Bank Millennium Sa · GPW:MIL
Bank Millennium Sa — Investor Presentation (December 2022)
34 slides from Bank Millennium Sa's investor presentation, December 2022
Slide 1: Bank Millennium Group Institutional Presentation
BANK MILLENNIUM GROUP INSTITUTIONAL PRESENTATION December 2022 1
Slide 2: Agenda
AGENDA 1. 2. 3. 4. Macroeconomic Banking sector Bank Millennium Financial environment in Poland general overview performance in Poland and strategy 2
Slide 3: Macroeconomic environment in Poland
01 BANK’S PRESENTATION Macroeconomic environment in Poland 3
Slide 4: Macroeconomic Overview: Economy
MACROECONOMIC OVERVIEW Economy Data on real economy (% y/y) Indicators of expected economic situation (pts) In 3Q22, according to the Bank's estimates, GDP growth in Poland slowed down while the CPI inflation continued to intensify. Expectations for global economic activity, including Poland, have d
Slide 5: Macroeconomic Overview: Financial markets
MACROECONOMIC OVERVIEW Financial markets Evolution of FX rates WIBOR 3M and market expectations (%) Monetary Policy Council continued monetary tightening in 3Q22 and in Oct’22 „wait-and-see” approach has been adopted. Even as the MPC rhetoric turned more dovish the overall domestic fiscal and econom
Slide 6: Macroeconomic Overview: Monetary aggregates
MACROECONOMIC OVERVIEW Monetary aggregates Loans to households Mortgage loans Loans to companies Households’ demand for loans (PLN bn, % y/y) (PLN bn, % y/y) (PLN bn, % y/y) is declining amid high interest rates, mainly due to mortgage loans. In Jul’22 and Aug’22 the value of total loans to enterpri
Slide 7: Banking sector in Poland
02 INSTITUTIONAL PRESENTATION Banking sector in Poland 7
Slide 8: Polish Banking Sector Overview
POLISH BANKING SECTOR OVERVIEW (*) 30 fully registered banks, 498 co- Strong resilience during the pandemic crisis – operative banks (active mainly in rural only one bank was subject to resolution areas of the country) and additional 35 procedure (due to pre-pandemic issue), fall- international bank
Slide 9: Poland's Largest Banks
POLAND’S LARGEST BANKS As at 30 September 2022 (PLN bn) 438,5 Loans and advances to clients 450 420 Debt securities 390 57 360 Other financial assets 330 Other assets 300 129,4 279,6 263,4 270 240 43 213,0 46 207,6 210 59,6 8 180 48,9 42,6 35 146,4 150 40,9 19 110,2 120 235,0 31,4 12 84,1 90 16,3 72
Slide 10: Recent M&A Transactions in the Polish Banking Sector
RECENT M&A TRANSACTIONS IN THE POLISH BANKING SECTOR Upper logo: Acquirer 1) Lower logo: Acquired entity 1) 2) 2) 2007 2009 2011 2012 2013 2014 2015 2015 2017 2018 2019 2020 1) 1) (*) 1) 2) 2) 2) 3) 3) (*) Most of assets/liabilities of Idea Bank acquired as a part of resolution process at the turn o
Slide 11: Bank Millennium general overview and strategy
03 INSTITUTIONAL PRESENTATION Bank Millennium general overview and strategy 11
Slide 12: History of Bank Millennium at a Glance
HISTORY OF BANK MILLENNIUM AT A GLANCE 1989 1992 1997 1998 2003 2006 2010 2015 Bank Inicjatyw BIG S.A. is the first Merger with Bank Joint venture with BIG Bank GDAŃSKI Change of the Bank's Successful capital Increase of a Gospodarczych BIG bank listed on the Gdański (a regional Portuguese BCP to re
Slide 13: 2022-24 Strategy: Inspired by People
2022-24 STRATEGY: INSPIRED BY PEOPLE For years clients have been at the center Pillars of ’Millennium 24’ strategy: of our thinking. We talk, listen, understand and co-create our solutions together. Now, we are to leverage this approach in even more intensive way … 01 02 03 Top quality and Bank of t
Slide 14: Strategy 2024 Ambitions in Brief
STRATEGY 2024 AMBITIONS IN BRIEF Profitable growth, doubling Bank Millennium’s recurrent profit while driving scale, strong customer recognition Ambitions by 2024: We plan to continue to We also aspire to … driven by keeping … and to continue … and to boost … significantly increase number of further
Slide 15: Mortgages – Our Long-Term Customer Acquisition Product
MORTGAGES – OUR LONG-TERM CUSTOMER ACQUISITION PRODUCT Millennium Mortgage Bank (MBH) started operating performance on June 14, 2021 Rationale for establishing MBH Share of mortgage loans in total portfolio (top 9 banks) (%) 80% 3Q21 3Q22 MBH will provide opportunities for medium term sustainable 70
Slide 16: Bank Millennium Today
BANK MILLENNIUM TODAY 2.9 million (*) active retail clients, 6% average market share, of which 7-8% 2.5 million (*) online active clients in retail segment and 4% in corporate 2.2 million (*) mobile active clients business Well developed retail banking Profitability under pressure platform with 633
Slide 17: Market Shares in Main Products
MARKET SHARES IN MAIN PRODUCTS YE18 YE20 YE21 October’22 YE18 YE20 YE21 October’22 Total loans 4.6% 6.1% 6.1% 5.8% Total deposits 5.3% 5.3% 5.5% 5.6% Loans to individuals 5.6% 8.0% 8.2% 7.2% Deposits of individuals 6.2% 6.7% 6.8% 6.7% mortgages 7.0% 8.6% 8.7% 8.2% demand deposits (**) 6.9% 7.2% 7.0%
Slide 18: Leaders in Digital Innovation and Best Class Quality of Service
WE ARE LEADERS IN DIGITAL INNOVATION AND OFFER BEST CLASS QUALITY OF SERVICE TO OUR CUSTOMERS Human focused approach … and adding value to customer experience in digital and innovations drive high loyalty and recommendation (NPS1). based on: These led to our recognition as the innovation and quality
Slide 19: Solid Track Record of Delivering
SOLID TRACK RECORD OF DELIVERING Our top customers growth engine was fuelled by leading position in quality and … now complemented by competences in digital services … development of loan offer 1. In 2017 edition Bank was ranked in following categories: „Mobile Banking" – 1st place and ’Internet Ban
Slide 20: Distribution Network & Employment
BANK MILLENNIUM DISTRIBUTION NETWORK & EMPLOYMENT (as at September 30, 2022) Network of 633 branches Branches -32 799 766 726 702 678 676 665 655 646 635 633 226 224 224 225 225 224 222 215 218 220 224 573 542 502 477 453 452 443 440 428 415 409 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22
Slide 21: Relations with BCP and BM's Management Composition
RELATIONS WITH BCP AND BM’s MANAGEMENT COMPOSITION Sale of 15.4% through ABB in BCP's stake - evolution since 1998 March’15 2015-2022 50,1% ▪ BCP demonstrated in the past strong support to 2010 BCP subscribed PLN691m during the right issue 65,5% Bank Millennium in Poland; commitment in equity was sh
Slide 22: Solid Foundations Appreciated by Investors
SOLID FOUNDATIONS APPRECIATED BY INVESTORS Bank Millennium's shareholder structure (31.12.2021) Bank Millennium share performance vs. WIG Bank index 30,0% -29% Stable 50,1% -43% shareholder 5,7% 6,0% 8,2% BCP Nationale-Nederlanden Pension Fund Participation in domestic stock market indices Aviva Pen
Slide 23: ESG: Environment
ESG: ENVIRONMENT Sustainability has long been included in our business strategy. Now we plan to become climate neutral Our advanced capabilities in the … will support our leading position on the ESG & Sustainability development … climate neutrality path Strong own emissions’ Reduction of … and striv
Slide 24: ESG: Social
ESG: SOCIAL Banking in Millennium – responsible and without barriers Our strong position has been ... and our aspiration is continue to achieve ambitious goals recognised on the market … in the coming years Best Bank for CSR Customers In CEE 2017 Customer centric service focused on superb quality, f
Slide 25: ESG: Governance
ESG: GOVERNANCE Highest quality and standards Our strong position has been ... and our aspiration is continue to achieve ambitious goals recognised on the market … in the coming years +10 years of membership Ethical approach to business Regularly revised Code of Ethics and compliance assessment Sign
Slide 26: Financial performance
04 INSTITUTIONAL PRESENTATION Financial performance 26
Slide 27: Synthetic P&L Account
SYNTHETIC P&L ACCOUNT SYNTHETIC P&L ACCOUNT Reported results 1-3Q21 1-3Q22 Change Y/Y 2Q22 3Q22 Change Q/Q Net interest income 1 946 3 411 75% 1 179 1 271 8% Net commission income 616 606 -2% 206 179 -13% Other non-interest income 73 -116 -258% -48 -46 -5% Operating Income 2 635 3 902 48% 1 337 1 40
Slide 28: Balance Sheet
BALANCE SHEET 30.09.2021 30.06.2022 30.09.2022 Change y/y ASSETS Cash and balances with the Central Bank 1 978 5 810 10 132 412% Loans and advances to banks 578 1 080 1 186 105% Loans and advances to customers 77 280 79 342 78 965 2% Amounts due from reverse repo trans. 9 8 5 -52% Debt securities 21
Slide 29: Financial Highlights of 1-3Q22
FINANCIAL HIGHLIGHTS OF 1-3Q22 Growing core profitability and efficiency, stable cost of risk Fees Adjusted net profit* NII and NIM strongly up +127% y/y +75%; +176bp y/y -2% y/y Adj. ROE Adj. cost/income Cost of risk 24.6% 32.6% 44bp (*) Extraordinary items: provision for credit holidays, FX-mortga
Slide 30: Business Highlights of 1-3Q22
BUSINESS HIGHLIGHTS OF 1-3Q22 Decent dynamics of business volumes despite deceleration in retail business, corporate one showing gradual improvement PLN loans PLN mortgage loans Companies’ portfolio +6% y/y +10% y/y +7% y/y Debit cards Active digital customers Customer deposits +214k y/y 2.5mn +8% y
Slide 31: Credit Holidays
CREDIT HOLIDAYS Significant upfront impact booked in 3Q22 The Act of July 7, introduced, among Impact on BM’s results in 3Q22: Other considerations: others, a handful of measures aimed at support of PLN mortgage borrowers, ▪ PLN1,423mn upfront cost of credit ▪ application for/use of credit holidays
Slide 32: Capital Management
CAPITAL MANAGEMENT Capital ratios expected to be temporarily below minimum requirements due to the impact of upfront booking of credit holidays, but the recovery is expected in a relatively short term Upfront recognition of costs of credit holidays resulted in a negative net result for 3Q22. Without
Slide 33: Most Important Awards and Achievements of Bank Millennium in 3Q22
THE MOST IMPORTANT AWARDS AND ACHIEVEMENTS OF BANK MILLENNIUM in 3Q22 Professionalism, information security, world-class digital banking and people confirmed by independent rankings and competitions Bank Millennium is the Best Digital Bank in Contact Center employees stood on the Millenet internet b
Slide 34: Investor Relations Contact
RELACJE Z INWESTORAMI - KONTAKT Kierujący Departmentem Relacji z Inwestorami Katarzyna Stawinoga Tel: +48 22 598 1110 Dariusz Górski e-mail: katarzyna.stawinoga@bankmillennium.pl Tel: +48 514 509 925, +48 22 598 1115 e-mail: dariusz.gorski@bankmillennium.pl Marek Miśków Tel: +48 22 598 1116 e-mail:
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