Brd Groupe Societe Generale Sa (romania) · BVB:BRD
Brd Groupe Societe Generale Sa (romania) — BRD - Groupe Société Générale — Q3 2018 Earnings Presentation
29 slides from Brd Groupe Societe Generale Sa (romania)'s earnings presentation, Nov 9, 2018
Slide 1: BRD Group Results 3rd Quarter and 9 Months 2018
BRD - GROUP R E S U LT S 3 RD Q U AR T E R AN D 9 M O N T H S 2 0 1 8 9 NOVEMBER 2018
Slide 2: Disclaimer
DISCLAIMER The consolidated and separate financial position and income statement for the period ended September 30, 2018 were examined by the Board of Directors on November 7, 2018. The financial information presented for the period ended September 30, 2018 and comparative periods has been prepared
Slide 3: Introduction
INTRODUCTION BRD
Slide 4: 9M 2018: Strong Operating Performance
9M 2018: STRONG OPERATING PERFORMANCE Growing revenues thanks to robust retail banking activities and rising RON interest rates NBI RON 2,289m +11.1% vs 9M 2017 Substantially higher net interest income, up by +15.5% y/y, on growing volumes and rising interest rates Solid increase of average outstand
Slide 5: Q3 2018: Accelerating Revenues Momentum Supporting the Bottom Line
Q3 2018: ACCELERATING REVENUES MOMENTUM SUPPORTING THE BOTTOM LINE NET BANKING INCOME(RON m) Strong revenue momentum NBI up +12.3% vs Q3 2017 on +20.0% higher net interest income Robust commercial dynamics in retail banking Retail loans +4.3% y/y* +12.3% +6.5% 810 Low cost of risk Net cost of risk w
Slide 6: Macroeconomic & Banking Environment
2 MACROECONOMIC & BANKING ENVIRONMENT
Slide 7: Economic Growth Slowing Down
ECONOMIC GROWTH SLOWING DOWN GDP GROWTH Deceleration of economic growth GDP growth slowed down in Q2 2018 (+4.2%* y/y) after the strong 6.9% growth in 2017, given a weaker contribution from private consumption component, while investment activity has yet to recover 4.8% 4.0% 4.0% 3.5% 3.1% 3.0% 2.2%
Slide 8: Household Driven Credit Growth
HOUSEHOLD DRIVEN CREDIT GROWTH ROMANIAN BANKING SYSTEM LOANS (RON bn) Robust credit growth in nominal terms Y/Y* 258 +5.3% 244 239 Continuous positive dynamic of loans to individuals, on the back of housing loans (+11.5%* y/y) 127 +1.8% 124 117 Consumer loans accelerating at +6.0%* y/y, supported by
Slide 9: Comfortable Prudential Indicators, High Profitability
COMFORTABLE PRUDENTIAL INDICATORS, HIGH PROFITABILITY ROMANIAN BANKING SYSTEM NPL RATIO Declining NPL ratio 20.7% Declining trend in NPL ratio as a result of write off operations and sale of defaulted loans portfolios, as well as positive lending dynamics NPL ratio at 5.5% at August 2018 end, compar
Slide 10: 3rd Quarter and First 9 Months 2018 BRD Group Results
3 3RD QUARTER AND FIRST 9 MONTHS 2018 BRD GROUP RESULTS
Slide 11: Increasing Adoption of Digital Banking Solutions
INCREASING ADOPTION OF DIGITAL BANKING SOLUTIONS AVERAGE INDIVIDUAL CUSTOMER More intense commercial relationships EQUIPMENT RATE Average equipment rate of individual clients up to 4.25 from 4.16 4.25 at September 2017 end 4.16 4.16 Average equipment rate of small business clients up to 3.80 from 3.
Slide 12: Retail Loans Remain the Main Growth Driver
RETAIL LOANS REMAIN THE MAIN GROWTH DRIVER Retail loans +4.3%* y/y Housing loans outstanding up by +8.3%* y/y, with increasing share of BRD specific product “La Casa Mea” NET LOANS Total consumer loan production down by -4.4% y/y to RON (outstanding amounts, RON bn) Y/Y* YTD* 3.2bn in 9M-2018 but av
Slide 13: Further Widening of the Retail Deposit Base
FURTHER WIDENING OF THE RETAIL DEPOSIT BASE Further improvement in deposit inflows from individual customers DEPOSITS (outstanding amounts, RON bn) Retail savings +6.7%* y/y with deposits in current accounts up by +24%* for individual customers Y/Y* YTD* 44.2 43.6 +1.5% -1.5% Non-retail deposits dec
Slide 14: Strong Revenue Growth
STRONG REVENUE GROWTH NET BANKING INCOME (RONm) Revenue generation remains consistent and broad-based Y/Y Q3-2018 net banking income up by +12.3% 810 +12.3% 9M-2018 net banking income up by +11.1% 721 -3.6% Other income 82 85 209 +2.8% Net fee and 203 commissions Rising net interest income thanks to
Slide 15: Disciplined Cost Management
DISCIPLINED COST MANAGEMENT OPERATING EXPENSES (RON m) Costs reflecting ongoing transformation investments and tight labor market conditions Y/Y Increasing staff costs, due to adjustment of compensation 366 +6.1% packages in a tight labor market context 345 Higher IT and consultancy costs, on strong
Slide 16: Improved Asset Quality
IMPROVED ASSET QUALITY GROSS LOANS – September 30, 2018 breakdown by segment and currency (RON bn) Loan portfolio market mix 69.1% on individuals market segment 30.9% on legal entities market segment 21.2 20.1 Consolidation of RON lending Share of RON denominated loans at 65.5% (vs 59.7% as of Septe
Slide 17: Negative Cost of Risk
NEGATIVE COST OF RISK COST OF RISK EVOLUTION (RON m) 500 2,083 Net cost of risk at -23 bps, driven by: 1,883 400 Significant net provision reversals still related to recoveries and 300 1,193 1,193 portfolio improvement. 198 800 200 137 631 NCR related to new defaults remains limited. 461 100 0 -7 -1
Slide 18: Further Increasing Operating Performance Leading to Strong Profitability
FURTHER INCREASING OPERATING PERFORMANCE LEADING TO STRONG PROFITABILITY GROSS OPERATING INCOME (RON m) Strong profitability driven by further improvement in operational performance and cost of risk write-back 1,185 +19% 9M 2018 net profit up by +28% y/y excluding the 997 positive non-recurring elem
Slide 19: Solid Capital Position
SOLID CAPITAL POSITION SOLVENCY RATIO Solid Tier 1 capital base CAR of 19.4% at September 2018 end, comfortably above regulatory requirement Regulatory own funds composed solely of tier 1 capital +84bp -23bp -73bp +86bp +12bp Impact of the decrease of the revaluation reserve for debt instruments, gi
Slide 20: Conclusions
CONCLUSIONS BRD
Slide 21: Conclusions
CONCLUSIONS Significant growth in revenues based on dynamic retail business and rising volumes of non- cash transactions Robust loan growth with retail loans as main driver Simplifying customer experience through digital innovation Very strong operating performance Healthy risk profile C
Slide 22: Q&A Session
Q&A SESSION BRD
Slide 23: Appendix
APPENDIX BRD
Slide 24: BRD Group | Key Figures
BRD GROUP | KEY FIGURES RON m Q3-2018 Q3-2017 Change 9M-2018 9M-2017 Change Net banking income 810 721 +12.3% 2,289 2,060 +11.1% Operating expenses (366) (345) +6.1% (1,104) (1,063) +3.9% Gross operating income 443 375 +18.1% 1,185 997 +18.9% Reported financial results Net cost of risk 15 2 7.6x 170
Slide 25: BRD Group | Key Figures
BRD GROUP | KEY FIGURES Loans and deposits RON bn Sep-17 Dec-17 Sep-18 vs. Sep-17 vs. Dec-17 (1) 29.4 29.2 30.0 +1.5% +2.9% Net loans including leasing (RON bn) Retail 20.7 21.0 21.7 +4.3% +3.3% Non retail 8.7 8.2 8.3 -5.1% +1.7% (1) 42.7 44.2 43.6 +1.5% -1.5% Total deposits (RON bn) Retail 26.9 27.
Slide 26: BRD | Key Figures for Bank Only
BRD | KEY FIGURES FOR BANK ONLY RON m Q3-2018 Q3-2017 Change 9M-2018 9M-2017 Change Net banking income 766 670 +14.3% 2,204 1,959 +12.5% Financial results Operating expenses (344) (324) +6.2% (1,041) (1,003) +3.8% Gross operating income 422 346 +21.9% 1,163 956 +21.6% Net cost of risk 18 7 136.8% 17
Slide 27: BRD | Stock Price Performance
BRD | STOCK PRICE PERFORMANCE Market capitalisation 4,000 EUR 2.0 bn 16.0 3,500 3,000 14.0 2,500 12.0 2,000 10.0 1,500 1,000 8.0 500 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 companies
Slide 28: 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 29: BRD Groupe Societe Generale - Investor Relations
BRD GROUPE SOCIETE GENERALE - INVESTOR RELATIONS +4 021 380 47 62 investor@brd.ro www.brd.ro
BRD - Groupe Société Générale — Q3 2018 Earnings Presentation on 6ix