Mbank Sa · GPW:MBK
Mbank Sa — BRE Bank — Q1 2009 Earnings Presentation
56 slides from Mbank Sa's earnings presentation, Apr 29, 2009
Slide 1: Results of BRE Bank Group Q1 2009
Results of BRE Bank Group Q1 2009 Management Board of BRE Bank Presentation for Investors and Analysts 29 April 2009 1
Slide 2: Agenda
Agenda BRE Bank Group Results Q1 2009 BRE Bank Group: Quarter in Brief Analysis of the Consolidated Financial Results Risk Management & Funding Appendix Detailed Results of Business Lines, Q1 2009 Additional Information: Selected Financial Data Macroeconomics Unless indicated otherwise, the presente
Slide 3: Agenda
Agenda BRE Bank Group Results Q1 2009 BRE Bank Group: Quarter in Brief Analysis of the Consolidated Financial Results Risk Management & Funding Appendix Unless indicated otherwise, the presented financial data refer to the BRE Bank Group 3
Slide 4: Summary of Q1 2009 in the BRE Bank Group
Summary of Q1 2009 in the BRE Bank Group 1 PLN 103 M of pre-tax profit in Q1 2009 despite adverse market conditions 2 Risk provisions growth mainly due to derivatives, maintaining conservative approach BREnova: 3 revenue enhancement and cost optimisation well under way 4
Slide 5: Summary of Q1 2009 in the BRE Bank Group
Summary of Q1 2009 in the BRE Bank Group Profitability of Business Continued and discontinued operations Profit before tax PLN 103.3 M ROE before tax 10.4% Cost/Income (C/I) 53.4% Capital adequacy ratio (CAR) 10.26% 5
Slide 6: Profitability of the Business Lines
Summary of Q1 2009 in the BRE Bank Group Results of the Business Lines Profitability of the Business Lines Profit before Tax by Business Line Q1 2009 v. Q4 2008 (PLN M) Corporates & Financial Markets Retail Banking (+PB) Corporates and Institutions Trading and Investment Activity -16.9% +18.1% -/+ 7
Slide 7: Development of Loans to Clients
Summary of Q1 2009 in the BRE Bank Group Development of Loans to Clients Growth of Gross Loans Structure of the Gross Loans Portfolio (PLN B) as at 31.03.2009 +8.0% +8.0% BRE - Individual BRE - Public clients sector 2.8 1.6 51.3% 0.1% -0.1 BRE - others 0.9% +10.6% +6.2% -10.3% BBH QoQ QoQ QoQ BRE Ba
Slide 8: Development of Deposit Base
Summary of Q1 2009 in the BRE Bank Group Development of Deposit Base Development of Deposits Structure of Amounts Due to Clients (PLN B) as at 31.03.2009 -6.5% -6.5% BRE - Individual BRE - Public clients sector +0.3 56.0% 1.0% -1.0 -1.8 BBH -4.6% -10.8% x5 QoQ QoQ QoQ BRE Bank 0.6% Factoring 37.8 35
Slide 9: Balances on Current Accounts
Summary of Q1 2009 in the BRE Bank Group Development of Deposit Base: Balances on Current Accounts Balances on current accounts of BRE Banks’ customers stable in the long term Deposits on Current Accounts – Corporate Clients Deposits on Current Accounts – Retail Clients 3,0 12 2,5 10 2,0 8 1,5 2.9 6
Slide 10: BREnova Revenue Enhancement: Corporates & Markets
BREnova Revenue Enhancement Major Achievements in Q1 2009 Corporates & Markets Development of credit margin Major achievements to date in corporate clients segment Margin on total loan portfolio New pricing policy has already brought significant increase in credit margin in all client segments F
Slide 11: BREnova Revenue Enhancement: Retail Banking
BREnova Revenue Enhancement Major Achievements in Q1 2009 Retail Banking Improvement in non-mortgage product penetration & sales Major achievements to date Total revenue Poland +37% Regular revenues growth attributable to intensified cross-selling activities addressing existing retail client base
Slide 12: BREnova Cost Optimisation
BREnova Cost Optimisation Major Achievements in Q1 2009 All the planned cost reductions Major achievements to date are under way Change of Total Overhead Costs YoY and QoQ Investment and Resource Allocation Committee (PLN M) was established – to monitor the process and decisions relating to costs
Slide 13: Agenda
Agenda BRE Bank Group Results Q1 2009 BRE Bank Group: Quarter in Brief Analysis of the Consolidated Financial Results Risk Management & Funding Appendix Unless indicated otherwise, the presented financial data refer to the BRE Bank Group 13
Slide 14: P&L of Continued Operations
Analysis of the Results, Q1 2009 P&L of Continued Operations (PLN M) Q1 2009 Q4 2008 Change QoQ Total income* 672.5 593.7 +13.3% Total cost (359.1) (472.4) -24.0% Operating profit** 313.3 121.3 +158.3% Net provisions (210.0) (130.5) +61.0% Profit before tax 103.3 (9.1) -/+ Net profit*** 77.2 (18.9)
Slide 15: Income of BRE Bank Group up 13%
Analysis of the Results, Q1 2009 Income of BRE Bank Group up 13% BRE Bank Group Income Q1 2009 v. Q4 2008 (PLN M) +13.3% Double digit increase +13.3% of Group income QoQ +3.3% QoQ -5.3% QoQ +98.7% QoQ +672.7% +211.1% QoQ QoQ driven by: 47.2 123.0 121.8 -16.6 Steady increase 397.1 of net interest i
Slide 16: Costs: Tight Management Shows Effects
Analysis of the Results, Q1 2009 Costs: Tight Management Shows Effects Overhead Costs (+Depreciation) of BRE Bank Group Q1 2009 v. Q4 2008 C/I ratio* of regular operations Costs -24.0% -24.0% C/I down to 53.4% in Q1 2009 PLN M 480 472.4 % 90 440 80 400 360 359.1 70 Total overhead costs (incl. depr
Slide 17: Capital Adequacy Ratio at Target Level
Analysis of the Results, Q1 2009 BRE Bank Group’s Capital Adequacy Ratio at Target Level Relation between Capital Adequacy Ratio (CAR) Available growth in RWA as at 31.03.2009 (PLN B; LHS) and Risk Weighted Assets (RWA) RWA (PLN B; LHS) 90 12% CAR (%; RHS) 80 11% 70 10% 60 9% 50 8% 40 7% 30 6% 20 5%
Slide 18: Agenda
Agenda BRE Bank Group Results Q1 2009 BRE Bank Group: Year in Brief Analysis of the Consolidated Financial Results Risk Management & Funding Appendix Unless indicated otherwise, the presented financial data refer to the BRE Bank Group 18
Slide 19: Structure of Loan Loss Provisions in Q1 2009
Risk Management & Funding Structure of Loan Loss Provisions in Q1 2009 Provisions reflect the overall economic situation downfall and derivative instruments crash BRE Bank Group’s Impairment Losses on Loans and Advances Growth of LLP in Corporates and Financial in Q1 2009 vs. Q4 2008 Markets drive
Slide 20: FX Mortgage Loans: Development of Loan Installment
Risk Management & Funding FX Mortgage Loans: Development of Loan Installment A significant LIBOR CHF 3M 3,5 CHF/PLN 3,4 depreciation of PLN 3,0 3,2 3,0 in the period 2,5 LIBOR CHF 3M % 2,8 2,0 August 2008 – April 2009 1,5 2,6 was amortized 1,0 2,4 2,2 by decrease 0,5 CHF/PLN 2,0 of CHF interest rate
Slide 21: Loan to Deposit Ratio
Risk Management & Funding Loan to Deposit Ratio The ratio of loans to deposits stands at 159.1%. However, funding policy for FX risk mitigation is implemented. BRE mid-term loans in CHF fund CHF-denominated mortgages, therefore... ...the actual ratio of loans funded from deposits is 93.2% LtD Ratio
Slide 22: Maturity of Long- and Midterm FX Loans by 2010
Risk Management & Funding Maturity of Long- and Midterm FX Loans by 2010 Maturity of Long- and Mid-term FX Loans by 2010 (PLN B) 24 By the end of 2010 BRE Bank 20 will need to refinance PLN 4.6 B 16 of long- and mid-term loans drawn 12 in the past to fund FX lending. 8 This means that... 4 ... mid-t
Slide 23: Summary of Q1 2009
Summary of Q1 2009 1 Revenues up, costs down 2 High risk provisions but main risk aspects under control BREnova: 3 continued focus on initiatives, more impact to be seen in next quarters 23
Slide 24: Agenda
Agenda BRE Bank Group Results Q1 2009 BRE Bank Group: Year in Brief Analysis of the Consolidated Financial Results Funding & Risk Management Appendix Detailed Results of Business Lines, Q1 2009 Additional Information: Selected Financial Data Macroeconomics Unless indicated otherwise, the presented f
Slide 25: Appendix
Appendix Detailed Results of the Business Lines Slide No. Additional Information: Selected Financial Data Slide No. – slides No. 26-41 – slides No. 42-55 BRE Bank Retail Banking 26-32 P&L acc. to IFRS 43 Summary of Q1 2009 27 Results of Strategic Subsidiaries 44 Customer Acquisition & Volume Trends
Slide 26: Detailed Results of the Business Lines, Q1 2009: Retail Banking
Appendix Detailed Results of the Business Lines, Q1 2009 Retail Banking 26
Slide 27: BRE Bank Retail Banking (+PB): Summary of Q1 2009
Appendix BRE Bank Retail Banking (+PB): Summary of Q1 2009: Financial Results Structure of the Profit before Tax of Retail Banking Profit before Tax of the Segment -21.5 -19.3 in Q1 2009 (by quarter, PLN M) -24.5 (PLN M) 69.3 70.9 -16 86.7 57.5 48.9 43.3 -27.1 68.2 95.3 74.0 MultiBank; 45.4 Other; 2
Slide 28: Retail Banking (Poland): Customer Acquisition and Volume Trends
Appendix BRE Bank Retail Banking (Poland): Customer Acquisition and Volume Trends At the end of Q1 2009 End of Q4 2008 Change End of Q1 2009 (M) 4,00 3,00 2.5 M clients +4.1% +4.1% 2.6 M 2,00 3.2 M 3.3 M 1,00 accounts +4.7% +4.7% 0,00 Customers Accounts 15.3 B deposits (PLN) -6.9% 14.3 B -6.9% mBank
Slide 29: Retail Banking (CZ/SK): Customer Acquisition and Volume Trends
Appendix BRE Bank Retail Banking (CZ/SK): Customer Acquisition and Volume Trends Data as at the end of Q1 2009 End of Q4 2008 Change End of Q1 2008 (thou.) 600 500 244.1 thou. clients +20.4% 293.9 thou. +20.4% 400 300 200 100 0 Clients Accounts 389.3 thou. accounts +35.3% 526.5 thou. +35.3% (EUR M)
Slide 30: Retail Banking: Deposits & Loans: Market Share
Appendix BRE Bank Retail Banking: Deposits & Loans: Market Share BRE Retail Deposits and Investment Funds BRE Retail Loans (PLN B) March (PLN B) March 2009: 2009: 3.6% 7.1% 1.3% 1.7% 2.1% 2.6% 3.1% 4.0% 1.2% 2.1% 3.0% 4.5% 5.2% 6.8% 20 30 400 400 27,5 17,5 350 25 350 15 22,5 300 300 20 12,5 250 250
Slide 31: Mortgage Loans: Portfolio Structure and Quality
Appendix BRE Bank Retail Banking: Mortgage Loans: Portfolio Structure and Quality BRE Bank’s Mortgage Loans Portfolio Structure of the Retail Banking Loans Portfolio (Retail Banking loans to individuals) (Household Loans) at 31.03.2009 9% Total PLN FX 2% 5% Balance-sheet value 23.16 2.36 20.80 (PLN
Slide 32: Retail Banking: Net Sales by Quarters
Appendix BRE Bank Retail Banking: Net Sales by Quarters mBank Clients Deposits Loans (thou.) +4.1% (PLN M) - 4.1% (PLN M) +12.0% 535 -443 84 1304 83 768 64 762 2688 101 1202 104 1347 2 120 10 896 10 453 634 12 207 2 035 835 10 903 1 629 7 629 5 399 07 08 09 08 08 08 08 09 08 07 08 08 08 08 08 09 09
Slide 33: Detailed Results of the Business Lines, Q1 2009: Corporates & Financial Markets
Appendix Detailed Results of the Business Lines, Q1 2009 Corporates & Financial Markets 33
Slide 34: Corporates and Financial Markets: Summary of Q1 2009
Appendix Corporates and Financial Markets: Summary of Q1 2009: Financial Results Financial Results of the Segment, Q1 2009 (PLN M) Segment’s profit before tax at PLN 14.0 million in Q1 2009 91.1 Segment’s contribution to the profit before tax -16.4 of the BRE Bank Group at 13.6% 89.0 Significa
Slide 35: Corporates and Institutions: Customer Acquisition and Volume Trends
Appendix Corporates and Institutions: Customer Acquisition and Volume Trends Q1 2008 Change Q1 2009 Corporate Deposits (PLN B) corporate 5.6 12 435 clients +5.2% +5.2% 13 081 2.6 12.5 12.2 corporate 21.8 B loans (PLN) +22.2% +22.2% 26.6 B Q1 2008 Q1 2009 thereof loans for Corporate Loans 12.8 B ente
Slide 36: Corporates and Institutions: Loans and Deposits – Market Share
Appendix Corporates and Institutions: Loans and Deposits – Market Share BRE Bank’s Market Share in Corporate* Loans and Deposits January 2005 – March 2008 12% Corporate* Deposits Volume (BRE Bank only, PLN B) 10% 8.6% 8.6% 14.0 14.2 13.7 12.9 12.7 13.3 8% 12.45 12.23 10.7 10.9 6% 6.5% 6.5% 4% 5 05 0
Slide 37: Corporates and Institutions: Leasing and Factoring
Appendix Corporates and Institutions: Leasing and Factoring BRE Leasing Intermarket Group PLN 4.8 M of pre-tax profit in Q1 2009 Intermarket Group companies* reported pre-tax loss of PLN -13.1 M in Q1 2009 related to net Q1 2009 pre-tax profit was impairment of EUR 3.7 M for its Romanian subsi
Slide 38: BRE Bank Hipoteczny (BBH)
Appendix Corporates and Institutions: BRE Bank Hipoteczny (BBH) Loans Portfolio (PLN M) Profit before Tax (PLN M) Balance-sheet Exposure 76 73 729 704 73 86 574 100 569 118 466 190 53.1 399 213 3567 3757 -9.7% 2942 2595 2196 1 643 1 775 11.4 10.3 31.12.2005 31.12.2006 30.06.2007 31.12.2007 30.06.200
Slide 39: Dom Inwestycyjny BRE Banku (DI BRE)
Appendix Corporates and Institutions: Dom Inwestycyjny BRE Banku (DI BRE) Number of Accounts with DI BRE - End of Q1 2009 Profit before tax at PLN 5.1 M in Q1 2009 (thousand) compared to PLN 10.5 M in Q1 2008 DI BRE accounts 22.1 (annualised ROE in Q1 2009: 57%) eBroker (mBank) 124.9 Strengtheni
Slide 40: Proprietary Investments Portfolio
Appendix Corporates and Institutions: Proprietary Investments Portfolio Major Equity Investments Equity Stake at 31.03.2009 PZU SA 0.76% Garbary Sp. z o.o. 100.00% Portfolio Value (PLN M) Incl.: At the end of Q1 2009, value at cost PLN 95.1 M of proprietary investments and bonds* mezzanine reached
Slide 41: Trading and Investment Activity: Market Share
Appendix Trading and Investment Activity: Market Share BRE Bank’s Market Share* BRE Bank in the Market in Investment Banking Services of Non-Treasury Debt** (BRE – in navy blue) at 31.03.2009 (PLN M) Market 13 839.4 BRE Bank 6.7% 19.4% 12 321.8 11 935.1 3 317.5 2 728.7 1 696.8 Treasury IRS/FRA Bills
Slide 42: Additional Information: Selected Financial Data
Appendix Additional Information: Selected Financial Data 42
Slide 43: Consolidated Profit and Loss Account under IFRS
Appendix Additional Information: Selected Financial Data Consolidated Profit and Loss Account under IFRS PLN’000 By quarter Q1 2008* Q2 2008* Q3 2008* Q4 2008* Q1 2009 Net interest income 315 880 327 305 364 846 384 421 397 103 Net commission income 142 381 145 359 135 026 128 700 121 842 Dividend i
Slide 44: Results of the Strategic Subsidiaries
Appendix Additional Information: Selected Financial Data Results of the Strategic Subsidiaries Profit before Tax of Consolidated Subsidiaries 34.1 (PLN M) Q1 2009 profit 19.3 Q1 2008 Q1 2009 before tax 11.4 10.3 10.5 of strategic 10.5 7.4 7.8 4.8 5.8 5.1 2.5 subsidiaries 3.1 2.8 0.0 1.2 0.1 at PLN 3
Slide 45: Net Interest Income & Margin
Appendix Additional Information: Selected Financial Data Net Interest Income & Margin Interest Income Structure Net Interest Income, Q1 2009 by Business Line (by quarter, consolidated data, PLN M) (PLN M) 7 1090 56 Other +3.3% +3.3% 990 9 5 890 72 43 10 Debt securities 8 held for 790 52 -0.3 58 trad
Slide 46: Commission Income
Appendix Additional Information: Selected Financial Data Commission Income Net Commission Income, Q1 2009 by Business Line Structure of Net Commission Income Q1 2009 (PLN M) (%) Guarantees and trade finance Client's commissions -5.3% -5.3% and fees 5% accounts and money Other* transfers 10% 17% 9.8
Slide 47: Trading Income
Appendix Additional Information: Selected Financial Data Trading Income Net Trading Income (by quarters, consolidated data, PLN M) 180 150 120 90 60 30 0 -30 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 K1 K2 K3 Others Risk&Liquidity Financial Markets Retail Banking Trading Income Structure (%) Q1 2009 T
Slide 48: Administrative Expenses Structure
Appendix Additional Information: Selected Financial Data Administrative Expenses Structure Structure of Administrative Expenses (+Depreciation) C/I Ratio of BRE Bank Group* (by quarter, PLN M, consolidated data) (%) 500 12.5 450 58.2 400 60.6 350 12.6 10.6 15.7 10.3 48.5 51.3 45.5 194.0 58.5 300 53.
Slide 49: Loans and Deposits in Q1 2009
Appendix Additional Information: Selected Financial Data Loans and Deposits in Q1 2009 Loans Deposits (PLN B, net) (PLN B) +50.8% +5.1% 56.2 52.1 33.6 36.4 38.1 37.8 35.3 43.4 37.2 39.7 +7% +9% +20% +8% +8% +5% -1% -6% 31.03.08 30.06.08 30.09.08 31.12.08 31.03.09 31.03.08 30.06.08 30.09.08 31.12.08
Slide 50: Balance Sheet Analysis: Assets
Appendix Additional Information: Selected Financial Data Balance Sheet Analysis: Assets Structure of Assets Loans and Advances to Customers* (PLN B) - Portfolio by Customer Category (PLN B) 90 60 0.7 80 5.3 6% 5.5 1% 7% 0.7 3.4 4% 2.4 3% 1% 70 5.5 7% 6.4 8% 50 3.9 6% 5.6 7% 5.4 6% 0.7 5.5 9% 2.8 4%
Slide 51: Balance Sheet Analysis: Liabilities
Appendix Additional Information: Selected Financial Data Balance Sheet Analysis: Liabilities Structure of Liabilities Structure of Deposits (PLN B) (PLN B) 90 40 0.1 0% 0.1 0% 80 0.3 1% 14% 14% 35 0.4 1% 11.6 11.7 0.2 1% 70 3.9 5% 1.8 2% 3.9 5% 30 16.6 5.3 8% 1.8 2% 19.3 5.7 9% 6% 14.8 60 10% 4.2 19
Slide 52: Capital Adequacy Ratio
Appendix Additional Information: Selected Financial Data Capital Adequacy Ratio Capital Adequacy Ratio under NCA Capital Requirement 31.12.2007 31.12.2007 Q4 2008 Q1 2009 (PLN M) Basel I Basel II Basel II Basel II Credit risk 2 998 2 896 4 177 4 369 Market risk 93 123 89 66 Operational risk - 280 32
Slide 53: Credit Provisions
Appendix Additional Information: Selected Financial Data Credit Provisions Net Credit and Loans Impairment Provisions BRE Bank Portfolio Quality (consolidated data, PLN M) (%) -46 -76.8 -269.1 3,9 4 4 3,8 4 4 3,5 3,6 3,4 10 3,5 -10 -7 3,2 3 2,9 -10 -6 -7 2,7 3 3 -30 1 -22 3 -23 2,8 3 2,5 2,5 -50 -35
Slide 54: Structure of BRE Bank's Risk Portfolio
Appendix Additional Information: Selected Financial Data Structure of BRE Bank’s Risk Portfolio Quality 5.6% 5.5% 4.8% 4.4% 4.6% 3.6% 3.6% 3.4% 2.8% 2.8% 3.4% of the Loans 3 2.8 2.5 2.2 1.9 1.5 1.4 1.4 1.4 1.6 2.3 and Default 100% Portfolios 97.0 97.2 97.5 97.8 98.1 98.5 98.6 98.6 98.6 98.4 97.7 80%
Slide 55: Average PD and Portfolio Provisions
0,00% 0,10% 0,20% 0,30% 0,40% 0,50% 0,60% 2006-01 0,323% 2006-02 0,302% 2006-03 0,295% 2006-04 0,314% 2006-05 0,281% 2006-06 0,263% 2006-07 0,267% 2006-08 0,227% 2006-09 0,196% 2006-10 0,234% 2006-11 0,237% Appendix 2006-12 0,198% 2007-01 0,201% 2007-02 0,233% 2007-03 0,246% 2007-04 0,196% 2007-05 0
Slide 56: Contact
Contact BRE Bank’s Investor Relations Officers at your service: Joanna Filipkowska Direct dial: +48 22 829 04 53 Head of Investor Relations Secretariat: +48 22 829 02 98 Fax: +48 22 829 02 97 E-mail: joanna.filipkowska@brebank.pl or Agnieszka Solarz Direct dial: +48 22 829 08 18 Investor Relations F