Mbh Bank Plc. Class A · BET:MKBBANK
Mbh Bank Plc. Class A — MKB Group — Q4 2022 Earnings Presentation
35 slides from Mbh Bank Plc. Class A's earnings presentation, Mar 30, 2023
Slide 1: Q4 2022 MKB Group Investor Presentation
Q4 2022 MKB Group Investor Presentation Budapest, 30 March 2023
Slide 2: Note on adjusted financial figures and alternative performance measures
We kindly draw your attention to that in this presentation MKB Bank’s underlying financial performance presented – if not stated otherwise – using adjusted financial figures (alternative performance measurement indicators – APM). For definition and calculation methodology of alternative performance
Slide 3: Executive summary
Executive summary Business environment Financial performance Business performance Strategic aspiration Annexes Unadjusted Profit Abbreviations Disclaimer
Slide 4: Increasing profitability and efficiency amid macroeconomic turbulence and integration challenges
Increasing profitability and efficiency amid macroeconomic turbulence and integration 4 challenges 177 23,4% 24,0% 6.219 6.466 6.575 315.7% Customer 119 17,5% Deposit 205.8% 13,7% LCR 136.7% 43 6,7% ROE PAT 27 12 Q4 2021 Q3 2022 Q4 2022 2021 FY 2022 FY Q4 2021 Q3 2022 Q4 2022 2021 FY 2022 FY Q4 2021
Slide 5: Key highlights by business lines
5 Key highlights by business lines ▪ Gross loan portfolio increased by 10.9% y/y, supported by the acquisition of Sberbank portfolio on the one hand, and Gross Retail Loan accompanied by limited retail deposit growth on the other +10,9% ▪ Product innovations: GO! Platinum Credit Card, ÉnPostám co-br
Slide 6: Business environment
Executive summary Business environment Financial performance Business performance Strategic aspiration Annexes Unadjusted Profit Abbreviations Disclaimer
Slide 7: Rising inflationary pressures, declining real earnings and demand in Q4
7 Rising inflationary pressures, declining real earnings and demand in Q4 ▪ Despite the ongoing monetary tightening, GDP growth (y/y%) and employment Average inflation and wage growth (y/y %) inflation stood at 24.5% at the end of 35 December, with core inflation even higher. The 20 4,8 EUR/HUF exch
Slide 8: HNB raised the effective interest rate by 500 basis points
In order to protect the forint, HNB decided to raise the effective interest rate by 500 basis 8 points, which caused a significant rise in short yields on the Hungarian market HNB base rate and 3M BUBOR (%) SWAP yield curves (%) ▪ Interest rates were unchanged for the rest of 20 the quarter, with t
Slide 9: Changes in the regulatory environment and post closing events
9 Changes in the regulatory environment and post closing events # Changes in Q4 Extension of interest rate cap for loans: interest rate cap has been extended for SME companies’ loans and mortgage loans with a 5-year fixed interest rate until 30 1 June 2023 Interest rate cap on the deposits of retail
Slide 10: Financial performance
Executive summary Business environment Financial performance Business performance Strategic aspiration Annexes Unadjusted Profit Abbreviations Disclaimer
Slide 11: Yearly profit increases almost 50%
11 Yearly profit increases almost 50% PAT (HUF bn), q/q changes PAT (HUF bn), y/y changes Accounting profit after tax Adjusted profit after tax Adjusted profit after tax including BB 1Q results 176.6 +48.3% 119.1 +129,6% 61,0 42,8 45,5 43,3 40,3 26,8 14,8 11,7 9,4 FY 2021 FY 2022 -7,9 Q4 2021 Q1 202
Slide 12: Extra profit tax and integration costs are the main adjustments on PAT in 2022
12 Extra profit tax and integration costs are the main adjustments on PAT in 2022 2022Y adjusted Profit after tax breakdown (HUF bn) 14.8 -4.4 8.0 4.8 3.6 26.8 Q4 +69.1 8.2 176.6 4.8 27.2 29.0 In order to foster understanding of the underlying financial 107.4 performance, MKB Group uses adjustments
Slide 13: HUF 176.6 bn adjusted PAT in 2022 driven by net interest income
13 HUF 176.6 bn adjusted PAT in 2022 was mainly driven by the increase in Net interest income ADJUSTED P&L MKB BANK MKB pre-merger (HUF bn) 2021 2022 ∆% ∆% ∆% Q4 FY Q1 Q2 Q3 Q4 FY Y/Y (Y) Y/Y Q/Q ▪ Adjusted profit after tax for 2022 increased by 48.3% y/y to HUF 176.6 bn, reflecting the Net operatin
Slide 14: Boosting GOI offset the effects of inflation and increasing risk costs
14 Boosting GOI offset the effects of inflation and increasing risk costs 477.8 338.6 +139.2 ▪ Gross Operating Income of MKB has been increasing in every quarter, reaching HUF 138.3 bn (+HUF 14.0 bn q/q, +HUF 139.2 124.4 138.3 bn y/y) in Q4 2022, which is up by 64.4% compared to the same 118.9 GOI 8
Slide 15: Core income grew by HUF 221bn y/y
15 MKB Group’s core income grew by HUF 221bn y/y as the interest rate hike allowed for outstanding interest incomes Net interest 419.1 ▪ Net interest income reached HUF 133.0 bn in Q4 2022 (+16.9% q/q, +157.9% y/y). MKB group successfully exploited the market income +26.7% +108.9% potential using it
Slide 16: Improved cost-to-income ratio
Expanding income counterbalanced the effects of increasing cost due to inflation rate hike, 16 resulting in improved cost-to-income ratio GAE breakdown (HUF bn) Cost-to-income ratio (adjusted, %) 110.0 65.6% 94.3 -14.3% +16.7% 54.0% 51.8% Personnel expenses 45.2% 40.1% 28.4 26.1 27.0 34.5 22.4 Q4 20
Slide 17: Increasing total coverage due to allowance charge on performing loans as per IFRS9
17 Increasing total coverage due to allowance charge on performing loans as per IFRS9 NPL exposures (HUF bn), NPL ratio, NPL Direct coverage and Total coverage (%) 1,2 56.6% 225.4 224.2 203.9 53.9% 56.0% 174.1 49.7% 160.5 47.0% 4.5% 4.5% 4.6% 3.8% 4.3% 3.6% 4.1% 3.8% 3.5% 3.6% Q4 2021 Q1 2022 Q2 202
Slide 18: HUF 116.7 bn capital accumulation resulted in increasing CAR in 2022
18 HUF 116.7 bn capital accumulation resulted in increasing CAR in 2022 Shareholders’ Equity (HUF bn) CAR (%) +116.7 +7.08% 19.7% 18.4% 17.6% 1.2% 16.9% 16.3% 1.8% 808.7 1.5% 1.9% 1.9% 107.4 107.4 755.3 692.0 7.7 -12.8 17.2% 18.0% 14.4 92.6 16.1% 15.0% 14.4% 72.0 79.9 61.0 88.5 Q4 2021 Q1 2022 Q2 20
Slide 19: Strong y/y balance sheet growth supported by Sberbank portfolio acquisition
19 The strong y/y balance sheet growth was partially supported by the acquisition of the Sberbank portfolio STATEMENT OF BALANCE SHEET MKB BANK (HUF) bn 2021 2022 ∆% ∆% ▪ Total assets growth during the last 12 months was mainly driven by the Q4 Q1 Q2 Q3 Q4 Y/Y Q/Q customer loan portfolio (+13.2% y/y
Slide 20: Business performance
Executive summary Business environment Financial performance Business performance Strategic aspiration Annexes Unadjusted Profit Abbreviations Disclaimer
Slide 21: Increasing volumes and stable market shares in Q4 2022
21 Increasing volumes and stable market shares in Q4 2022 Customer gross loan1 portfolio (HUF bn) Market shares2 (%) ∆ Y/Y 5,036.9 5,011.1 Gross loan portfolio 4,428.7 4,615.7 4,640.5 579.8 592.5 +48,3% 399.5 626.5 544.4 20.1% 19.5% 19.3% 19.6% 19.4% 2,362.9 2,336.3 +11.8% 2,089.0 2,056.0 2,149.9 16
Slide 22: Stable Retail loan portfolio in 4Q
22 Stable Retail loan portfolio in 4Q Retail business loans – Retail business – Retail business – Gross volume (HUF bn) Customer deposits by type (HUF bn) NPL (HUF bn), NPL (%) 2,894.0 2,868.2 2,898.9 ∆ Y/Y 2,817.7 2,816.3 +10.9% 1,750.5 1,754.5 112.2 109.6 1,582.7 1,597.6 1,598.6 170.9 165.4 -0.6%
Slide 23: Increasing market shares in mortgage and personal loans disbursements
23 Increasing market shares both in mortgage loans and personal loans new disbursements Retail mortgage loans – Retail mortgage loans – New loan disbursement (HUF Gross volume (HUF bn) and market share (%) bn) and market shares (%) Mortgage loans: ▪ Retail mortgage loan volume growth (HUF +19.9bn y/
Slide 24: Corporate gross loans up 19.3%, deposits up 6.9%
Corporate business segment gross loans increased by 19.3%, customers’ deposits increased by 6.9% 24 annually Corporate business – Corporate business – Corporate business – Gross loan portfolio (HUF bn) Customer deposits by type (HUF bn) NPL (HUF bn), NPL (%) +19.3% +6,9% ∆ Y/Y 2,701.6 2,696.5 65.2 5
Slide 25: Leasing business outperformed competitors and grabbed market leader position
25 MKB Group’s leasing business outperformed the competitors and grabbed the market leader position Gross volume (HUF bn) Number of clients (thousand) 525.1 511.2 527.5 532.1 522.9 64.4 62.8 61.1 58.7 56.0 2021 Q4 2022 Q1 2022 Q2 2022 Q3 2022 Q4 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 ▪ MKB Group le
Slide 26: Strategic aspiration
Executive summary Business environment Financial performance Business performance Strategic aspiration Annexes Unadjusted Profit Abbreviations Disclaimer
Slide 27: Roadmap
Roadmap 27 The aim of the merger of MKB Group’s banks is to create an integrated universal bank providing a comprehensive range of products to both retail and corporate customers, as well as playing a key role in the Hungarian economy • Market leader / outstanding • Legal merger of MKB and Takarékba
Slide 28: Awards and Recognitions
28 Awards and Recognitions Visa Awards EXIM Awards Leadership – industry HR Awards recognitions MKB group received MKB Bank was recognised as Kitti Dobi, Chief HR Officer won Visa #1 Issuer 2022 „The Most Innovative Bank of the At the Women in Finance Gala, „HR Leader of the Year” Year”, Chief Busin
Slide 29: ESG objectives
ESG objectives Dedicated Team Strategy Awards 1. Partner in sustainable finance: We introduce sustainability aspects into financial processes and decisions, Badge In 2021, MKB – through which our sustainable operation becomes conscious along a well-defined set of criteria and values. Pannonia Fund M
Slide 30: Annexes
Executive summary Business environment Financial performance Business performance Strategic aspiration Annexes Unadjusted Profit Abbreviations Disclaimer
Slide 31: Unadjusted and adjusted P&L
31 Unadjusted and adjusted P&L P&L Q4 2022 MKB BANK (HUF bn) Unadjusted Adjusted P&L P&L Net operating income 55.4 66.7 Gross operating income 135.8 138.3 Net interest income 135.7 133.0 Net fee and commission income 20.3 20.3 Other operating income -20.2 -15.0 FX and FV results -7.8 -7.8 Other inco
Slide 32: Annexes
Executive summary Business environment Financial performance Business performance Strategic aspiration Annexes Unadjusted Profit Abbreviations Disclaimer
Slide 33: Abbreviations
33 Abbreviations M KB, M KB Bank, M KB Bank Plc. Secured loans Home Loans + Free-to-Use M ortgages M KB Group Unsecured loans Personnel loans + Baby loans + Other consumer loans M BH, M agyar Hungarian Bankholding Ltd. FVTOCI Fair value through OCI Bankholding FVTPL Fair value through P&L NBH Nation
Slide 34: Disclaimer
Executive summary Business environment Financial performance Business performance Strategic aspiration Annexes Unadjusted Profit Abbreviations Disclaimer
Slide 35: Disclaimer
35 DISCLAIMER This presentation contains or may contain statements that are or may be deemed to be, “forward-looking statements” which are Investor relations prospective in nature. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations