Bank Millennium Sa · GPW:MIL
Bank Millennium Sa — Shareholder Meeting (March 2009)
30 slides from Bank Millennium Sa's shareholder meeting presentation, Mar 27, 2009
Slide 1: 2008 Results and New Strategy Millennium 2010
Annual General Meeting of Bank Millennium S.A. Bank Millennium Group 2008 Results and New Strategy Millennium 2010 Presentation for Bank Millennium’s General Meeting of Shareholders 27 March 2009 1
Slide 2: Disclaimer
Annual General Meeting of Bank Millennium S.A. Disclaimer The matters discussed in this presentation include forward-looking statements and these statements are based on management’s current expectations and beliefs and are subject to a number of factors and uncertainties that could cause actual res
Slide 3: Macroeconomic Overview
Annual General Meeting of Bank Millennium S.A. Macroeconomic Overview Bank Millennium 2008 Results New strategy - Millennium 2010 Profit distribution proposal 3
Slide 4: Macroeconomic Overview
Annual General Meeting of Bank Millennium S.A. Macroeconomic Overview § Poland experienced strong economic growth since Economic outlook deteriorated in late 2008 2006 fuelled by investments and private 25 23,8 consumption. § The situation worsened in Q3 2008: GDP grew at a 20 19 16,7 15,7 robust pa
Slide 5: Macroeconomic Overview
Annual General Meeting of Bank Millennium S.A. Macroeconomic Overview CEE currencies vs EUR since Lehman’s bankruptcy 1,35 1,3 § Emerging markets currencies, including Polish 1,25 Zloty, were severely affected by the financial crisis. 1,2 1,15 § Since September 2008, Polish Zloty was the 1,1 worst p
Slide 6: Bank Millennium 2008 Results
Annual General Meeting of Bank Millennium S.A. Macroeconomic Overview Bank Millennium 2008 Results New strategy - Millennium 2010 Profit distribution proposal 6
Slide 7: Main highlights of 2008 consolidated results
Annual General Meeting of Bank Millennium S.A. Main highlights of 2008 consolidated results Change 2008 2007 y/y Volumes in PLN million Total deposits*: 31 826 21 801 + 46 % Total loans: 33 748 22 027 + 53 % Loans to deposits: 102.6% 95.1% + 7.5 p.p. Net income: 413.4 461.6 - 10.4 % Cost to income r
Slide 8: Strong market share growth especially in deposits from individuals
Annual General Meeting of Bank Millennium S.A. Strong market share growth especially in deposits from individuals Market share evolution Ranking Dec. 2006 Dec. 2007 Dec. 2008 (Sep.08) Deposits from Individuals 4.0% 5.3% 7.1% 5 Corporate Deposits 3.7% 3.9% 3.8% 7 Total Deposits 3.9% 4.6% 5.6% 6 Mille
Slide 9: Strengthening presence in important regions of Poland
Annual General Meeting of Bank Millennium S.A. Strengthening presence in important regions of Poland Branches by voivodships § 490 branches after opening 80 24 80 new in 2008. 21 10 33 31 § 4th largest retail banking network in Poland with 119 significantly strengthened 10 presence in many important
Slide 10: Net profit affected by FX options valuation in 4Q
Annual General Meeting of Bank Millennium S.A. Net profit affected by FX options valuation in 4Q ROE 19.9% 15.7% Net Profit § Net profit of 2008 was 10% lower PLN m 11.9% compared to 2007 516,5 Extraordinary 461,6 items* 103,1 -10.4% § 4Q 08 net income reached PLN 35.6 Reported 413,4 million, strong
Slide 11: Total Operating Income grew 8% yearly
Annual General Meeting of Bank Millennium S.A. Total Operating Income grew 8% yearly Total Operating Income § Strong 44% annual growth of Net PLN m Interest Income. Growing business volumes, especially deposits, +8.1% together with higher NIM in 2007 1848,6 Y/Y versus previous year, were the main 17
Slide 12: Costs grew 12.6% yearly
Annual General Meeting of Bank Millennium S.A. Costs grew 12.6% yearly Operating Costs Operating Costs by quarters Y/Y Q/Q No. of PLN m 6067 6291 6761 7087 7049 1191,7 employees 1058,3 +12.6% 72,6 -18% +19% PLN m 309,2 300,3 301,9 314,6 88,4 274,9 510,2 431,1 +18% +12% +1.8% +4.2% +13% -4% 538,8 609
Slide 13: Excellent growth in deposits (+46% yearly)
Annual General Meeting of Bank Millennium S.A. Excellent growth in deposits (+46% yearly) Customers Funds § Very good result in deposits PLN m collection: volume growth of PLN 22% 34 229 Investment 10 billion (46%) yearly with faster 28 016 2 404 products* growth of households deposits 6 215 9 488 (
Slide 14: Loan growth accelerated in 4Q due to FX effect
Annual General Meeting of Bank Millennium S.A. Loan growth accelerated in 4Q due to FX effect Loan Portfolio (Net) § Loan portfolio grew 53% y/y of which 22% just in 4Q, but was strongly influenced by PLN m the depreciation of the Polish Zloty 53% (quarterly growth would be 4% and 33 748 annual 26%
Slide 15: Strong growth in main loans products
Annual General Meeting of Bank Millennium S.A. Strong growth in main loans products Mortgage loans portfolio Cash loans portfolio (gross) PLN m 11.2% Market share PLN m 11.5% 1 621 22 162 54% 69% 1 051 13 093 31/12/07 31/12/08 31/12/07 31/12/08 § Total sales of mortgage loans in Leasing portfolio –
Slide 16: Impaired loans and charges in 2008
Annual General Meeting of Bank Millennium S.A. Impaired loans and charges in 2008 Impaired Loans (IFRS) PLN m Coverage ratio*: 79% 75% 75% 75% 67% ** § Share of impaired loans in total portfolio remained on the same 3,4% 3,2% 3,1% 3,0% 3,4% level as one year ago: 3.4% despite 1163 higher nominal amo
Slide 17: Rating of Bank Millennium
Annual General Meeting of Bank Millennium S.A. Rating of Bank Millennium Type of rating FITCH MOODY’S Long-term deposit rating A A3 Short-term deposit rating F-1 Prime-2 Financial strength rating C/D D Support 1 n.a. Outlook stable stable § During 4Q 2008 Moody’s rating agency changed only the outlo
Slide 18: New strategy - Millennium 2010
Annual General Meeting of Bank Millennium S.A. Macroeconomic Overview Bank Millennium 2008 Results New strategy - Millennium 2010 Profit distribution proposal 18
Slide 19: Bank Millennium is delivering what promised for 2009
Annual General Meeting of Bank Millennium S.A. Bank Millennium is delivering what promised for 2009 CONSUMER RETAIL CORPORATE FINANCE Industrialization of customer Gaining a top 3 position in Boosting customer acquisition and cross-selling mortgage loans acquisition, especially in Significant expans
Slide 20: Delivering financial targets
Annual General Meeting of Bank Millennium S.A. Delivering financial targets þCost-to-income Improving Cost/Income evolution* Dividend payments 83,6% Dividend paid in 74,4% Year year (in PLN mln) 67,7% 61,9% 61,1% 64,5% 2005 238 55,0% 2006 459 2007 144 2004 2005 2006 2007 1-3Q 2008 Target 2008 2009 2
Slide 21: Market environment challenges to the banking sector
Annual General Meeting of Bank Millennium S.A. Market environment challenges to the banking sector Economic slowdown is likely to lead to the Implications for the banking sector deterioration of the labour market conditions 24 § Slower credit growth triggered by lower 19 17,6 private consumption (du
Slide 22: Bank Millennium has a number of strengths to build on
Annual General Meeting of Bank Millennium S.A. Bank Millennium has a number of strengths to build on, which will still matter in the new market environment 1 2 3 Millennium has one of the largest … a strong presence in the retail … strong direct sales channels… branch networks in Poland… market… Num
Slide 23: New strategy - Millennium 2010
Annual General Meeting of Bank Millennium S.A. New strategy - Millennium 2010 Bank Millennium will become a lean and simple bank leveraging on its strong branch network, increasing focus on Retail and SME, with more conservative risk approach 1 Reinforce branch based banking 2 To focus on SME in cor
Slide 24: Millennium 2010 - Reinforce branch based banking in Retail
Annual General Meeting of Bank Millennium S.A. 1 Millennium 2010 - Reinforce branch based banking in Retail Rationale for focus Priorities going forward • Leverage on strong brand and network • 150 ths net customers to be acquired Focus on branch capillarity (490 branches) yearly through branches dr
Slide 25: Millennium 2010 - Focus on SME clients in Corporate
Annual General Meeting of Bank Millennium S.A. 2 Millennium 2010 - Focus on SME clients in Corporate • Network of RMs with strong geographical reach • Mobile sales for customer acquisition with promising results Rationale for • Cutting-edge credit platform focusing on SME clients • Cross-selling new
Slide 26: Millennium 2010 - Higher efficiency and tight cost management
Annual General Meeting of Bank Millennium S.A. Millennium 2010 - Higher efficiency and tight cost 3 management Financial impact Annualized Expected impact in 2009 (PLN mln) potential Strategic priorities Description • IT/Telecom: optimizing data volumes and application maintenance • Real estate/occu
Slide 27: Millennium 2010 - Enforce more conservative risk management
Annual General Meeting of Bank Millennium S.A. Millennium 2010 - Enforce more conservative risk 4 management Priorities Description Rationale Capital and • Restrict loan growth to deposits growth • Overall economic 4a liquidity slowdown, tightening • Reduce RWA while optimizing capital usage market
Slide 28: Profit distribution proposal
Annual General Meeting of Bank Millennium S.A. Macroeconomic Overview Bank Millennium 2008 Results New strategy - Millennium 2010 Profit distribution proposal 28
Slide 29: Proposal to retain entire profit in Bank's capital
Annual General Meeting of Bank Millennium S.A. Proposal to retain entire profit in Bank’s capital Considering the more difficult market environment resulting from significant slowdown of the economic growth as well as material depreciation of PLN against main foreign currencies, which in practice me
Slide 30: Thank you for your attention
Annual General Meeting of Bank Millennium S.A. THANK YOU FOR YOUR ATTENTION www.bankmillennium.pl 30