaries Additional Information: Selected Financial Data Profit & Loss Balance Sheet Fee and Commission Income Business Lines Commission Income Structure (PLN M) QoQ YoY 330.0 326.7 324.7 +13.7% +5.3% 315.7 320.6 41.2 39.5 38.0 40.3 43.3 14% +6.6% -13.9% 52.4
Slide 42: Trading Income
Summary Appendix Historical outlook Subsidiaries Additional Information: Selected Financial Data Profit & Loss Balance Sheet Trading Income Business Lines Share of Client Driven Transactions in Net Trading Income Net Trading Income Structure (%) (PLN M) 97.7 94.1 93.5 Q2/12 66.4% 13.0% 20.6% 6.1 10.
Slide 43: Balance Sheet Analysis: Assets & Liabilities
Summary Appendix Historical outlook Subsidiaries Additional Information: Selected Financial Data Profit & Loss Balance Sheet Balance Sheet Analysis: Assets & Liabilities Business Lines Structure of Assets Structure of Liabilities (PLN B) (PLN B) 98.9 98.9 94.4 3.5 95.0 94.4 95.0 92.6 7.5 92.6 88.7 4
Slide 44: Balance Sheet Analysis: Currency Structure
Summary Appendix Historical outlook Subsidiaries Additional Information: Selected Financial Data Profit & Loss Balance Sheet Balance Sheet Analysis: Currency Structure Business Lines Currency Structure of Loans (net) Currency Structure of Amounts due to banks and customers1) (PLN B) (PLN B) 67.9 67.
Slide 45: Detailed Results of the Business Lines Q2/12: Retail Banking
Summary Appendix Historical outlook Subsidiaries Profit & Loss Balance Sheet Business Lines Detailed Results of the Business Lines Q2/12 Retail Banking 45
Slide 46: Retail Banking Summary of Q2/12: Financial Results
Summary Appendix Historical outlook Subsidiaries BRE Bank Retail Banking Profit & Loss Balance Sheet Summary of Q2/12: Financial Results Business Lines Profit before Tax of Retail Banking Segment2) Number of Retail Outlets (by quarter, PLN M) 275 269 267 266 263 317.1 35 35 35 35 35 25 25 25 25 90.3
Slide 47: Sales of New Retail Loans
Summary Appendix Historical outlook Subsidiaries BRE Bank Retail Banking Profit & Loss Balance Sheet Sales of New Retail Loans Business Lines Quarterly Sales of Mortgage Loans Quarterly Sales of Non-Mortgage Loans (PLN M) (PLN M) +12.1% -34.3% +7.1% 865.9 +29.2% 627.5 639.3 568.6 593.9 114.4 20% 440
Slide 48: Mortgage Loans: Portfolio Structure and Quality
Summary Appendix Historical outlook Subsidiaries BRE Bank Retail Banking Profit & Loss Balance Sheet Mortgage Loans: Portfolio Structure and Quality Business Lines BRE Bank’s Mortgage Loan Portfolio Currency Structure of Retail Banking Mortgage Loan Portfolio (Retail Banking1) loans to individuals)
Slide 49: BRE Ubezpieczenia (BRE Insurance)
Summary Appendix Historical outlook Subsidiaries BRE Bank Retail Banking Profit & Loss Balance Sheet BRE Ubezpieczenia (BRE Insurance) Business Lines Bancassurance Retail Direct Insurance (Internet platform) Gross Written Premiums (PLN M) Gross Written Premiums (PLN M) +676% +13% 1,936.8 35.4 39.9 2
Slide 50: Detailed Results of the Business Lines Q2/12: Corporates & Financial Markets
Summary Appendix Historical outlook Subsidiaries Profit & Loss Balance Sheet Business Lines Detailed Results of the Business Lines Q2/12 Corporates & Financial Markets 50
Slide 51: Corporates and Financial Markets Summary of Q2/12
Summary Appendix Historical outlook Subsidiaries Corporates and Financial Markets Profit & Loss Balance Sheet Summary of Q2/12: Financial Results Business Lines Result before Tax of the Segment Corporate Branch Network (by quarter, PLN M) Offices Branches +86.7% -3.7% 46 47 48 48 48 19 19 19 19 20 1
Slide 52: Leasing and Factoring
Summary Appendix Historical outlook Subsidiaries Corporates and Institutions Profit & Loss Balance Sheet Leasing and Factoring Business Lines Profit before Tax (PLN M) Factoring contracts (PLN M) +1% +23% 1.3 0.9 883.9 Factoring Companies 836.7 4.3 4.7 1,744.2 Transfinance 1,308.0 BRE Faktoring Q2/1
Slide 53: Trading and Investment Activity: Market Shares
Summary Appendix Historical outlook Subsidiaries Trading and Investment Activity Profit & Loss Balance Sheet Market Shares Business Lines BRE Bank’s Market Share1) BRE Bank in the Market for Non-Treasury Debt2) in Investment Banking Services for Q2/12 (PLN M) 29,247 7.6% 21.9% 22,275 17,064 4,510 4,
Slide 54: BRE Bank Hipoteczny (BBH)
Summary Appendix Historical outlook Subsidiaries Trading and Investment Activity Profit & Loss Balance Sheet BRE Bank Hipoteczny (BBH) Business Lines Loan Portfolio (PLN M) Profit before Tax Balance-sheet Exposure (net value) (PLN M) 4,150 4,044 4,115 4,010 3,831 50 47 48 52 51 551 550 553 636 +5.5%
Slide 55: Dom Inwestycyjny BRE Banku (DI BRE)
Summary Appendix Historical outlook Subsidiaries Trading and Investment Activity Profit & Loss Balance Sheet Dom Inwestycyjny BRE Banku (DI BRE) Business Lines Number of Accounts with DI BRE Q2/12 (thou.) DI BRE accounts 52.8 DI BRE Equities Trading (PLN M) eBroker (mBank) 205.3 Brokerage Service (M
Slide 56: Contact details
Contact details BRE Bank’s Investor Relations at your service: Relacje.inwestorskie@brebank.pl Wojciech Chmielewski Direct dial: +48 22 829 14 34 Head of Investor Relations Fax: +48 22 829 15 19 E-mail: wojciech.chmielewski@brebank.pl Joanna Filipkowska Direct dial: +48 22 829 04 53 Deputy Head of I