Bank Millennium Sa · GPW:MIL
Bank Millennium Sa — Investor Presentation (June 2022)
36 slides from Bank Millennium Sa's investor presentation, June 2022
Slide 1: Bank Millennium Group Institutional Presentation
BANK MILLENNIUM GROUP INSTITUTIONAL PRESENTATION June 2022 1
Slide 2: Agenda
AGENDA 1. 2. 3. 4. Macroeconomic Banking sector Bank Millennium Financial environment in Poland general overview performance in Poland and strategy 2
Slide 3: Macroeconomic environment in Poland
01 BANK’S PRESENTATION Macroeconomic environment in Poland 3
Slide 4: Macroeconomic Overview: Economy
MACROECONOMIC OVERVIEW Economy Due to rebuilding inventories and consumption CPI inflation and wage growth (% y/y) PMI indicators (pts) bolstered by demand related to the inflow of refugees GDP in Poland increased in 1Q 22 by a very strong 8.5% y/y, despite high inflation. The outlook for the growth
Slide 5: Macroeconomic Overview: Economy
MACROECONOMIC OVERVIEW Economy Exports and import according to national accounts (sa, % q/q) Current and capital account balance (% GDP) General government result* (% GDP) Public debt* (% GDP) Source: Macrobond, Bank Millennium, * F- forecast by the European Commission 5
Slide 6: Macroeconomic Overview: Financial markets
MACROECONOMIC OVERVIEW Financial markets EUR/PLN and CHF/PLN exchange rates WIBOR 3M and market expectations (%) Due to mounting inflation the Monetary Policy Council continued monetary policy tightening in an aggressive pace. The MPC hiked the reference rate to 6.00% in June 2022, the highest level
Slide 7: Macroeconomic Overview: Monetary aggregates
MACROECONOMIC OVERVIEW Monetary aggregates Loans to households Mortgage loans Loans to corporates At the end of Mar’22 the value (PLN bn, % y/y) (PLN bn, % y/y) (PLN bn, % y/y) of loans to households was only slightly lower than in Dec’21 as a decrease in consumer loans was mitigated by a further in
Slide 8: Banking sector in Poland
02 INSTITUTIONAL PRESENTATION Banking sector in Poland 8
Slide 9: Polish Banking Sector Overview
POLISH BANKING SECTOR OVERVIEW (*) 30 fully registered banks, 502 co- Strong resilience during the pandemic crisis – operative banks (active mainly in rural only one bank was subject to resolution areas of the country) and additional 36 procedure (due to pre-pandemic issue), fall- international bank
Slide 10: BM is Poland's #7 Bank by Assets
BM IS POLAND’S #7 BANK BY ASSETS As at 31 March 2022 (PLN bn) Loans and advances to clients 450 421,6 Debt securities 420 390 35 Other financial assets 360 330 Other assets 300 133,5 271,9 270 245,9 240 38 210,1 22 204,9 210 180 59,3 66,1 8 28 37,3 138,0 150 47,0 120 236,7 13 109,8 31,9 10 84,6 90 1
Slide 11: Recent M&A Transactions in the Polish Banking Sector
RECENT M&A TRANSACTIONS IN THE POLISH BANKING SECTOR Upper logo: Acquirer 1) Lower logo: Acquired entity 1) 2) 2) 2007 2009 2011 2012 2013 2014 2015 2015 2017 2018 2019 2020 1) 1) (*) 1) 2) 2) 2) 3) 3) (*) Most of assets/liabilities of Idea Bank acquired as a part of resolution process at the turn o
Slide 12: Bank Millennium general overview and strategy
03 INSTITUTIONAL PRESENTATION Bank Millennium general overview and strategy 12
Slide 13: History of Bank Millennium at a Glance
HISTORY OF BANK MILLENNIUM AT A GLANCE 1989 1992 1997 1998 2003 2006 2010 2015 Bank Inicjatyw BIG S.A. is the first Merger with Bank Joint venture with BIG Bank GDAŃSKI Change of the Bank's Successful capital Increase of a Gospodarczych BIG bank listed on the Gdański (a regional Portuguese BCP to re
Slide 14: Overview of Strategies from 'Before Covid'
OVERVIEW OF STRATEGIES FROM ’BEFORE COVID’ 2018-2020: “Accelerated growth” 2015-2017: • Complementing current growth “Focus on profitability engine in Retail (C/A preservation, while keeping acquisition) with new engines organic growth target” (cash Loan, investments and micro business) 2012-2014: “
Slide 15: 2021 – A Transition Year Before New Strategy Roll-out
2021 – A TRANSITION YEAR BEFORE NEW STRATEGY ROLL-OUT Quick recovery of Focus on Full business operational digitalisation results efficiency • Improvement of business results • New operational efficiency • Extending digital customer base through better pricing and sales program: Processes Re- beyond
Slide 16: 2022-24 Strategy: Inspired by People
2022-24 STRATEGY: INSPIRED BY PEOPLE For years clients have been at the center Pillars of ’Millennium 24’ strategy: of our thinking. We talk, listen, understand and co-create our solutions together. Now, we are to leverage this approach in even more intensive way … 01 02 03 Top quality and Bank of t
Slide 17: Strategy 2024 Ambitions in Brief
STRATEGY 2024 AMBITIONS IN BRIEF Profitable growth, doubling Bank Millennium’s recurrent profit while driving scale, strong customer recognition Ambitions by 2024: We plan to continue to We also aspire to … driven by keeping … and to continue … and to boost … significantly increase number of further
Slide 18: Mortgages – Our Long-term Customer Acquisition Product
MORTGAGES – OUR LONG-TERM CUSTOMER ACQUISITION PRODUCT Millennium Mortgage Bank (MBH) started operating performance on June 14, 2021. MBH intends to issue its first covered bonds in early 2022. Rationale for establishing MBH Share of mortgage loans in total portfolio (top 9 banks) (%) 80% 4Q20 4Q21
Slide 19: Bank Millennium Today
BANK MILLENNIUM TODAY 2.7 million (*) active retail clients, 6% average market share, of which 7-8% 2.4 million (*) online active clients in retail segment and 4% in corporate 2.0 million (*) mobile active clients business Well developed retail banking Profitability under pressure platform with 646
Slide 20: Market Shares in Main Products
MARKET SHARES IN MAIN PRODUCTS 2018 2020 2021 April 2022 2018 2020 2021 April 2022 Total loans 4.6% 6.1% 6.1% 6.0% Total deposits 5.3% 5.3% 5.5% 5.8% Loans to individuals 5.6% 8.0% 8.2% 8.2% Deposits of individuals 6.2% 6.7% 6.8% 6.7% mortgage 7.0% 8.6% 8.7% 8.7% demand deposits (**) 6.9% 7.2% 7.0%
Slide 21: Leaders in Digital Innovation and Best Class Service Quality
WE ARE LEADERS IN DIGITAL INNOVATION AND OFFER BEST CLASS QUALITY OF SERVICE TO OUR CUSTOMERS Human focused approach … and adding value to customer experience in digital and innovations drive high loyalty and recommendation (NPS1). based on: These led to our recognition as the innovation and quality
Slide 22: Solid Track Record of Delivering
SOLID TRACK RECORD OF DELIVERING Our top customers growth engine was fuelled by leading position in quality and … now complemented by competences in digital services … development of loan offer 1. In 2017 edition Bank was ranked in following categories: „Mobile Banking" – 1st place and ’Internet Ban
Slide 23: Bank Millennium Branches
BANK MILLENNIUM BRANCHES (as at 31 December 2021) Network of 646 branches Branches -32 799 766 726 702 678 676 665 655 646 226 224 224 225 225 224 222 215 218 573 542 502 477 453 452 443 440 428 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 Own Partners' outlets Employees -396 8 412 8 141 7 846 7 630
Slide 24: Relations with BCP and BM's Management Composition
RELATIONS WITH BCP AND BM’s MANAGEMENT COMPOSITION Sale of 15.4% through ABB in BCP's stake - evolution since 1998 March’15 2015-2021 50,1% ▪ BCP demonstrated in the past strong support to 2010 BCP subscribed PLN691m during the right issue 65,5% Bank Millennium in Poland; commitment in equity was sh
Slide 25: Solid Foundations Appreciated by Investors
SOLID FOUNDATIONS APPRECIATED BY INVESTORS Bank Millennium's shareholder structure (31.12.2021) Bank Millennium share performance vs. WIG Bank index 30,0% Stable shareholder 50,1% 5,7% 6,0% BCP 8,2% Nationale-Nederlanden Pension Fund Participation in domestic stock market indices Aviva Pension Fund
Slide 26: ESG: Environment
ESG: ENVIRONMENT Sustainability has long been included in our business strategy. Now we plan to become climate neutral Our advanced capabilities in the … will support our leading position on the ESG & Sustainability development … climate neutrality path Strong own emissions’ Reduction of … and striv
Slide 27: ESG: Social
ESG: SOCIAL Banking in Millennium – responsible and without barriers Our strong position has been ... and our aspiration is continue to achieve ambitious goals recognised on the market … in the coming years Best Bank for CSR Customers In CEE 2017 Customer centric service focused on superb quality, f
Slide 28: ESG: Governance
ESG: GOVERNANCE Highest quality and standards Our strong position has been ... and our aspiration is continue to achieve ambitious goals recognised on the market … in the coming years +10 years of membership Ethical approach to business Regularly revised Code of Ethics and compliance assessment Sign
Slide 29: Financial performance
04 INSTITUTIONAL PRESENTATION Financial performance 29
Slide 30: Synthetic P&L Account
SYNTHETIC P&L ACCOUNT SYNTHETIC P&L ACCOUNT 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 1
Slide 31: 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 32: 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 33: 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 33
Slide 34: 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 35: Most Important Awards and Achievements of Bank Millennium 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 and competitions Bank employees distinguished in the A team of Bank Millennium economists Bank Millenniu
Slide 36: 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