Mbank Sa · GPW:MBK
Mbank Sa — BRE Bank — Q3 2013 Earnings Presentation
57 slides from Mbank Sa's earnings presentation, Oct 31, 2013
Slide 1: Results of BRE Bank Group Q3 2013
Results of BRE Bank Group Q3 2013 Continued revenue momentum Management Board of BRE Bank SA Presentation for Investors and Analysts October 31, 2013
Slide 2: Key highlights of Q3/13 at BRE Bank Group
Key highlights of Q3/13 at BRE Bank Group Improving revenues and efficiency: Stable client volumes: NII at PLN 556.4 M (+4.0% QoQ, -2.9% YoY) Customer gross loans at PLN 72.1 B (-0.6% QoQ, +0.0% YoY)* NFC at PLN 216.6 M (-2.2% QoQ, +6.1% YoY) Deposits at PLN 60.1 B (+0.7% QoQ, +5.0% YoY)*
Slide 3: Agenda
Agenda Summary of Q3/13 Analysis of Q3/13 Results Macroeconomic Update & Outlook Appendix Additional Information: Selected Financial Data Detailed Results of Business Lines Summary of 2012-2016 Strategy 3
Slide 4: Summary of Q3/13 Results in BRE Bank Group
Summary of Q3/13 Results in BRE Bank Group Key Financials in PLN M Q3/13 Q2/13 Change Q3/Q2 Q3/12 BRE Analyzer Core income 773.0 756.6 +2.2% 777.1 Total income 933.2 926.3 +0.7% 917.7 Total costs (416.8) (417.9) -0.3% (428.4) Loan Loss Provisions (173.6) (159.5) +8.9% (134.9) Profit before tax 342.8
Slide 5: Development of Loans to Clients
Summary of Q3/13 in BRE Bank Group Development of Loans to Clients Stable credit portfolio, reduction on reverse repo business Development of Gross Loans (PLN M) BRE +0.3% Analyzer -0.4% -3.3% 74,534 -2.2% QoQ YoY 71,827 2,861 72,073 69,588 69,170 3,169 4% 2,901 4% 3,366 3,017 +1.4% -8.5% 32,523 30,
Slide 6: Development of Deposits
Summary of Q3/13 in BRE Bank Group Development of Deposits Resilient retail deposit base despite further re-pricing, strong corporate inflows excluding repo transactions Development of Deposits (PLN M) BRE +5.0% Analyzer +5.0% -3.4% 62,195 +0.7% QoQ YoY 60,085 57,229 57,984 58,532 1,155 794 854 2% 6
Slide 7: Funding structure details
Summary of Q3/13 in BRE Bank Group Funding structure details A well balanced and diversified funding profile BRE Bank Group’s structure of funding BRE Bank’s ratings BRE Bank Group’s funding strategy as of September 30, 2013 Other Fitch Funding needs reduced by CHF loan book Retail repayments (c.
Slide 8: Euro Medium Term Note (EMTN) Programme
Euro Medium Term Note (EMTN) Programme BRE Bank 5Y CHF 200 M, Senior Unsecured Issuance provides a further source of long-term funding Transaction details Distribution by investor location Issuer BRE Finance France SA Guarantor BRE Bank SA Senior Unsecured Debt Liechtenstein Format out of EMTN progr
Slide 9: Business Development: Corporates & Financial Markets
Summary of Q3/13 in BRE Bank Group Business Development: Corporates & Financial Markets Corporate clients postponing investments, reduction in repo business Loans (PLN M) Deposits (PLN M) -1.7% -4.7% -7.1% -2.6% 32,523 27,937 30,727 30,211 27,351 26,636 1,876 1,737 3,763 1,937 4,595 3,550 3,686 3,71
Slide 10: Business Development: Retail Banking
Summary of Q3/13 in BRE Bank Group Business Development: Retail Banking Stable volumes and strong client acquisitions Loans (PLN M) Deposits (PLN M) +2.7% +13.7% -0.5% -3.2% 37,931 39,149 38,961 33,689 32,595 9,247 9,630 28,678 54 40 8,451 45 9,139 8,045 3,676 3,808 4,009 8,641 Non-mortgage loans Ot
Slide 11: Agenda
Agenda Summary of Q3/13 Analysis of Q3/13 Results Macroeconomic Update & Outlook Appendix Additional Information: Selected Financial Data Detailed Results of Business Lines Summary of 2012-2016 Strategy 11
Slide 12: Income of BRE Bank Group
Analysis of Q3/13 Results Income of BRE Bank Group Revenues underpinned by strong core income development BRE Bank Group’s Income (PLN M) +1.7% BRE Analyzer +0.7% QoQ YoY 917.7 926.3 933.2 5.4 24.5 28.7 42.8 822.9 829.2 36.1 16.4 99.5 3.1 51.5 102.5 86.3 -15.8% -13.3% 11.2 76.1 0.8 14.7 0.0 75.8 2.3
Slide 13: Costs of BRE Bank Group
Analysis of Q3/13 Results Costs of BRE Bank Group Strong efficiency supported by continued focus on cost discipline Overhead Costs + Depreciation & Amortisation of BRE Bank Group (PLN M) BRE -2.7% Analyzer QoQ YoY -0.3% 428.4 434.0 417.9 416.8 20.3 22.7 401.7 24.0 20.1 45.3 51.4 26.0 -16.0% -1.0% 45
Slide 14: Loan Portfolio Quality
Analysis of Q3/13 Results Loan Portfolio Quality Small increase in risk indicators, NPL ratios well below market levels BRE Bank’s NPL Ratio Value of impaired loan portfolio of BRE Bank Group (PLN M) 8.8% 8.8% 8.9% 8.7% +2.0% 8.5% +5.1% 3,756 3,632 3,641 3,645 3,832 5.7% 5.8% 5.5% 5.5% 5.4% Q3/12 Q4
Slide 15: Loan Loss Provisions
Analysis of Q3/13 Results Loan Loss Provisions Prudent risk management, cost of risk in line with 2013 guidance BRE Bank Group’s loan loss provisions (PLN M) +28.7% YtD Cost of risk of 70 bps v. 70 bps 92 98 79 after 9M 2012 70 52 55 173.6 17 159.5 +1.4% 134.9 355.6 360.7 76.7 79.4 132.6 73.9 89.0 1
Slide 16: Key Regulatory Ratios
Analysis of Q3/13 Results Key Regulatory Ratios Stronger capital base, liquidity ratios significantly surpassing regulatory requirements BRE Bank Group’s Capital Adequacy Ratio BRE Bank’s LCR and NSFR 208% 18.7% 18.9% 19.2% 18.2% 177% 172% 16.2% 5.2% 15.4% 5.7% 5.4% 5.1% 146% 5.0% 4.5% 118% 116% 111
Slide 17: Agenda
Agenda Summary of Q3/13 Analysis of Q3/13 Results Macroeconomic Update & Outlook Appendix Additional Information: Selected Financial Data Detailed Results of Business Lines Summary of 2012-2016 Strategy 17
Slide 18: Macroeconomic Update (1/2)
Macroeconomic Update (1/2) Gradual recovery without inflationary pressures. For now. GDP forecast (% YoY) Two pillars of growth: exports and consumption (% YoY) 8 14% 12% 6 4.7 4.5 4.3 4.4 4.9 3.7 4.2 3.5 3.4 3.7 10% 4 2.7 2.3 2.6 3.0 8% 1.3 1.6 2.1 2 0.7 0.5 0.8 6% 4% 0 2% -2 0% -2% -4 Q1'10 Q3'10
Slide 19: Macroeconomic Update (2/2)
Macroeconomic Update (2/2) Green shoots in bank credit; rotation of household assets in full swing Corporate loans and deposits (% YoY) Household loans and deposits (% YoY) 40% 70% 60% 30% 50% 20% 40% 10% 30% 0% 20% 10% -10% 0% -20% -10% Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12
Slide 20: 2013 Outlook – BRE Bank Group beyond Q3/13
2013 Outlook – BRE Bank Group beyond Q3/13 Implementation of the „One Bank” strategy to ensure sustainable 1 outperformance in an evolving client and regulatory environment Strong capital and ample liquidity underpinning the balance sheet 2 and supporting strategic initiatives Revenue generation to
Slide 21: Agenda
Agenda Summary of Q3/13 Analysis of Q3/13 Results Macroeconomic Update & Outlook Appendix Additional Information: Selected Financial Data Detailed Results of Business Lines Summary of 2012-2016 Strategy 21
Slide 22: Appendix
Appendix Additional Information: Page No. Detailed Results of the Business Lines & Update on Strategy Page No. Selected Financial Data & Historical Performance Consolidated Profit and Loss Account under IFRS 24 Retail Banking 39-44 Consolidated Statement of Financial Position 25 Summary of Q2/13: Fi
Slide 23: Appendix: Additional Information: Selected Financial Data
Appendix Additional Information: Selected Financial Data 23
Slide 24: Consolidated Profit and Loss Account under IFRS
Summary Historical outlook Appendix Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Business Lines Consolidated Profit and Loss Account under IFRS 2012-2016 Strategy PLN thou. Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 By quarter Net interest income 573,085 555,479 503,62
Slide 25: Consolidated Statement of Financial Position
Summary Historical outlook Appendix Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Business Lines Consolidated Statement of Financial Position 2012-2016 Strategy Assets (PLN thousand) Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Cash and balances with Central Bank 1 476 06
Slide 26: BRE Bank Group's Ratios
Summary Historical outlook Appendix Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Business Lines BRE Bank Group’s Ratios 2012-2016 Strategy Financial Ratios Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Net Interest Margin YtD 2.43% 2.39% 2.08% 2.08% 2.11% Cost to Income R
Slide 27: BRE Bank Group's historical performance (1/3)
Summary Historical outlook Appendix Profit & Loss Balance Sheet BRE Bank Group’s historical performance (1/3) Subsidiaries Business Lines Net interest income Net fee and commission income 2012-2016 Strategy (PLN M) (PLN M) NIM 2.3 2.3 2.2 2.5 2.4 2.4 2.1 +11% -1% +13% -5% 840 840 746 2,167 2,234 645
Slide 28: BRE Bank Group's historical performance (2/3)
Summary Historical outlook Appendix Profit & Loss Balance Sheet BRE Bank Group’s historical performance (2/3) Subsidiaries Business Lines Operating costs Pre-provision income 2012-2016 Strategy (PLN M) (PLN M) +2% 55.1% 54.2% 51.8% 47.7% 46.4% 44.5% 46.0% C/I ratio +1% +14% -5% 1,550 1,617 1,680 1,6
Slide 29: BRE Bank Group's historical performance (3/3)
Summary Historical outlook Appendix Profit & Loss Balance Sheet BRE Bank Group’s historical performance (3/3) Subsidiaries Business Lines Total assets Equity and CAR 2012-2016 Strategy (PLN B) (PLN M) +4% +5% 10.04% 11.50% 15.90% 14.96% 18.73% 15.44% 19.17% CAR +8% +24% 98.9 102.2 99.8 104.1 82.6 90
Slide 30: Net Interest Income & Margin
Summary Historical outlook Appendix Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Net Interest Income & Margin Business Lines 2012-2016 Strategy Interest Income Structure Interest Expense Structure (PLN M) (PLN M) 1,144.5 1,159.7 604.2 53.9 571.4 12.1 47.7
Slide 31: Fee and Commission Income
Summary Historical outlook Appendix Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Fee and Commission Income Business Lines 2012-2016 Strategy Commission Income Structure (PLN M) QoQ YoY 350.0 339.4 +3.3% +19.6% 318.4 41.2 310.3 308.9 42.5 13% 35.6 28.9 37.7
Slide 32: Trading Income
Summary Historical outlook Appendix Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Trading Income Business Lines 2012-2016 Strategy Net Trading Income Structure (PLN M) 99.5 102.5 QoQ YoY 9.1 28.0 86.3 76.1 75.8 14.6 6.8 -47.9% +60.2% 90.4 80.9 69.0 74.5 71.
Slide 33: Balance Sheet Analysis: Assets & Liabilities
Summary Historical outlook Appendix Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Balance Sheet Analysis: Assets & Liabilities Business Lines 2012-2016 Strategy Structure of Assets Structure of Liabilities (PLN B) (PLN B) 108.2 108.2 102.2 103.1 4.5 104.1 1
Slide 34: Balance Sheet Analysis: Currency Structure
Summary Historical outlook Appendix Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Balance Sheet Analysis: Currency Structure Business Lines 2012-2016 Strategy Currency Structure of Loans (net) Currency Structure of Amounts due to banks and customers1) (PLN
Slide 35: Balance Sheet Analysis: Structure of Loans and Deposits
Summary Historical outlook Appendix Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Balance Sheet Analysis: Structure of Loans and Deposits Business Lines 2012-2016 Strategy BRE Bank Group’s Loan Structure BRE Bank Group’s Deposit Structure as of September 30
Slide 36: Balance Sheet Analysis: Loan Portfolio Structure
Summary Historical outlook Appendix Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Balance Sheet Analysis: Loan Portfolio Structure Business Lines 2012-2016 Strategy BRE Bank Group’s Sector Exposure by Industry as of September 30, 2013 Households Real estate
Slide 37: Detailed Development of Core Tier 1 ratio and CAR
Summary Historical outlook Appendix Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Balance Sheet Analysis: Detailed Development of Core Tier 1 ratio and CAR Business Lines 2012-2016 Strategy BRE Bank Group’s Core Tier 1 Ratio (%) +0.26 14.02 +0.45 +0.22 +0.0
Slide 38: Results of Subsidiaries
Summary Historical outlook Appendix Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Results of Subsidiaries Business Lines 2012-2016 Strategy Profit before Tax of Consolidated Subsidiaries (PLN M) 48.6 Q3 45.7 46.1 Q1-Q2 9.1 18.7 33.4 21.3 13.0 24.5 36.6 8.8
Slide 39: Detailed Results of the Business Lines Q3/13: Retail Banking
Summary Historical outlook Appendix Profit & Loss Balance Sheet Subsidiaries Business Lines 2012-2016 Strategy Detailed Results of the Business Lines Q3/13 Retail Banking 39
Slide 40: Retail Banking: Summary of Q3/13 Financial Results
Summary Historical outlook Appendix Profit & Loss Balance Sheet BRE Bank Retail Banking Subsidiaries Summary of Q3/13: Financial Results Business Lines 2012-2016 Strategy Profit before Tax of Retail Banking Segment1) Number of Retail Outlets (by quarter, PLN M) 265 262 258 258 260 -9.1% 35 35 35 35
Slide 41: Sales of New Retail Loans
Summary Historical outlook Appendix Profit & Loss Balance Sheet BRE Bank Retail Banking Subsidiaries Sales of New Retail Loans Business Lines 2012-2016 Strategy Quarterly Sales of Mortgage Loans Quarterly Sales of Non-Mortgage Loans (PLN M) (PLN M) +5.6% +38.3% +20.0% -4.5% 583.7 972.6 917.7 928.4 4
Slide 42: Mortgage Loans: Portfolio Structure and Quality
Summary Historical outlook Appendix Profit & Loss Balance Sheet BRE Bank Retail Banking Subsidiaries Mortgage Loans: Portfolio Structure and Quality Business Lines 2012-2016 Strategy BRE Bank’s Mortgage Loan Portfolio Currency Structure of Retail Banking Mortgage Loan Portfolio (Retail Banking1) loa
Slide 43: BRE Bank Hipoteczny (BBH)
Summary Historical outlook Appendix Profit & Loss Balance Sheet BRE Bank Retail Banking Subsidiaries BRE Bank Hipoteczny (BBH) Business Lines 2012-2016 Strategy Loan Portfolio (PLN M) Profit before Tax Balance-sheet Exposure (net value) (PLN M) -3.0% -2.0% 4,128 4,108 4,160 4,087 45 4,004 -79% 47 46
Slide 44: BRE Ubezpieczenia (BRE Insurance)
Summary Historical outlook Appendix Profit & Loss Balance Sheet BRE Bank Retail Banking Subsidiaries BRE Ubezpieczenia (BRE Insurance) Business Lines 2012-2016 Strategy Bancassurance Retail Direct Insurance (Internet platform) Gross Written Premiums (PLN M) Gross Written Premiums (PLN M) +4% -56% 2,
Slide 45: Detailed Results of the Business Lines Q3/13: Corporates & Financial Markets
Summary Historical outlook Appendix Profit & Loss Balance Sheet Subsidiaries Business Lines 2012-2016 Strategy Detailed Results of the Business Lines Q3/13 Corporates & Financial Markets 45
Slide 46: Corporates and Financial Markets: Summary of Q3/13 Financial Results
Summary Historical outlook Appendix Profit & Loss Balance Sheet Corporates and Financial Markets Subsidiaries Summary of Q3/13: Financial Results Business Lines 2012-2016 Strategy Result before Tax of the Segment Corporate Branch Network (by quarter, PLN M) Offices Branches +6.5% 48 48 47 47 47 0.0%
Slide 47: Leasing and Factoring
Summary Historical outlook Appendix Profit & Loss Balance Sheet Corporates and Institutions Subsidiaries Leasing and Factoring Business Lines 2012-2016 Strategy Profit before Tax (PLN M) Leasing contracts (PLN M) +38.3% +37.8% 46.1 1,793.2 33.4 1,301.4 529.2 BRE Leasing 21.3 13.0 410.2 Q3 1,264.1 20
Slide 48: Trading and Investment Activity: Market Shares
Summary Historical outlook Appendix Profit & Loss Balance Sheet Trading and Investment Activity Subsidiaries Business Lines Market Shares 2012-2016 Strategy BRE Bank’s Market Share1) BRE Bank in the Market for Non-Treasury Debt2) in Investment Banking Services for Q3/13 (PLN M) 34,624 10.1% 26.9% 19
Slide 49: Dom Inwestycyjny BRE Banku (DI BRE)
Summary Historical outlook Appendix Profit & Loss Balance Sheet Trading and Investment Activity Subsidiaries Business Lines Dom Inwestycyjny BRE Banku (DI BRE) 2012-2016 Strategy Number of Accounts with DI BRE DI BRE Equities Trading WSE Q3/13 (thou.) (PLN M) +2% DI BRE accounts 50.9 +3% eBroker (mB
Slide 50: One Bank for Customers and Employees
Summary Historical outlook Appendix Profit & Loss Balance Sheet Subsidiaries Business Lines 2012-2016 Strategy BRE Bank Group’s 2012-2016 Strategy Summary One Bank for Customers and Employees 50
Slide 51: Vision of BRE Bank Group
Summary Historical outlook BRE Bank Group’s 2012-2016 Strategy Summary Profit & Loss Balance Sheet Subsidiaries Vision of BRE Bank Group Business Lines 2012-2016 Strategy One Bank for Customers and Employees Organic growth supported by cutting-edge technology, anchored on a healthy balance sheet str
Slide 52: Highlights of BRE Bank Group's Strategy
Summary Historical outlook BRE Bank Group’s 2012-2016 Strategy Summary Profit & Loss Balance Sheet Subsidiaries Highlights of BRE Bank Group’s Strategy Business Lines 2012-2016 Strategy Key initiatives of the Strategy Better use of Unification of branding infrastructure policy Outlets availabl
Slide 53: One brand
Summary Historical outlook BRE Bank Group’s 2012-2016 Strategy Summary Profit & Loss Balance Sheet Subsidiaries One brand Business Lines 2012-2016 Strategy The Bank will strengthen its market image under mBank brand Current situation Future benefits 3 main brands of BRE Bank Group: mBank, BRE Ba
Slide 54: One Network
Summary Historical outlook BRE Bank Group’s 2012-2016 Strategy Summary Profit & Loss Balance Sheet Subsidiaries One Network Business Lines 2012-2016 Strategy Integrated distribution network available to all clients Current situation Number of branches Future benefits PKO BP 1,177 Limited access to
Slide 55: Financial Performance Targets
Summary Historical outlook BRE Bank Group’s 2012-2016 Strategy Summary Profit & Loss Balance Sheet Subsidiaries Financial Performance Targets Business Lines 2012-2016 Strategy An efficient business platform supported by a strong balance sheet Loans to Deposits Assets Income Growth Cost/Income Ratio
Slide 56: Further enhancing our reporting standards
Further enhancing our reporting standards BRE Analyzer An innovative and convenient tool to analyse BRE Bank Group’s financial and business data Analyse, customise, export and print selected data on BRE Bank Group, covering all periods since Q1/06 in quarterly and annual series Includes FX Compreh
Slide 57: Contact details
Contact details BRE Bank’s Investor Relations at your service: Relacje.inwestorskie@brebank.pl Wojciech Chmielewski Direct dial: +48 22 829 14 34 Head of Investor Relations Fax: +48 22 829 15 19 E-mail: wojciech.chmielewski@brebank.pl Paweł Lipiński Direct dial: +48 22 829 15 33 Investor Relations O