Patria Bank Sa · BVB:PBK
Patria Bank Sa — Investor Presentation (April 2019)
24 slides from Patria Bank Sa's investor presentation, Apr 4, 2019
Slide 1: Breakeven: achieved. What's next? Investors' Presentation
Breakeven: achieved. What’s next? Investors’ Presentation April 4th, 2019 1
Slide 2: Plan for 2019-2021: increasing profitability through more efficient operations
After achieving breakeven, the plan for 2019-2021 is to generate increasing levels of profitability through more efficient operations • Commercially and financially ambitious, after a 2017 in which we recorded a EUR 9.3 million net loss • Objectives achieved to a high degree by the management team:
Slide 3: PBK Overview
1. PBK Overview 3
Slide 4: Patria Group: Patria Bank, Patria Asset Management and Patria Credit
Patria Group is currently comprised of Patria Bank, Patria Asset Management and Patria Credit, serving over 217 000 customers • EUR 740 million in total assets • Asset Manager with 3 investment funds • Microfinance NBFI specialized in small under management, i.e.: agro-producers and small rural busi
Slide 5: Following breakeven in 2018, medium term efforts focus on profitability
Following a breakeven result in 2018, Patria’s medium term efforts shall focus on profitability by reaching the KPIs of a healthy balance sheet Accelerating lending growth [EUR M] Achieved break-even in 2018 [EUR 000] 237.0 244.9 210.2 221.0 150.7 111.0 86.7 On its way to increasing profitability [E
Slide 6: 2018 results
2. 2018 results 6
Slide 7: Romania has highest financial services market potential, low penetration
Romania still has the highest financial services market potential, given the low penetration of lending and savings products Non-governmental lending as share of GDP and annual evolution TARGETED SEGMENTS 37.77 39.15 39.20 39.47 37.93 33.66 34.27 31.60 30.57 29.15 28.40 28.04 27.82 4.71 6.57 5.34 6.
Slide 8: New loans growth by CAGR of 35% since 2015
PBK recorded1 a growth of the new loans by CAGR of 35% since 2015, fulfilling the budgeted expectations for ‘18 Loans sold per year [EUR M] 2018 sales of new loans, breakdown by line of business Retail 18% 210.2 SME & Corporate 39% 150.7 111.0 Micro 23% 86.7 Agro 20% 2015 2016 2017 2018 Total loans
Slide 9: PBK punches above its weight in sales of loans
PBK punches1 above its weight in sales of loans, exceeding its market share by assets considerably, while loans outstanding grow considerably PBK Market share: sales of loans per quarter/ total new issued loans • Despite a market share by loans 2.14% outstanding of 0.6%, Patria Bank 1.99% manages to
Slide 10: Breakeven reached in 2018 after EUR 9.3 million loss in 2017
Following the1 EUR 9.3 million loss in 2017, the key objective for 2018 has been to reach the breakeven point, which was fulfilled EUR 000 NBI OPEX CoR PBT • In spite of a very ambitious plan, Patria Bank has managed to deliver 2018 Actuals a breakeven result, also helped by non-recurring items repo
Slide 11: Steady growth of net banking income, reaching breakeven
PBK maintained 1 a steady growth for net banking income and operated in an increasingly effective manner, ending 2018 by reaching breakeven Quarterly P&L [EUR 000] Operating result and PBT, quarterly [EUR 000] 4,404 1,059 693 587 74 (1,018) (2,095) (4,138) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Operating result PB
Slide 12: Cost optimizations behind operational performance
A significant driver 1 behind the operational performance of the bank lies with the cost optimizations that have taken place in the past years OPEX evolution and cost optimization efforts [EUR M] EUR 12m in cost optimizations achieved in the past 2 years • Following the acquisition of BCC, Patria Ba
Slide 13: Improved balance sheet structure in 2018
2018 has meant 1 a significantly improved balance sheet structure via a reduction of excess liquidity and growth of the loans portfolio 815,220 740,466 • The Net loans balance target has been partially 377,422 achieved, also mainly due to various dynamics of the 328,925 clients portfolio, which over
Slide 14: L/D ratio improved by 9 percentage points
L/D ratio has1improved by 9 percentage points compared to Dec. 2017, reaching 55%, while the loans portfolio has increased by 15% Total assets comparison on a relative basis [%] Total assets comparison on an absolute basis [EUR 000] 771,468 740,466 • - 8 pps 401,744 328,925 • -20% in absolute 45% 53
Slide 15: Liabilities side stable with high share of retail deposits
On the liabilities 1 side, the balance sheet remains stable, with Patria Bank maintaining a high share of deposits from retail customers Total liabilities Y/Y comparison on a relative basis [%] Total liabilities Y/Y comparison on an absolute basis [EUR 000] 4% 2% 771,468 740,466 22,955 15,221 89% 89
Slide 16: Legacy portfolio clean-up and value from repossessed assets and NPLs
The legacy portfolio 1 of PBK is undergoing a clean-up, while extra value is to be extracted from fixed repossessed assets and the NPL portfolio Projected evolution of NPE and coverage Planned reduction in fixed assets by year [EUR 000] 66% 65% 65% 65% 12,469 55.0% 55.0% 10,427 50.0% 44.0% 2,021 15.
Slide 17: 2019 and onward
3. 2019 and onward The following 2019, 2020 and 2021 figures do not account for the impact of the Tax on NOTE Assets. Our current estimate is that the bottom line impact should reside in a range between EUR 0.6 and EUR 1.6 million for 2019 17
Slide 18: Efficiency KPIs in line with market expected from Q3/Q4 2019
Despite the uncertainty 1 in the local market, we expect for PBK to reach efficiency KPIs in line with the market as of Q3/Q4 2019 • We are witnessing and expecting an increased volatility of the regulatory environment in the short and medium term 1. • Therefore, all financial projections do not tak
Slide 19: Distribution model: branches and specialized salesforce
Patria’s distribution 1 model relies on a mix between brick and mortar branches and specialized salesforce leveraged through technology BRICK AND MORTAR • 46 branches by the end of the year, efficiently distributed throughout the country • Targeting mostly retail SPECIALIZED SALESFORCE • Specialized
Slide 20: Technology essential: new Internet Banking platform in 2019
Technology is essential for PBK’s business model, as 2019 marks the year we launch a new Internet Banking platform • New platform for Internet Banking is currently under development, with rollout planned for 2019 for both Retail & Corporate Customers • New Mobile Banking in 2019 • Technology is esse
Slide 21: Sales of new loans to remain high, growth in Micro, SME, Agro
While sales of1 new loans are expected to remain high, we see PBK continuing to grow especially in Micro, SME and Agro New loans sold by Patria Bank [EUR 000] • We expect generation of new loans to Loans 7.27% remain strong in the immediate future, 7.02% 7.35% 7.36% Yield albeit at a smaller net int
Slide 22: Expected increasing profitability from 2019 to 2021
Following 2018’s 1 result, we expect for PBK to reach increasing levels of profitability on the back of increasing NBI and more efficient operations PBK budget and business plan for 2019-2021 [EUR M] C/I ratio 101% 85% 69% 66% 2018 Actuals 2019 Budget 2020 Business Plan 2021 Business Plan NBI OPEX C
Slide 23: Balance sheet expected to reach equilibrium level
At the same time, we expect the balance sheet to reach an equilibrium level, with the L/D ratio gaining 19 percentage points in 2019 alone PBK balance sheet evolution 2019-2021 [EUR M] • We expect a further balancing process on the asset side to take place in 2019, reducing the share of liquid asset
Slide 24: Experienced management and board executives
PBK boasts some of the most experienced management and board executives in the local market 11 11 9 2 2 Horia Manda Daniela Iliescu Bogdan Merfea Nicolae Surdu Vasile Iuga Chairman of the CEO & Board Board Member Board Member Board Member Board Member Managing Partner- Former CEO and Ex-Managing Axx