Brd Groupe Societe Generale Sa (romania) · BVB:BRD
Brd Groupe Societe Generale Sa (romania) — BRD Groupe Société Générale — Q1 2019 Earnings Presentation
29 slides from Brd Groupe Societe Generale Sa (romania)'s earnings presentation, May 6, 2019
Slide 1: BRD Group Results 1st quarter 2019
BRD GROUP RESULTS 1st quarter 2019 | 06.05.2019
Slide 2: Disclaimer
DISCLAIMER The consolidated and separate financial position and income statement for the period ended March 31, 2019 were examined by the Board of Directors on May 2, 2019. The financial information presented for the period ended March 31, 2019 and comparative periods has been prepared according to
Slide 3: Introduction
1 INTRODUCTION BRD GROUPE SOCIETE GENERALE
Slide 4: Q1 2019: Net profit of RON 301 million
Q1 2019: NET PROFIT OF RON 301 MILLION Robust growth in revenues pushed by dynamic commercial momentum and double digit advance in net interest income NBI Strong increase of average outstanding of retail (+4.1% y/y) and RON 784m +8.3% vs Q1 2018 corporate loans (+8.3% y/y) Average outstanding deposi
Slide 5: Macroeconomic and Banking Environment
2 MACROECONOMIC AND BANKING ENVIRONMENT
Slide 6: Moderating economic growth
MODERATING ECONOMIC GROWTH GDP GROWTH Softer growth momentum 7.0% Romania’s GDP growth softened to +4.1% in 2018 from +7.0% in 2017, marking eight consecutive years of expansion Private spending was the main growth engine, backed by the 4.8% dynamic increase in wages, whereas gross fixed capital for
Slide 7: Loan market continued to be strong
LOAN MARKET CONTINUED TO BE STRONG ROMANIAN BANKING SYSTEM LOANS (RON bn) Y/Y* 263 264 +6.9% Consumers’ appetite for loans remained solid 245 Private individuals’ loans outstanding continued to expand at a 130 130 +5.2% 122 sustained pace (+8.6%* y/y at February 2019 end), on both housing and consum
Slide 8: Sound risk profile
SOUND RISK PROFILE ROMANIAN BANKING SYSTEM NPL RATIO 20.7% Further improving risk profile Declining trend in NPL ratio as a result of write off operations and sale of defaulted loans portfolios, as well as positive lending 13.6% dynamics 9.5% NPL ratio at 4.8% at February 2019 end, compared to 20.7%
Slide 9: 1st Quarter 2019 BRD Group Results
3 1ST QUARTER 2019 BRD GROUP RESULTS
Slide 10: Improving customer journey through investments in digitalization
IMPROVING CUSTOMER JOURNEY THROUGH INVESTMENTS IN DIGITALIZATION Further improvements to the mobile banking solution DIGITAL BANKING SOLUTIONS* ContAll, launched in November 2018, allows MyBRD Mobile 970 995 943 users to have, in a single place, a quick and comprehensive overview of their accounts
Slide 11: Expanding retail and corporate loan portfolios
EXPANDING RETAIL AND CORPORATE LOAN PORTFOLIOS Retail growth further driven by both consumer and mortgage lending Consumer loans up by +6.7%* versus March 2018 end Focus on higher mass market customers with safe risk profile BRD Finance production up by +9.0% y/y to RON 141 million NET LOANS in Q1-2
Slide 12: Large deposit base
LARGE DEPOSIT BASE DEPOSITS (outstanding amounts, RON bn) Y/Y* Retail savings continued to rise 44.3 45.2 44.3 -0.9% Retail deposits up by +4.0%* y/y due to higher inflows in 15.4 -9.6% 15.9 14.5 private individuals’ current accounts (+20%* y/y) Corporate deposits’ collection pragmatically adjusted
Slide 13: Positive business momentum
POSITIVE BUSINESS MOMENTUM Sustained increase in net banking income +8.3% y/y in Q1 2019, reflecting further business growth and supportive environment NET BANKING INCOME (RON m) Y/Y 784 +8.3% 724 Double digit increase of net interest income 86 +15.7% Other income 75 +10.3% in Q1 2019 vs. Q1 2018 18
Slide 14: Costs' evolution reflecting increased regulatory expenses
COSTS’ EVOLUTION REFLECTING INCREASED REGULATORY EXPENSES OPERATING EXPENSES (RON m) Operating expenses impacted by: Y/Y doubled cumulated contributions to Deposit 442 +14.9% Guarantee and Resolution Funds (RON 72m in 2019 385 vs. RON 35m in 2018) Contributions to 72 2.1x 35 FGDB & FR increased s
Slide 15: Improved asset quality
IMPROVED ASSET QUALITY GROSS LOANS – March 31, 2019 breakdown by segment and currency (RON bn) Loan portfolio market mix 69.7% on individuals market segment 30.3% on legal entities market segment 21.5 20.2 Consolidation of RON lending Share of RON denominated loans at 65.7% (vs 62.3% as of March 201
Slide 16: Negative cost of risk
NEGATIVE COST OF RISK COST OF RISK EVOLUTION (RON m) 509 2,083 Net cost of risk at -39 bps, driven by: 1,883 409 Significant net provision reversals, typical to upper part of the 309 1,193 1,193 economic cycle with low default rate and recoveries above 198 209 expectations, but at a lower level comp
Slide 17: Solid capital position
SOLID CAPITAL POSITION SOLVENCY RATIO Solid Tier 1 capital base CAR of 19.7% at March 2019 end, comfortably above regulatory requirement The evolution of RWA is mainly explained by +146bp +9bp +4bp -110bp -11bp regulatory phase-in of the risk weight on EUR sovereign exposures increase of fixed a
Slide 18: Conclusions
A CONCLUSIONS BRD GROUPE SOCIETE GENERALE
Slide 19: Conclusions
CONCLUSIONS Sustained increase in net banking income, pushed by dynamic business growth, in a supportive environment Further improvement of customers’ digital banking experience through enriched features of the mobile banking application Good control of the risk profile as reflected by lowered
Slide 20: Q&A Session
.) Q&A SESSION BRD GROUPE SOCIETE GENERALE
Slide 21: Appendix
APPENDIX TAX ON FINANCIAL ASSETS - SHORT OVERVIEW BRD GROUP – KEY FIGURES BRD - KEY FIGURES FOR BANK ONLY BRD - STOCK PRICE PERFORMANCE FINANCIAL CALENDAR FOR 2019 GLOSSARY – CLIENT SEGMENTATION
Slide 22: New tax on assets – mechanism
NEW TAX ON ASSETS – MECHANISM Financial assets with the following exclusions: Cash Interbank and Central Bank placements Bonds issued by public administrations (banking and trading book) TAX BASE Loans to public administrations or guaranteed by public administrations (mainly Prima casa)
Slide 23: New tax on assets – computation based on end of March data
NEW TAX ON ASSETS – COMPUTATION BASED ON END OF MARCH DATA, DISREGARDING POSSIBLE INCENTIVES RON m TAX BASE (A) 19,865 ANNUAL TAX RATE (B) 0.4% TAX (C =A x B) 79 Impact on net result 67 Disregarding possible incentives Tax Base computed on March 2019 figures Based on the current provisions of the OU
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 Q1-2019 Q1-2018 Change Net banking income 784 724 +8.3% Operating expenses (442) (385) +14.9% Gross operating income 342 339 +0.9% Reported financial re
Slide 25: BRD | Key figures for bank only
BRD | KEY FIGURES FOR BANK ONLY RON m Q1-2019 Q1-2018 Change Net banking income 744 680 +9.3% Financial results Operating expenses (421) (364) +15.8% Gross operating income 323 317 +2.0% Net cost of risk 30 150 -80.2% Net profit 289 392 -26.3% Cost/Income 56.6% 53.4% +3.1 pt ROE 15.4% 21.9% -6.4 pt
Slide 26: 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 27: 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 28: 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 29: 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 — Q1 2019 Earnings Presentation on 6ix