Brd Groupe Societe Generale Sa (romania) · BVB:BRD
Brd Groupe Societe Generale Sa (romania) — BRD - Groupe Société Générale — Q2 2017 Earnings Presentation
31 slides from Brd Groupe Societe Generale Sa (romania)'s earnings presentation, Aug 3, 2017
Slide 1: BRD Group Results 2nd Quarter and 1st Half 2017
BRD - GROUP R E S U LT S 2 ND Q U AR T E R AN D 1 ST H AL F 2 0 1 7 03 AUGUST 2017
Slide 2: Disclaimer
DISCLAIMER The consolidated and separate financial position and income statement for the period ended 30 June, 2017 were examined by the Board of Directors on August 1, 2017. The financial information presented for the period ended June 30, 2017 and comparative periods has been prepared according to
Slide 3: Introduction
INTRODUCTION BRD
Slide 4: H1 17: Doubled net profit on strong commercial activity and non recurring items
H1 17: DOUBLED NET PROFIT, ON STRONG COMMERCIAL ACTIVITY AND NON RECURRING POSITIVE COST OF RISK ITEMS Increased Group revenues from core businesses Core NBI* Strong commercial activity on both Retail and Non Retail segments Sustained pace of loan growth (+4.5% y/y) RON 1,340m +2.1% vs H1 2016 Stron
Slide 5: Q2 17: Very strong quarterly net result
Q2 17: VERY STRONG QUARTERLY NET RESULT NBI excluding non Steady core NBI growth recurring items (RON m) Core NBI* up +3.5% vs Q2 2016 Robust commercial dynamics across all customer segments +4.1% +3.5% 690 666 640 Retail loans up +6.0% y/y Trend reversal on Non retail loans Significant non recurrin
Slide 6: Macroeconomic & Banking Environment
2 MACROECONOMIC & BANKING ENVIRONMENT
Slide 7: Dynamic growth driven by domestic demand and procyclical fiscal policy
DYNAMIC GROWTH DRIVEN BY DOMESTIC DEMAND AND PROCYCLICAL FISCAL POLICY Strong GDP growth outlook for 2017 GDP GROWTH GDP growth of 4.8% in 2016, with a 4.5 pp contribution of private 4.8% consumption, which benefited from wage increases, VAT cuts, 3.9% 4.1% historically low inflation, and dynamic em
Slide 8: Loans to companies reaching a turning point, overall credit growth speeding up
LOANS TO COMPANIES REACHING A TURNING POINT, OVERALL CREDIT GROWTH SPEEDING UP LOANS (RON bn) yoy* Further dynamic growth of loans to households 231 233 240 +3.5% Sustained growth of housing loans (+10.1% y/y), with Prima Casa state program continuing to be a key factor of support 120 120 123 +2.0%
Slide 9: Continued improvement of the Romanian banking sector risk profile
CONTINUED IMPROVEMENT OF THE ROMANIAN BANKING SECTOR RISK PROFILE NPL RATIO Significantly reduced NPL ratio 20.7% NPL ratio at 8.3% at June 2017 end (vs 20.7% at Dec 14 end) Write-off of fully provisioned NPLs from the banks’ balance sheets and sale of NPL portfolios 13.6% 9.5% 8.3% 6.0% 5.8% 5.1% 4
Slide 10: 2nd Quarter and 1st Half 2017 BRD Group Results
3 2ND QUARTER AND 1ST HALF 2017 BRD GROUP RESULTS
Slide 11: Ongoing transformation of retail banking business model
ONGOING TRANSFORMATION OF RETAIL BANKING BUSINESS MODEL Increased autonomy on day-to-day banking transactions Enhanced digital offer c Stock of remote banking contracts up +27% YoY at Jun-17 end Fully online subscription to investment funds (MyBRD Net) (+17% internet and +59% mobile banking) and rea
Slide 12: Strong commercial momentum, accelerating migration to digital channels
STRONG COMMERCIAL MOMENTUM, ACCELERATING MIGRATION TO DIGITAL CHANNELS AVERAGE INDIVIDUAL CUSTOMER EQUIPMENT RATE Dynamic client acquisition 4.13 4.07 2.27m active clients 3.99 Stock of active clients increased by + 24,000 y/y More intense commercial relationships Jun-16 Dec-16 Jun-17 Average equipm
Slide 13: Solid growth in credit outstanding across all segments
SOLID GROWTH IN CREDIT OUTSTANDING ACROSS ALL SEGMENTS LOANS TO INDIVIDUALS PRODUCTION (RON m) Robust increase in loans to individuals’ production Q2-17 vs. H1-17 vs. Further advance of new consumer loans, driven by successful Q2-16 H1-16 commercial campaigns and rising private demand Housing loans’
Slide 14: Strong deposit inflows
STRONG DEPOSIT INFLOWS DEPOSITS (outstanding amounts, RON bn) yoy* ytd* Strong increase of deposit inflow on both segments 43.1 40.2 42.2 +6.8% +1.9% Retail +7.0% YoY vs June 2016 end 16.2 16.6 +6.5% +2.4% Non retail +6.5% YoY vs June 2016 end 15.5 24.7 26.0 26.5 +7.0% +1.7% Significant advance of d
Slide 15: Healthy increase in core net banking income
HEALTHY INCREASE IN CORE NET BANKING INCOME NET BANKING INCOME (RONm) excl. non incl. non Healthy increase in core NBI recurring * recurring NBI up +3.5% in Q2 2017 and +2.1% in H1 2017 after adjusting 787 Non recurring 691 +3.5% -12.1% for non recurring items (gains on sale of Visa share and other
Slide 16: Costs under control despite investments in transformation
COSTS UNDER CONTROL DESPITE INVESTMENTS IN TRANSFORMATION Q2 2017 operating expenses up +4.6% excluding Q2 2016 OPERATING EXPENSES (RON m) excl. non incl. non adjustment on contribution to FGDB recurring * recurring Other expenses up +7.9% 336 +4.6% +11.8% 301 Higher consulting expenses (mostly rela
Slide 17: Improved asset quality
IMPROVED ASSET QUALITY GROSS LOANS – June 30, 2017 Loan portfolio market mix breakdown by segment and currency (RON bn) 62% on individuals market segments 38% on legal entities market segments Consolidation of RON lending 19.5 18.8 Share of RON denominated loans at 59.7% (versus 54.1% as of 12.0 06/
Slide 18: Cost of risk strongly influenced by positive exceptional items
COST OF RISK STRONGLY INFLUENCED BY POSITIVE EXCEPTIONAL ITEMS COST OF RISK EVOLUTION (RON m) 1,883 2,083 Q2 2017 NCR highlights 2,500 400 Near 70 MRON in positive NCR impact from a non retail NPL portfolio 2,000 1,193 300 1,193 sale transaction 1,500 198 800 137 151 200 Strong level of recovery per
Slide 19: Significant increase in net profit
SIGNIFICANT INCREASE IN NET PROFIT ON STRONG COMMERCIAL ACTIVITY AND NON RECURRING POSITIVE COST OF RISK ITEMS NET PROFIT (RON m) Significant increase in net profit 420 +36.3% incl. non recurring items Q2 2017 net profit up +36.3% and +55.5% excluding non recurring items 308 131 Non-recurring H1 201
Slide 20: Solid capital position
SOLID CAPITAL POSITION SOLVENCY RATIO * +273bp +1bp Solid Tier 1 capital base -191bp -58bp CAR at 19.37% at June 17, comfortably above regulatory requirement 19.12% 19.37% Jun-16 Earnings Dividends RWA Other Jun-17 Bank only Jun-16 Jun-17 Capital adequacy ratio 19.12% 19.37% Own funds (RONm) 5,098 5
Slide 21: Conclusions
CONCLUSIONS BRD
Slide 22: Conclusions
CONCLUSIONS Ongoing transformation of retail banking business model Strong commercial momentum, accelerating migration to digital channels Solid growth in credit outstanding across all segments Healthy increase in core net banking income Costs under control despite investments in transform
Slide 23: Q&A Session
Q&A SESSION BRD
Slide 24: Appendix
APPENDIX BRD
Slide 25: BRD Group | Key Figures
BRD GROUP | KEY FIGURES RON m Q2-2017 Q2-2016 Change H1-2017 H1-2016 Change Net banking income 691 787 -12.1% 1,342 1,434 -6.4% Operating expenses (336) (301) +11.8% (720) (705) +2.1% Reported financial Gross operating income 355 486 -26.9% 621 728 -14.7% results Net cost of risk 146 (131) n/a 270 (
Slide 26: BRD Group | Key Figures
BRD GROUP | KEY FIGURES Loans and deposits RON bn Jun-16 Dec-16 Jun-17 vs. Jun-16 vs. Dec-16 (1) 28.4 28.5 29.8 +4.5% +4.3% Net loans including leasing (RON bn) Retail 18.8 19.3 20.0 +6.0% +3.3% Non retail 9.6 9.2 9.8 +1.6% +6.5% (1) 40.2 42.2 43.1 +6.8% +1.9% Total deposits (RON bn) Retail 24.7 26.
Slide 27: BRD | Key Figures for Bank Only
BRD | KEY FIGURES FOR BANK ONLY RON m Q2-2017 Q2-2016 Change H1-2017 H1-2016 Change Net banking income 692 771 -10.2% 1,293 1,381 -6.4% Financial results Operating expenses (316) (281) 12.3% (681) (667) +2.1% Gross operating income 377 490 -23.1% 612 714 -14.3% Net cost of risk 145 (126) n.a 274 (27
Slide 28: BRD | Stock Price Performance
BRD | STOCK PRICE PERFORMANCE Market capitalisation 13.0 4,000 EUR 2.1bn 12.0 3,500 3,000 11.0 2,500 10.0 2,000 9.0 1,500 8.0 1,000 7.0 500 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 com
Slide 29: Financial Calendar for 2017
FINANCIAL CALENDAR FOR 2017 9th February: Preliminary 2016 financial results and annual press conference 20th April: General Shareholders Meeting 20th April: Publication of the 2016 Board of Directors Report 4th May: Q1-2017 results publication 2nd August: H1-2017 results publication 3rd
Slide 30: 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 31: BRD Groupe Societe Generale - Investor Relations
BRD GROUPE SOCIETE GENERALE - INVESTOR RELATIONS +4 021 380 47 62 investor@brd.ro www.brd.ro
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