BAWAG Group AG · VIE:BG
BAWAG — Shareholder Meeting (April 2019)
24 slides from BAWAG's shareholder meeting presentation, Apr 30, 2019
Slide 1: BAWAG Group Annual General Meeting 2019
BAWAG Group Annual General Meeting 2019 30 April 2019 1
Slide 2: Managing Board of BAWAG Group
Managing Board of BAWAG Group Anas Abuzaakouk David O’Leary Chairman of the Managing Board Member of the Managing Board Chief Executive Officer Head of BAWAG P.S.K. Retail Enver Sirucic Sat Shah Member of the Managing Board Member of the Managing Board Chief Financial Officer CEO of easygroup Stefan
Slide 3: Highlights 2018
Highlights 2018 Record profit before tax of €573m in 2018, up 14% vPY … exceeded all 2018 Targets Executing on our Strategy … Concept 21 retail transformation, Retail Partnerships and 3 bolt-on acquisitions Revised Targets Upward for 2019-2020 based on strong operating performance … moved original P
Slide 4: Share price development
Share price development Indexed as of 1 Jan 2019 130 Since IPO BAWAG Group (10%) 125 Stoxx 600 Banks (21%) Euro Stoxx Banks (27%) +21% 120 115 +15% +12% 110 105 100 95 1/1/2019 2/1/2019 3/1/2019 4/1/2019 Stoxx 600 Banks Index Euro Stoxx Banks Index BAWAG Group Development based on the daily closing
Slide 5: Financial performance
Financial performance Delivered record profit before tax and outperformed all 2018 targets € millions FY ’18 vPY FY ’18 Target Core revenues 1,123 +11% €573m >5% Profit before tax (>10%) growth ✓ Operating income 1,171 +4% Operating expenses (518) (2%) Cost-income ratio 44.2% <46% ✓ Risk costs (45)
Slide 6: BAWAG Group compared to other banks
BAWAG Group compared to other banks Remained one of the most efficient and profitable banks in Europe Return on equity (@12% CET1) Cost-income ratio 14.3% 15.1% 11.3% 70% 62% 66% 62% 6.2% 4.2% 44% 47% 0.4% BAWAG P.S.K. Austrian Peers German Peers Nordic Peers ECB Peers EU Peers BAWAG P.S.K. Austrian
Slide 7: Focus on shareholder value
Focus on shareholder value Highly capital accretive business model FY ’18 capital generation: 2.6% 15.6% ~260bps gross, ~210bps net 14.5% (0.5%) 13.5% (1.1%) €215m dividend will be Share & Tier2 buyback completed in 2018 €215m proposed dividend proposed to AGM Earnings & RWA in line with dividend po
Slide 8: Updated targets
Updated targets Financial targets revised upwards Original target Updated targets Metrics 2018-2020 2019 2020 CAGR >5% CAGR >6% >6% Profit before tax >€600m >€600m >€640m absolute Cost-income ratio <40% <43% <40% Return on 15% to 20% 15% to 20% Tangible Equity (@12% CET1) CET1 ratio (FL)1) ≥12% 12%
Slide 9: Strategy
Strategy 4 pillars of our strategy Growing in our Drive efficiency thru core markets operational excellence Targets: RoTE >15% PBT >6% CAGR thru 2020 CIR <40% by 2020 CET1 target 12% to 13% Making our Maintaining a safe and customers’ lives easier secure risk profile 30 April 2019 | BAWAG Group AG 9
Slide 10: Sound macroeconomic dynamics
Sound macroeconomic dynamics Supportive lending environment in DACH region with >100m population DACH Austria Germany GDP development 4.0 GDP Euro area DACH Austria yoy growth 1.8% 2.7% 1.5% 3.5 GDP-growth in % yoy 3.0 forecast 2.5 2.0 Unemployment 3.8% 5.2% 3.5% 1.5 rate 1.0 0.5 0.0 Government debt
Slide 11: Concept 21 … retail transformation
Concept 21 … retail transformation 2018 progress on key strategic initiatives Branch transformation Opportunity: Right-sized branch network Opportunity: Right-sized branch network 74 High-performing bank branches in-place ✓ Enhanced customer experience ✓ Eliminate inefficient network ✓ Digitally int
Slide 12: Strategic partnerships
Strategic partnerships 2018 progress on key strategic initiatives #1 electronics retailer in Austria MediaMarktSaturn • ~30% market share, millions of customers Austria • 345k+ products • Significant new customer growth through POS financing in core product category jö New Metro Cash #1 SME wholesal
Slide 13: BAWAG Group in Germany
BAWAG Group in Germany Overview business franchise Retail, Private Banking, SME & Corporates 2) 3) Online consumer loan platform Dental factoring & healthcare hosted via SWB financial services 2) Austrian credit card platform German technology & with German capabilities equipment leasing franchise 1
Slide 14: Proven M&A track record
Proven M&A track record Experienced with bolt-on acquisitions to build out customer franchise Signed • We believe consolidation will occur across the European €0.1b assets, Q4 ’18 €1b factoring banking landscape at varying speeds new volume Closed 3k customers • Primary focus on DACH region and sele
Slide 15: Major P&L & balance sheet items
Major P&L & balance sheet items Profit before tax €573m +14% Total assets €45b (3%) Customer Core revenues €1,123m +11% loans €30b (1%) Customer Common equity €3.7b +4% deposits €30b (2%) 30 April 2019 | BAWAG Group AG 15
Slide 16: Customer segment performance
Customer segment performance Profit before tax (in € million) Retail & SME business Corporate & Public Sector business DACH Corporates BAWAG P.S.K. Retail easygroup Südwestbank International Business & Public Sector 145 243 137 +6% 194 +25% 50 123 46 84 +47% 43 +7% n/a 2017 2018 2017 2018 2017 2018
Slide 17: P&L details – core revenues
P&L details – core revenues Core revenues Highlights € millions NII NCI NIM • Net interest income (NII) up 6% vPY 2.24% 2.21% ‒ Solid performance across retail segments 1,123 ‒ Strong performance of International Business with net 1,010 asset growth of 21% vPY 283 ‒ International mortgage portfolio
Slide 18: P&L details – operating expenses
P&L details – operating expenses Operating expenses Highlights € millions OPEX Cost-income ratio • Operating expenses decreased by 2% to €518m 47.2% 44.2% • Continued focus on operating efficiency … digitizing processes and integrating new acquisitions 529 518 • FY ‘18 CIR at 44.2% well below target
Slide 19: P&L details – risk costs
P&L details – risk costs Risk costs Highlights € millions Risk costs Risk costs / Interest-bearing assets • Risk cost ratio at 12bps … ongoing benign credit 0.17% environment and our focus on developed markets with 0.12% customer loan franchise ~72% DACH region and ~28% 62 Western Europe & United St
Slide 20: Strong capital base
Strong capital base CET1 capital (FL) Highlights € billions CET1 capital (FL) CET1 ratio (FL) • Very strong capital levels, with … 14.5% 13.5% ‒ CET1 ratio (FL) significantly above target ‒ CET1 ratio post two major acquisitions in 2017 2.9 3.0 (Südwestbank and PayLife) and the acquisition of Deutsc
Slide 21: Capital management
Capital management RWA development Organic capital Future capital 2018: 5% decline generation generation drivers Future: modest organic growth while targeting density of low 40s M&A 2017: +2.2% • RoTE 15% to 20% 2018: 3 acquisitions Future: strict underwriting 2018: +2.6% • RWA density reduction Ave
Slide 22: P&L & balance sheet overview
P&L & balance sheet overview P&L | € millions 2017 2018 vPY Balance sheet | € billions 2017 2018 vPY Net interest income 793.1 840.5 6% Customer loans 30.8 30.5 (1%) Securities and bonds 8.4 6.9 (18%) Net commission income 216.9 282.8 30% Credit institutions and cash 4.8 5.4 12% Core revenues 1,010.
Slide 23: BAWAG Group at a glance
BAWAG Group at a glance • One of Austria‘s leading retail banks … more than 2.5m > 2.5m customers & solid market shares • Focused on developed countries with ~72% of customer loans 72% customers ~ €45b customer loans in DACH region & ~28% in Western Europe & USA total assets in Austria & • Organic &
Slide 24: Important Disclaimer
IMPORTANT DISCLAIMER: This presentation is prepared solely for the purpose of providing general information about BAWAG Group, Wiedner Gürtel 11, 1100 Wien. The information does not constitute investment or other advice or any solicitation to participate in investment business. This presentation doe