Mbank Sa · GPW:MBK
Mbank Sa — BRE Bank — Q3 2011 Earnings Presentation
61 slides from Mbank Sa's earnings presentation, Nov 4, 2011
Slide 1: Results of BRE Bank Group Q1-3 2011
Results of BRE Bank Group Q1-3 2011 Superior client franchise delivering growth and profits Management Board of BRE Bank S.A. Presentation for Investors and Analysts November 4, 2011
Slide 2: Agenda
Agenda Summary of Q3/11 Analysis of Q3/11 Results Macroeconomic Update 2011 Outlook Appendix Detailed Results of Business Lines Additional Information: Selected Financial Data 2
Slide 3: Highlights of Q3/11 in BRE Bank Group
Highlights of Q3/11 in BRE Bank Group Strength in core income maintained 1 NII and NFC at PLN 767 M, up 12.8% YoY and 2.2% QoQ; 6th consecutive quarter of core income growth; Award-winning client franchise 2 Retail clients up by 46K in Q3 and 270K YoY to 3.8M, corporate clients up by 242 in Q3 and 7
Slide 4: Summary of Results, Q3/11
Summary of Results, Q3/11 Key Financials Q3/11 Q2/11 Change Q3/Q2 Q3/10 Core income1) 767.5 750.7 +2.2% 680.3 Total income2) 934.5 894.3 +4.5% 825.1 Total cost (438.4) (428.6) +2.3% (416.9) Operating profit 496.1 465.7 +6.5% 408.2 Net provisions (111.2) (58.6)3) +89.7% (128.2) Profit before tax 384.
Slide 5: Development of Loans to Clients
Summary of Q3/11 in BRE Bank Group Development of Loans to Clients Sound and well-balanced loan growth Development of Gross Loans Structure of Gross Loan Portfolio (PLN B) as of 30 September 2011 +7.2% BRE - BRE - others Individual 0.9% +3.0 +1.5 clients BRE Bank -0.0 57.2% Hipoteczny +8.6% +6.0% -0
Slide 6: Development of Deposit Base
Summary of Q3/11 in BRE Bank Group Development of Deposit Base Ample and stable liquidity – ‘real’ LtD ratio at 86% Development of Deposits Structure of Deposits (PLN B) as of 30 September 2011 BRE Bank +5.4% BRE - Hipoteczny Individual 0.4% +0.7 +0.8 +1.0 clients 51.6% Polfactor 0.2% +2.9% +4.0% +1
Slide 7: Business Development: Corporates & Markets
Summary of Q3/2011 in BRE Bank Group Business Development: Corporates & Markets Relationship-driven banking delivering further growth Clients Loans (PLN B) Deposits (PLN B) Product innovations +5.7% +11.0% +12.2% iBRE offer enhancement iBRE - internet platform for corporate +1.8% +6.0% +4.0% banking
Slide 8: Business Development: Retail Banking
Summary of Q3/2011 in BRE Bank Group Business Development: Retail Banking Expanding client base and cross-selling Clients (thou.) Loans (PLN B) Deposits (PLN B) Service quality and innovations Newsweek’s Friendly Bank Award +7.6% +20.3% +4.0% Winners Named best internet and best traditional retail b
Slide 9: Agenda
Agenda Summary of Q3/11 Analysis of Q3/11 Results Macroeconomic Update 2011 Outlook Appendix Detailed Results of Business Lines Additional Information: Selected Financial Data 9
Slide 10: Income of BRE Bank Group
Analysis of Results, Q3/11 Income of BRE Bank Group High-quality income generation BRE Bank Group Income QoQ & YoY Income structure by Business Line in Q3/11 (PLN M) Trading and +16.7% Corporates Investment +7.6% and Activity; Institutions; +1.0% +5.3% x4.7 +5.2% -/+ -38.5% PLN 121.4 M; QoQ1) QoQ2)
Slide 11: Costs of BRE Bank Group
Analysis of Results, Q3/11 Costs of BRE Bank Group Strict cost management maintained Overhead Costs + Depreciation of BRE Bank Group QoQ & YoY Cost Structure by Business Line in Q3/11 (PLN M) +5.2% +2.3% Trading and Retail Investment Banking; +2.2% +5.5% -1.8% -6.4% Activity; QoQ QoQ QoQ QoQ PLN 203
Slide 12: Structure of Loan Loss Provisions
Analysis of Results, Q3/11 Structure of Loan Loss Provisions Stable risk parameters in both corporate and retail banking BRE Bank Group’s Loan Loss Provisions (PLN M) Trends in Q3/11: -20.8% - Stable financial standing of corporate -34.3% -3.6% and retail clients QoQ QoQ - Provisioning in Q2/11 impa
Slide 13: Agenda
Agenda Summary of Q3/11 Analysis of Q3/11 Results Macroeconomic Update 2011 Outlook Appendix Detailed Results of Business Lines Additional Information: Selected Financial Data 13
Slide 14: Macroeconomic Update (1/2)
Macroeconomic Update (1/2) Lower growth on the horizon (but still faster than in 2008-2009) Sources of lower growth: slowdown in the euro zone, reduced At least moderate growth of private investments possible owing private consumption, lower growth of public investments. to substantial obsolescence
Slide 15: Macroeconomic Update (2/2)
Macroeconomic Update (2/2) Monetary aggregates extending positive trends Strong rebound of corporate loans along with renewed growth of Decelerating household credit growth. Strong rise of deposits corporate deposits. reflects a rise in savings rate and outflow from riskier investments. Corporate lo
Slide 16: Agenda
Agenda Summary of Q3/11 Analysis of Q3/11 Results Macroeconomic Update 2011 Outlook Appendix Detailed Results of Business Lines Additional Information: Selected Financial Data 16
Slide 17: BRE Bank Group beyond Q3/11
BRE Bank Group beyond Q3/11 Resilient business model Strong capital Capital adequacy ratio and Core Tier 1 ratio at 15.76% and 10.15% respectively adequacy and Retained earnings creating significant new capital; 114 bps for 2010 earnings Solid capital base to support business growth and absorb addit
Slide 18: 2011 Outlook – BRE Bank Group beyond Q3/11
2011 Outlook – BRE Bank Group beyond Q3/11 1 Continued implementation of 2010-2012 strategy 2 Core revenue growth as key driver of profitability improvement Resilient performance despite uncertain market environment; 3 long-term performance dependant on broader European policy actions Strong capital
Slide 19: Agenda
Agenda Summary of Q3/11 Analysis of Q3/11 Results Macroeconomic Update 2011 Outlook Appendix Detailed Results of Business Lines Additional Information: Selected Financial Data 19
Slide 20: Appendix: Additional Information
Appendix Additional Information: Page No. Detailed Results of the Business Lines Page No. Selected Financial Data & Business Environment BRE Bank Retail Banking 21-30 BRE Bank Group’s historical performance 43-45 Summary of Q3/11 22 P&L acc. to IFRS 46 Customer Acquisition & Volume Trends 23-24 Prof
Slide 21: Detailed Results of the Business Lines Q3/11: Retail Banking
Appendix Detailed Results of the Business Lines Q3/11 Retail Banking 21
Slide 22: BRE Bank Retail Banking: Summary of Q3/11 Financial Results
Appendix BRE Bank Retail Banking Summary of Q3/11: Financial Results Profit before Tax of the Segment (by quarter, PLN M) 69.3 57.5 70.9 29.8 68.2 86.7 95.3 -8.7 74.0 61.5 72.7 8.0 108.8 81.5 151.0 114.3 186.3 317.1 235.5 90.31) 234.3 238.6 192.9 163.2 108.2 114.6 124.3 125.2 69.3 70.9 84.2 98.5 89.
Slide 23: Retail Banking (Poland): Customer Acquisition and Volume Trends
Appendix BRE Bank Retail Banking (Poland) Customer Acquisition and Volume Trends Data as of 30.09.2011 End of 06/11 Change End of 09/11 (M) 3.29 M clients +0.9% 3.32 M 0.4 0.6 4.2 4.6 M accounts +0.7 % 4.6 M 2.7 Customers Accounts 19.3 B deposits (PLN) +2.1% 19.7 B (PLN B) 0.7 20.0 32.5 B loans (PLN
Slide 24: Retail Banking foreign operations (CZ/SK)
Appendix BRE Bank Retail Banking foreign operations (CZ/SK) Customer Acquisition and Volume Trends Data as of 30.09.2011 End of 06/11 Change End of 09/11 (thou.) 256 503.5 thou. customers +2.4% 515.4 thou. 138 729 378 965.5 thou. accounts +2.0% 984.7 thou. Customers Accounts (EUR M) 916.2 M deposits
Slide 25: Acquisition of Microenterprises
Appendix BRE Bank Retail Banking Acquisition of Microenterprises1) 404 thousand microenterprises serviced by BRE Bank Retail Banking Number of serviced microenterprises Volume of loans granted to microenterprises (PLN M) and number of microenterprises (thou.) up by 5.2 thousand in Q3/11 PLN 3,202.6
Slide 26: Deposits & Loans: Market Shares
Appendix BRE Bank Retail Banking Deposits & Loans: Market Shares Household Deposits1) Household Loans1) (PLN B) (PLN B) 09/11: 09/11: 4.6% 6.7% 40 8% 40 8% 35 7% 35 6.7% 6.7% 7% 6.4% 6.6% 6.5% 6.5% 7.0% 6.5% 6.5% 30 6% 30 6.3% 6.4% 6% 5.5% 5.2% 5.9% 5.1% 5.2% 5.0% 5.0% 5.0% 25 5.3% 4.8% 4.6% 5% 25 5
Slide 27: Mortgage Loans: Portfolio Structure and Quality
Appendix BRE Bank Retail Banking Mortgage Loans: Portfolio Structure and Quality BRE Bank’s Mortgage Loan Portfolio Currency Structure of Retail Banking Mortgage Loan Portfolio (Retail Banking1) loans to individuals) (Household Loans) at 30.09.2011 in Poland in Poland, Czech Republic & Slovakia Bala
Slide 28: Distribution Network
Appendix BRE Bank Retail Banking Distribution Network Aspiro Distribution Network MultiBank Branches (in Poland) (in Poland) 103 161 142 134 130 122 115 111 106 100 109 131 134 134 133 133 133 134 134 134 77 52 58 59 54 46 61 61 61 62 62 62 42 33 26 21 44 18 13 27 65 65 65 65 65 65 63 62 61 68 79 76
Slide 29: BRE Ubezpieczenia (BRE Insurance)
Appendix BRE Bank Retail Banking BRE Ubezpieczenia (BRE Insurance) Bancassurance Retail Direct Insurance (Internet platform) Co-operation with BRE Leasing Gross Written Premiums (PLN M) Gross Written Premiums (PLN M) Gross Written Premiums (PLN M) +112% +62% +16% 920.8 101.1 89.1 76.5 434.9 62.4 Q3/
Slide 30: Clients & volumes
Appendix BRE Bank Retail Banking (Poland) Clients & volumes Clients Deposits (thou.) (PLN B) +1.0% +2.2% 4 4 4 5 5 5 6 5 600 603 592 592 595 2.3 2.1 2.0 1.8 1.7 1.6 1.6 7 588 603 2.1 570 5.1 493 2.5 5.7 5.5 5.2 5.1 5.0 4.7 5.2 4.4 2,511 2,581 2,644 2,688 2,719 2,296 2,371 2,436 2,035 12.7 13.8 14.0
Slide 31: Detailed Results of the Business Lines Q3/11: Corporates & Financial Markets
Appendix Detailed Results of the Business Lines Q3/11 Corporates & Financial Markets 31
Slide 32: Corporates and Financial Markets: Summary of Q3/11 Financial Results
Appendix Corporates and Financial Markets Summary of Q3/11: Financial Results Result before Tax of the Segment Structure of the Result before Tax of the Segment in Q3/11 (by quarter, PLN M) (PLN M) 20.0 51.6 73.0 321.0 12.4 137.7 100.2 220.7 Vectra 167.6 160.4 142.5 137.2 128.2 5.2 117.2 86.6 81.1 9
Slide 33: Corporates and Institutions: Customer Acquisition and Volume Trends
Appendix Corporates and Institutions Customer Acquisition and Volume Trends End of 06/11 Change End of 09/11 Corporate Loans (PLN B) 13,636 corporate clients +242 13,878 10.2 9.8 15.6 24.3 B corporate loans (PLN) +6.0% 25.8 B 14.5 thereof: 06/11. 09/11. 14.5 B loans for enterprises +7.4% 15.6B (PLN)
Slide 34: Corporates and Institutions: Loans & Deposits Market Share
Appendix Corporates and Institutions Loans & Deposits: Market Share1) BRE Bank’s Market Share in Corporate Loans and Deposits 01/07 Corporate1) Deposit Volume – 09/11 (BRE Bank only, PLN B) 17.3 16.8 16.1 15.4 14.9 14.6 14.6 14.4 14.2 13.7 14.0 13.3 13.3 13.1 12.9 12.7 12.5 12.2 8.9% 6.3% 06/07 09/0
Slide 35: Client Base and development of Loans and Deposits
Appendix Corporates and Institutions Client Base and development of Loans and Deposits Corporate Clients’ Loan Volume Corporate Clients: (BRE Bank, PLN B) Number and Structure 19.6 19.6 21.4 19.5 12,836 12,783 13,026 13,126 13,271 13,423 13,636 13,878 1,145 1,153 16.3 15.6 15.9 15.9 1,062 1,083 1,10
Slide 36: Cash Management
Appendix Corporates and Institutions Cash Management Net Income on Cash Management Number of Clients Using Cash products Consolidation Services +11.9% +10.6% 561 628 Q3/10 Q3/11 09/10 09/11 Direct Debit Identification of Trade Payments (thou. of transactions) (M of transactions) +26.1% +12.0% 895 71
Slide 37: Products for local governments and Structured Finance
Appendix Corporates and Institutions Products for local governments and Structured and Mezzanine Finance products Volume of transactions with local governments Volume of Structured and Mezzanine Finance Volume of transactions with local governments Volume of Structured and Mezzanine Finance increase
Slide 38: Leasing and Factoring
Appendix Corporates and Institutions Leasing and Factoring Profit before Tax (PLN M) Polfactor (Poland) PLN 4.3 M pre-tax profit in Q3/11 (+0.7% QoQ) driven by increased sales and reduced operating costs Sales at PLN 1.6 B in Q3/11 (+21.4% QoQ); 1.2 Ranked 5th in the Polish Factoring Association Fac
Slide 39: Trading and Investment Activity: Market Shares
Appendix Trading and Investment Activity Market Shares BRE Bank’s Market Share1) BRE Bank in the Market for Non-Treasury Debt2) in Investment Banking Services for 9m/11 (PLN M) 7.1% 22,233 17.8% 20,401 14,482 3,675 2,788 2,782 Treasury IRS/FRA Bills and Bonds Short-term Debt Corporate Debt Mid-term
Slide 40: BRE Bank Hipoteczny (BBH)
Appendix Trading and Investment Activity BRE Bank Hipoteczny (BBH) Loan Portfolio (PLN M) Profit before Tax Balance-sheet Exposure (net value) (PLN M) 4,527 4,427 4,275 4,107 3,889 3,925 3,787 3,769 3,800 3,831 4,010 -4.0% 74 68 61 59 56 58 54 52 52 726 723 53 51 721 699 691 672 624 636 662 640 629
Slide 41: Dom Inwestycyjny BRE Banku (DI BRE)
Appendix Trading and Investment Activity Dom Inwestycyjny BRE Banku (DI BRE) Number of Accounts with DI BRE Profit before Tax Q3/11 (thou.) (PLN M) DI BRE accounts 55.7 +3.0% eBroker (mBank) 203.8 Brokerage Service (MultiBank) 35.8 TOTAL 295.3 DI BRE Market Share in Q3/11, by volume1) 9.8 10.1 Equit
Slide 42: Additional Information: Selected Financial Data
Appendix Additional Information: Selected Financial Data 42
Slide 43: BRE Bank Group's historical performance (1/3)
Appendix BRE Bank Group’s historical performance (1/3) Net interest income Fee and commission income (PLN M) (PLN M) 2.1 2.3 2.3 2.3 2.2 2.1 2.5 2% R : +1 CA G 0% R : +2 CA G % 1,811.0 % 745.9 +10 1,392.5 1,658.2 +14 564.3 551.5 594.7 1,027.8 416.4 724.2 219.3 481.0 548.2 199.2 2006 2007 2008 2009 2
Slide 44: BRE Bank Group's historical performance (2/3)
Appendix BRE Bank Group’s historical performance (2/3) Operating costs Pre-provision income (PLN M) (PLN M) 63.7% 55.5% 55.1% 54.2% 51.8% 51.0% 48.0% 9% 7% R: + R : +2 CA G CA G 1,507.3 1,306.5 % 1,550.1 1,544.8 1,617.3 +5% 1,136.3 +24 1,279.6 922.4 1,044.4 580.6 496.1 416.9 438.4 408.2 2006 2007 20
Slide 45: BRE Bank Group's historical performance (3/3)
Appendix BRE Bank Group’s historical performance(3/3) Total assets Total gross loans1) (PLN B) (PLN B) 23.9 34.4 53.0 54.4 61.8 57.0 66.8 % 6% +12 + 17% R: 1 21% CA G R: + 2.7 CA G 0.8 2.0 1.3 2.1 28.7 26.3 23.7 1.0 21.5 22.5 90.0 94.4 82.6 81.0 84.4 7.4 9.6 0.8 10.6 5.2 6.4 8.1 56.0 6.7 3.3 42.3 2.
Slide 46: Consolidated Profit and Loss Account under IFRS
Appendix Additional Information: Selected Financial Data Consolidated Profit and Loss Account under IFRS PLN thou. Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 By quarter Net interest income 481,048 503,125 506,524 542,486 548,179 Net commission income 199,211 200,366 207,388 208,208 219,297 Dividend income 5,222
Slide 47: Profitability of the Business Segments
Appendix Summary of Q3/2011 in BRE Bank Group - Profitability of the Business Segments Quarterly Result before Tax by Business Segment (PLN M) BRE Bank Group Retail Banking Corporates & Financial Markets +37.5% +55.9% +18.4% -5.4% -25.7% +73.5% 407.0 384.9 317.1 160.4 279.9 235.5 135.4 151.0 92.4 Q3
Slide 48: Results of Subsidiaries
Appendix Additional Information: Selected Financial Data Results of Subsidiaries Profit before Tax of Consolidated Subsidiaries (PLN M) 26.7 Q3/2011 profit before tax of 14.9 16.2 14.3 consolidated 9.8 10.2 10.0 9.6 8.7 9.9 7.4 subsidiaries at 4.9 4.6 4.3 3.1 2.0 2.5 2.0 2.0 PLN 97.8 M 0.3 v. PLN 65
Slide 49: Net Interest Income & Margin
Appendix Additional Information: Selected Financial Data Net Interest Income & Margin Interest Income Structure Net Interest Income, Q3/11 by Business Lines (PLN M) (PLN M) 863.5 876.7 891.5 937.5 990.3 +1.0% 1.8 2.2 6.8 21.7 59.9 -3.3 1.7 1.3 23.2 7.7 15.1 20.2 162.0 733.4 542.5 548.2 611.3 628.7 6
Slide 50: Commission Income
Appendix Additional Information: Selected Financial Data Commission Income Commission Income Structure Net Commission Income, Q3/11 by Business Lines (PLN M) (PLN M) 302.6 314.8 306.7 330.0 326.7 +5.3% 41.1 39.5 35.4 40.5 41.4 36.3 50.5 46.6 43.0 36.3 23.5 7.7 50.7 49.1 48.8 52.5 46.0 31.5 31.8 31.5
Slide 51: Trading Income
Appendix Additional Information: Selected Financial Data Trading Income Contributors of Net Trading Income FX Result Contributors in Q3/11 (PLN M) (PLN M) 88.2 104.3 95.6 105.8 111.4 37.0 37.3 32.0 40.5 32.7 19.9 19.3 40.9 13.7 3.3 31.6 9.9 11.8 7.1 21.7 23.1 16.9 11.8 2.6 4.7 0.8 0.7 1.6 1.4 4.5 11
Slide 52: Administrative Expenses Structure
Appendix Additional Information: Selected Financial Data Administrative Expenses Structure Structure of Administrative Expenses incl. Depreciation C/I Ratio of BRE Bank Group (PLN M) (%, as at the end of period) 416.9 454.6 408.4 428.7 438.4 10.3 22.5 15.8 59.7 24.1 22.8 59.8 58.7 60.9 58.6 165.3 14
Slide 53: Loans and Deposits
Appendix Additional Information: Selected Financial Data Loans and Deposits Loans (PLN B, net) +18.1% BRE Bank1) Market1) 59.4 61.3 1.22) 1.22) 59.4 60.1 64.4 QoQ +7.2% +5.6% 54.6 58.2 +8.8% +0.0% +3.2% +7.2%3) YoY +17.2% +14.0% 09/10 12/10 03/11 06/11 09/11 Deposits (PLN B) +10.0% BRE Bank Market 4
Slide 54: Loan to Deposit Ratio
Appendix Additional Information: Selected Financial Data Loan to Deposit Ratio LtD Ratio in BRE Bank Group The ratio of loans to deposits stood at 131.6% in Q3/11 131.3 131.6 However, funding policy for FX risk mitigation is 122.6 86.2 86.3 implemented 78.4 BRE mid-term loans in CHF fund CHF-denomin
Slide 55: Balance Sheet Analysis – Currency Structure
Appendix Additional Information: Selected Financial Data Balance Sheet Analysis – Currency Structure Currency Structure of Loans Currency Structure of Amounts due to banks and customers1) (PLN B) (PLN B) 54.6 59.4 59.4 61.3 64.4 72.8 79.2 78.0 76.7 81.5 1.9 3.3 1.9 2.0 3.2 3.2 1.8 1.8 1.9 1.7 1.9 1.
Slide 56: Balance Sheet Analysis - Assets
Appendix Additional Information: Selected Financial Data Balance Sheet Analysis - Assets Structure of Assets Loans and Advances to Customers1) (PLN B) Portfolio by Customer Category (PLN B) 84.4 90.0 89.0 88.7 94.4 56.4 61.2 61.2 62.8 66.2 6.6 2.1 1.2 1.2 2.0 4.7 2.9 1.9 1.9 3.7 1.8 3.8 4.3 2.6 1.2
Slide 57: Balance Sheet Analysis - Liabilities
Appendix Additional Information: Selected Financial Data Balance Sheet Analysis - Liabilities Structure of Liabilities Structure of Deposits (PLN B) (PLN B) 44.0 47.1 46.6 46.7 49.0 84.4 90.0 89.0 88.7 94.4 1.6 0.8 0.8 7.0 0.9 1.0 0.6 5.5 5.2 0.4 6.1 7.8 5.5 7.1 7.2 7.6 1.5 6.9 1.5 1.5 1.4 1.5 21.1
Slide 58: Funding - Maturity of Long- and Midterm FX Loans
Appendix Additional Information: Selected Financial Data Funding - Maturity of Long- and Midterm FX Loans Significant improvement of funding profile achieved Maturity of Long- and Mid-term FX Loans by the end of 2012 (PLN B) Since 2010 mid-term loans in the amount of CHF 3.0 B primarily maturing in
Slide 59: BRE Bank Group's Capital Adequacy Ratio (CAR) in Q3/11
Appendix Additional Information: Selected Financial Data BRE Bank Group’s Capital Adequacy Ratio (CAR) in Q3/11 CAR at solid level of 15.76%; Core Tier 1 Ratio at 10.15% in 09/11 Relation between Capital Adequacy Ratio (CAR) Change of CAR under Basel II and Risk Weighted Assets (RWA) 70 18% 16.08% 1
Slide 60: Quality of BRE Bank Group's Loan Portfolio
Appendix Additional Information: Selected Financial Data Quality of BRE Bank Group’s Loan Portfolio Quality of the Loan Portfolio of BRE Bank Group Impairment losses on loans and advances (consolidated data, PLN M) -1,097.1 -634.8 2.3% 2.2% 3.4% 4.7% 5.3% 6.0% 5.3% 5.6% 5.0% 5.3% -59 -128 -126 -114
Slide 61: Contact
Contact BRE Bank’s Investor Relations Officers at your service: 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 Joanna Filipkowska Direct dial: +48 22 829 04 53 Deputy Head of Investor Relations Fax: +48 22 8