Brd Groupe Societe Generale Sa (romania) · BVB:BRD
Brd Groupe Societe Generale Sa (romania) — BRD - Groupe Société Générale — Q1 2020 Earnings Presentation
32 slides from Brd Groupe Societe Generale Sa (romania)'s earnings presentation, May 7, 2020
Slide 1: BRD Group Results 1st quarter 2020
BRD GROUP RESULTS 1st quarter 2020 | 07.05.2020
Slide 2: Disclaimer
DISCLAIMER The consolidated and separate financial position and income statement for the period ended March 31, 2020 were examined by the Board of Directors on May 5, 2020. The financial information presented for the period ended March 31, 2020 and comparative periods has been prepared according to
Slide 3: Introduction
1 INTRODUCTION BRD GROUPE SOCIETE GENERALE
Slide 4: Resilient profitability, strong balance sheet
RESILIENT PROFITABILITY, STRONG BALANCE SHEET Strong commercial dynamics Total loan portfolio Sustained corporate lending activity +2.4% vs Mar 2019 end Leasing portfolio up +27.6% y/y Corporate loan portfolio Strong increase of deposit base, up by almost +6% y/y +4.3% vs Mar 2019 end GOI Resilient
Slide 5: Macroeconomic environment
2 MACROECONOMIC ENVIRONMENT
Slide 6: COVID-19 crisis is to put an end to a 9 year expansionary cycle
COVID-19 CRISIS IS TO PUT AN END TO A 9 YEAR EXPANSIONARY CYCLE 2019 marked the 9th year of the expansionary phase of the cycle 2019 GDP increased by +4.1%, a somewhat slower pace as compared to 2018, though still outpacing that of most EU countries. GDP GROWTH Consumer appetite with + 4.8 ppts cont
Slide 7: Rate cut and quantitative easing in place
RATE CUT AND QUANTITATIVE EASING IN PLACE Policy rate cut To support the economy in the context of unfolding COVID-19 epidemic, the central bank reduced the monetary policy rate by 50 INTEREST RATE ENVIRONMENT basis points to 2% 3.2% 3.2% 3.2% Quantitative easing 3.0% NBR announced an unprecedented
Slide 8: Romanian banking sector entering the crisis with a healthy profile
ROMANIAN BANKING SECTOR ENTERING THE CRISIS WITH A HEALTHY PROFILE ROMANIAN BANKING SYSTEM NPL AND NPL COVERAGE RATIOS Solid capital and liquidity positions 57.7% 57.7% 58.5% 60.6% Loan to deposit ratio at 71% at 2019 end (vs 122% at 2008 end) 55.6% 56.2% Average liquidity coverage ratio of 240% at
Slide 9: 1st quarter 2020 BRD Group results
3 1ST QUARTER 2020 BRD GROUP RESULTS
Slide 10: Accelerated migration to remote channels
ACCELERATED MIGRATION TO REMOTE CHANNELS Contact Center FAST ADOPTION OF DIGITAL HIGHLY REACTIVE CUSTOMER CHANNELS ADAPTED PHYSICAL SET UP INTERACTION CENTER Growing digital penetration Fast tracked Customer Interaction Fewer branches Centre capabilities to answer More specialized 624k MyBRD Mob
Slide 11: Sustained corporate financing activity
SUSTAINED CORPORATE FINANCING ACTIVITY NET LOANS (end of period amounts, RON bn) Y/Y 30.6 31.3 31.3 +2.4% Sustained corporate financing activity 8.7 8.9 9.0 +4.3% Loans to SME up by +7.6% y/y, followed by large companies advance of 2.9% y/y Dynamic performance of leasing activity with overall leasin
Slide 12: Strong collection of deposits across all segments
STRONG COLLECTION OF DEPOSITS ACROSS ALL SEGMENTS Solid retail deposit base Increasing retail deposits (+4.2% y/y) SAVINGS (end of period amounts, RON bn) Y/Y Individuals’ savings up +3.4% y/y (o/w current accounts were up by 45.9 46.9 +5.9% +30% y/y) 44.3 Corporate deposits advance driven by a sign
Slide 13: Resilient core banking revenues
RESILIENT CORE BANKING REVENUES Sustained net interest income growth Expanding loan portfolio and favorable structure shifts, supportive for net interest income dynamics, up +6.6% y/y in Q1 2020 NET BANKING INCOME (RON m) Robust volume increase loans up +2.4% y/y at Mar 2020 end Y/Y deposits up
Slide 14: Opex dynamics reflecting strict control of sundry costs and lower regulatory charges
OPEX DYNAMICS REFLECTING STRICT CONTROL OF SUNDRY COSTS AND LOWER REGULATORY CHARGES OPERATING EXPENSES (RON m) Lower OPEX benefitting from good control of sundry expenses and reduced regulatory costs Y/Y 442 425 -3.8% Staff expense increase, +4.4% in Q1 2020 vs Q1 2019, mirroring 2019 salary adjust
Slide 15: Strong asset quality
STRONG ASSET QUALITY GROSS LOANS – March 31, 2020 breakdown by segment and currency (RON bn) Loan portfolio market mix 70% on individuals market segment 30% on legal entities market segment 21.7 20.7 Consolidation of RON lending Share of RON denominated loans at 66.8% (vs 65.7% as of March 2019 end)
Slide 16: Positive cost of risk in COVID-19 context
POSITIVE COST OF RISK IN COVID-19 CONTEXT COST OF RISK EVOLUTION 570 2,083 470 1,883 Net cost of risk at 59 bps in Q1-20 (vs -5 bps in Q4-19) 370 1,193 1,193 270 COVID-19 related overlay booked in response to the unique 800 198 170 137 pandemic situation, partially offset by the effect of provision
Slide 17: Very solid capital position
VERY SOLID CAPITAL POSITION SOLVENCY RATIO Comfortable solvency ratio CAR of 22.6% at March 2020 end Regulatory own funds composed solely of Tier 1 capital +524bp -63bp -131bp -35bp Increase in own funds on a yearly basis mainly driven by the retention of the entire 2019 net profit, considering (i)
Slide 18: Current crisis context, 2020 perspectives
4 CURRENT CRISIS CONTEXT 2020 PERSPECTIVES
Slide 19: COVID-19 outbreak – an unprecedented crisis
COVID-19 OUTBREAK – AN UNPRECEDENTED CRISIS Sanitary situation and mitigation measures Pandemic confirmed to have reached Romania on February 26, with around 12,000 COVID-19 cases as of April, 30 Romanian authorities declared a state of emergency beginning with March 16, for 30 days, prolonged after
Slide 20: An extensive policy offset
AN EXTENSIVE POLICY OFFSET Rate cut and Quantitative Easing in place Key rate cut by 50bps to 2%, immediately leading to a 70 bps drop in Robor 3m Liquidity provided through repo operations Purchase of bonds on the secondary market Capital and liquidity requirements eased (banks allowed to t
Slide 21: BRD response to the crisis
BRD RESPONSE TO THE CRISIS Swift organization adaptation Prevention measures applied in all business outlets, as safety of customers and employees has been the top priority of last weeks Business continuity ensured through split of teams and extended Work From Home (50% of BRD staff) Supporting
Slide 22: 2020 Outlook
2020 OUTLOOK Scenario BRD GROUP 2020 ESTIMATES Strict lockdown lasting until mid May, followed by a considering the economic impact of COVID-19 outbreak progressive lifting of restrictions NBI drop estimated at -10%* vs 2019 GDP growth expected to contract by -6%/7% in 2020 negative interest r
Slide 23: Conclusions
.) CONCLUSIONS BRD GROUPE SOCIETE GENERALE
Slide 24: Conclusions
CONCLUSIONS Sustained commercial performance in Q1 2020, with credit growth supported by strong corporate lending activity, and dynamic collection of deposits Resilient operating result Accelerated digital penetration Highly reactive multi-channel setup to the quick challenges of the COVID-1
Slide 25: Q&A session
6 Q&A SESSION BRD GROUPE SOCIETE GENERALE
Slide 26: Appendix
APPENDIX BRD GROUP – KEY FIGURES BRD STANDALONE - KEY FIGURES STOCK PRICE PERFORMANCE FINANCIAL CALENDAR FOR 2020 GLOSSARY – CLIENT SEGMENTATION
Slide 27: BRD Group | Key figures
BRD GROUP | KEY FIGURES (1) Variations at constant exchange rate; (2) Bank only, including impact of prudential filters in Sep-17 and Dec-17; RON m Q1-2020 Q1-2019 Change Net banking income 767 784 -2.2% Operating expenses (425) (442) -3.8% Gross operating income 342 342 -0.2% Financial results Net
Slide 28: BRD | Key figures for bank only
BRD | KEY FIGURES FOR BANK ONLY (1) Variations at constant exchange rate; (2) Bank only, including impact of prudential filters in Sep-17 and Dec-17; RON m Q1-2020 Q1-2019 Change Net banking income 721 744 -3.1% Financial results Operating expenses (402) (421) -4.4% Gross operating income 319 323 -1
Slide 29: BRD | Stock price performance
BRD | STOCK PRICE PERFORMANCE Market capitalisation 4,000 EUR 1.7 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 30: Financial calendar for 2020
FINANCIAL CALENDAR FOR 2020 6th February: Preliminary 2019 financial results and annual press conference 23rd April: General Shareholders Meeting for approving the 2019 annual financial results 7th May: Presentation of the 1st quarter 2020 financial results 3rd August: Presentation of the 2nd quarte
Slide 31: 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 32: BRD Groupe Société Générale - Investor Relations
BRD GROUPE SOCIETE GENERALE - INVESTOR RELATIONS +4 021 380 47 62 | investor@brd.ro; www.brd.ro
BRD - Groupe Société Générale — Q1 2020 Earnings Presentation on 6ix