Slide 1: Results of BRE Bank Group Q3 2012
Results of BRE Bank Group Q3 2012 Solid performance, business strength continues Management Board of BRE Bank SA Presentation for Investors and Analysts October 30, 2012
Slide 2: Agenda
Agenda Summary of Q3/12 Analysis of Q3/12 Results Macroeconomic Update & Outlook Appendix Additional Information: Selected Financial Data Detailed Results of Business Lines Summary of 2012-2016 Strategy 2
Slide 3: Highlights of Q3/12 at BRE Bank Group
Highlights of Q3/12 at BRE Bank Group Record high core income levels maintained 1 NII and NFC at PLN 777 M, down 0.9% QoQ and up 0.9% YoY Total income at PLN 918 M Solid efficiency, on track to keep annual costs flat 2 C/I at 44.5% in Q3/12 vs. 43.5% in H1/12 and 47.3% in Q3/11 Total costs u
Slide 4: Summary of Results, Q3/12
Summary of Results, Q3/12 Key Financials in PLN M Q3/12 Q2/12 Change Q3/Q2 Q3/11 BRE Analyzer Core income1) 777.1 784.0 -0.9% 769.9 Total income2) 917.7 921.2 -0.4% 923.5 Total costs (428.4) (406.8) +5.3% (427.5) Loan Loss Provisions (134.9) (109.0) +23.8% (111.2) Profit before tax 354.4 405.4 -12.6
Slide 5: Development of Loans to Clients
Summary of Q3/12 in BRE Bank Group Development of Loans to Clients Sound lending growth maintained Development of Gross Loans (PLN M) BRE Analyzer +7.5% +2.0% QoQ YoY 70,240 70,436 71,827 66,807 67,687 3,271 3,169 3,661 2,751 3,386 -3.1% +15.2% 27,890 28,374 30,727 25,487 26,766 +8.3% +20.6% +8.5% +
Slide 6: Development of Deposits
Summary of Q3/12 in BRE Bank Group Development of Deposits Strong client inflows in both retail and corporate segments Development of Deposits (PLN M) BRE Analyzer +16.9% +9.7% QoQ YoY 57,229 54,244 614 528 52,190 48,953 49,705 578 1,512 469 +6.2% -59.4% 27,937 27,015 24,633 21,259 21,821 +13.4% +28
Slide 7: BRE Bank funding structure details
BRE Bank funding structure details Key funding data Well improved loans/deposits ratio and further funding diversification BRE Bank Group’s structure of funding, BRE Bank Group’s funding strategy as of September 30, 2012 Other Subordinated Actual funding needs reduced by CHF loan book liabilities
Slide 8: Euro Medium Term Note (EMTN) Programme
Euro Medium Term Note (EMTN) Programme BRE Bank 3Y Inaugural Euro 500 M, Senior Unsecured Issuance provides an additional source of long-term funding Allocation by geography Allocation by investor type Others Others Germany Poland 4% Retail 36% Italy Pension 5% 2% Investment 3% 2% Funds 5% Funds 53%
Slide 9: Business Development: Corporates & Financial Markets
Summary of Q3/12 in BRE Bank Group Business Development: Corporates & Financial Markets High growth of both corporate loans and deposits Loans (PLN M) Deposits (PLN M) +20.6% +28.0% +8.3% +13.4% 30,727 27,937 28,374 25,487 1,620 24,633 3,946 1,698 3,686 Other 21,821 1,222 3,714 3,036 2,893 3,460 4,0
Slide 10: Business Development: Retail Banking
Summary of Q3/12 in BRE Bank Group Business Development: Retail Banking Trust of 4 million retail clients Loans (PLN M) Deposits (PLN M) -1.7% +11.9% -2.2% +6.3% 38,569 38,791 37,931 26,979 28,678 7,968 8,246 8,451 25,620 45 43 35 2,786 3,480 3,676 6,485 8,641 8,815 27,815 Non-mortgage loans Other 2
Slide 11: Award winning offering enhanced further
Award winning offering enhanced further Product innovations & Awards Appreciated by customers and external experts for continuous innovations adding value to retail and corporate banking offering Corporate banking Retail banking iBRE News Platform – a new source World MasterCard Miles & More of info
Slide 12: Agenda
Agenda Summary of Q3/12 Analysis of Q3/12 Results Macroeconomic Update & Outlook Appendix Additional Information: Selected Financial Data Detailed Results of Business Lines Summary of 2012-2016 Strategy 12
Slide 13: Income of BRE Bank Group
Analysis of Q3/12 Results Income of BRE Bank Group Solid recurrent revenues with record high Net Interest Income BRE Bank Group Income (PLN M) BRE -0.6% Analyzer -0.4% QoQ YoY 923.5 916.3 921.2 917.7 27.2 891.3 20.0 41.0 30.8 5.4 24.5 41.4 16.0 20.5 94.0 83.3 99.5 +19.4% +5.9% 76.5 97.7 12.4 0.0 2.6
Slide 14: Costs of BRE Bank Group
Analysis of Q3/12 Results Costs of BRE Bank Group Strong efficiency amid increased investments Overhead Costs + Depreciation of BRE Bank Group (PLN M) BRE Analyzer +0.2% QoQ YoY +5.3% 427.5 435.5 428.4 22.4 18.3 406.8 20.3 -18.3% -9.5% 392.1 60.2 24.8 45.3 48.9 25.0 50.6 48.3 150.5 144.0 150.3 -10.5
Slide 15: Loan Portfolio Quality
Analysis of Q3/12 Results Loan Portfolio Quality Risk indicators reflecting a gradual deceleration in the economy BRE Bank’s NPL Ratio Value of impaired loan portfolio of BRE Bank Group (%) (PLN M) 8.8% +5.7% 8.4% 8.4% 8.6% 8.2% +9.0% 3,554 3,756 3,287 3,402 3,445 230 5.7% 198 4.9% 4.9% 5.2% 5.1% *
Slide 16: Loan Loss Provisions
Analysis of Q3/12 Results Loan Loss Provisions Prudent approach in risk management, conservative provisioning in the corporate segment BRE Bank Group’s loan loss provisions (PLN M) 71 79 67 65 54 QoQ YoY +21.3% 134.9 111.2 111.8 109.0 89.5 75.8 +53.7% +46.7% 51.6 53.6 49.3 27.6 -0.9% -0.8% 59.6 61.9
Slide 17: Loan Portfolio Structure
Analysis of Q3/12 Results Loan Portfolio Structure Well diversified loan portfolio with granular structure BRE Bank Group’s Sector Exposure by Industry, as of September 30, 2012 (%) Households Real estate management 23.3% Public administration Construction industry Liquid fuels and natural gas 1.2%
Slide 18: Key Regulatory Ratios
Analysis of Q3/12 Results Key Regulatory Ratios Higher level of CAR and Core Tier 1 reflecting prudent capital standards BRE Bank Group’s Capital Adequacy Ratio BRE Bank’s LCR and NSFR 16.9% 108% 111% 15.8% 103% 106% 15.4% 15.0% 14.8% 5.3% Basel 3 requirement ≥100% 5.6% 4.5% 5.4% 4.7% 11.6% 10.9% 10
Slide 19: Detailed Development of Core Tier 1 ratio and CAR
Analysis of Q3/12 Results Detailed Development of Core Tier 1 ratio and CAR BRE Bank Group’s Core Tier 1 Ratio (%) 11.62 -0.38 -0.17 +0.88 -0.22 -0.92 10.92 -0.05 0.21 10.10 -0.06 Q1/12 Business FX impact Higher FX ML Other Q2’12 Business FX impact H1’12 net Other Q3/12 development on RWA risk weigh
Slide 20: Agenda
Agenda Summary of Q3/12 Analysis of Q3/12 Results Macroeconomic Update & Outlook Appendix Additional Information: Selected Financial Data Detailed Results of Business Lines Summary of 2012-2016 Strategy 20
Slide 21: Macroeconomic Update (1/2)
Macroeconomic Update (1/2) Deeper slowdown or even recession risk Contribution to GDP growth (% YoY), forecasts Consumption and real wages (% YoY) 10 8 16 8 6.2 6.8 7 5.1 12 6 6 3.6 3.9 4.3 4 2.2 5 8 1.6 4 2 4 3 0 2 -2 0 1 -4 0 -4 2005 2006 2007 2008 2009 2010 2011 2012f Q1'05 Q4'05 Q3'06 Q2'07 Q1'0
Slide 22: Macroeconomic Update (2/2)
Macroeconomic Update (2/2) Monetary aggregates reflecting slowdown in the real economy Corporate loans and deposits (% YoY) Household loans and deposits (% YoY) 40% 70% 30% 60% 50% 20% 40% 10% 30% 0% 20% -10% 10% -20% 0% Jan-08 Aug-08 Mar-09 Oct-09 May-10 Dec-10 Jul-11 Feb-12 Sep-12 Jan-08 Aug-08 Ma
Slide 23: 2012 Outlook – BRE Bank Group beyond Q3/12
2012 Outlook – BRE Bank Group beyond Q3/12 Implementation of the newly adopted strategy to ensure 1 outperformance in an evolving client and regulatory environment 2 Business resilience despite uncertain market environment 3 Strong capital and ample liquidity underpinning the balance sheet 23
Slide 24: Agenda
Agenda Summary of Q3/12 Analysis of Q3/12 Results Macroeconomic Update & Outlook Appendix Additional Information: Selected Financial Data Detailed Results of Business Lines Summary of 2012-2016 Strategy 24
Slide 25: 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 27 Retail Banking 40-44 Consolidated Statement of Financial Position 28 Summary of Q2/12: Fi
Slide 26: Appendix: Additional Information: Selected Financial Data
Appendix Additional Information: Selected Financial Data 26
Slide 27: Consolidated Profit and Loss Account under IFRS
Summary Appendix Historical outlook Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Consolidated Profit and Loss Account under IFRS Business Lines 2012-2016 Strategy PLN thou. Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 By quarter Net interest income 550,622 569,644 539,30
Slide 28: Consolidated Statement of Financial Position
Summary Appendix Historical outlook Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Consolidated Statement of Financial Position Business Lines 2012-2016 Strategy Assets (PLN thousand) Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Cash and balances with Central Bank 4 183 79
Slide 29: BRE Bank Group’s Ratios
Summary Appendix Historical outlook Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries BRE Bank Group’s Ratios Business Lines 2012-2016 Strategy Financial Ratios Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Net Interest Margin YtD 2.5% 2.5% 2.4% 2.4% 2.4% Cost to Income Ratio
Slide 30: BRE Bank Group’s historical performance (1/3)
Summary Appendix Historical outlook 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 2.1 2.3 2.3 2.3 2.2 2.5 2.4 2.4 +15% +25% 840.0 745.9 2 167.9 -6% 1 811.0
Slide 31: BRE Bank Group’s historical performance (2/3)
Summary Appendix Historical outlook 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) 63.7% 55.5% 55.1% 54.2% 51.8% 47.7% 43.5% 44.5% C/I ratio +10% +26% 1 617.3 1 680.3 1 550.
Slide 32: BRE Bank Group’s historical performance (3/3)
Summary Appendix Historical outlook 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) +5% 10.39% 10.16% 10.04% 11.50% 15.90% 14.96% 14.84% 15.44% CAR +19% +4% +25% 98.9 95.0 99.8 90.0 8
Slide 33: Net Interest Income & Margin
Summary Appendix Historical outlook 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) 1,144.5 571.4 8.8 1% 1,079.2 1,093.4 47.7 4
Slide 34: Fee and Commission Income
Summary Appendix Historical outlook 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 326.7 324.7 320.6 -17.8% -9.8% 315.7 318.4 39.5 38.0 35.6 40.3 43.3 11%
Slide 35: Trading Income
Summary Appendix Historical outlook Profit & Loss Balance Sheet Additional Information: Selected Financial Data Subsidiaries Trading Income Business Lines 2012-2016 Strategy Net Trading Income Structure (PLN M) 97.7 99.5 QoQ YoY 94.0 9.1 10.5 76.8 18.8 83.3 9.5 -4.0% -13.2% 85.9 90.4 83.5 78.9 73.8
Slide 36: Balance Sheet Analysis: Assets & Liabilities
Summary Appendix Historical outlook 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) 98.9 99.8 98.9 99.8 94.4 3.5 95.0 4
Slide 37: Balance Sheet Analysis: Currency Structure
Summary Appendix Historical outlook 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 38: Balance Sheet Analysis: Structure of loans and deposits
Summary Appendix Historical outlook 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
Slide 39: Results of Subsidiaries
Summary Appendix Historical outlook 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) Q3 2011 Q3 2012 14.9 14.4 13.0 11.1 9.6 10.2 9.1 8.7 8.8 4.4 4
Slide 40: Detailed Results of the Business Lines Q3/12: Retail Banking
Summary Appendix Historical outlook Profit & Loss Balance Sheet Subsidiaries Business Lines 2012-2016 Strategy Detailed Results of the Business Lines Q3/12 Retail Banking 40
Slide 41: Retail Banking: Summary of Q3/12 Financial Results
Summary Appendix Historical outlook Profit & Loss Balance Sheet BRE Bank Retail Banking Subsidiaries Summary of Q3/12: Financial Results Business Lines 2012-2016 Strategy Profit before Tax of Retail Banking Segment1) Number of Retail Outlets (by quarter, PLN M) 269 267 266 263 265 -3.0% 35 35 35 35
Slide 42: Sales of New Retail Loans
Summary Appendix Historical outlook Profit & Loss Balance Sheet BRE Bank Retail Banking Subsidiaries Sales of New Retail Loans Business Lines 2012-2016 Strategy Quarterly Sales of Mortgage Loans1) Quarterly Sales of Non-Mortgage Loans1) (PLN M) (PLN M) -56.0% +48.2% +16.7% 619.9 637.7 -47.2% 516.5 4
Slide 43: Mortgage Loans: Portfolio Structure and Quality
Summary Appendix Historical outlook 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 44: BRE Ubezpieczenia (BRE Insurance)
Summary Appendix Historical outlook 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) +11% +8% 35
Slide 45: Detailed Results of the Business Lines Q3/12: Corporates & Financial Markets
Summary Appendix Historical outlook Profit & Loss Balance Sheet Subsidiaries Business Lines 2012-2016 Strategy Detailed Results of the Business Lines Q3/12 Corporates & Financial Markets 45
Slide 46: Corporates and Financial Markets: Summary of Q3/12 Financial Results
Summary Appendix Historical outlook Profit & Loss Balance Sheet Corporates and Financial Markets Subsidiaries Summary of Q3/12: Financial Results Business Lines 2012-2016 Strategy Result before Tax of the Segment Corporate Branch Network (by quarter, PLN M) Offices Branches -22.1% 47 48 48 48 48 -27
Slide 47: Leasing and Factoring
Summary Appendix Historical outlook Profit & Loss Balance Sheet Corporates and Institutions Subsidiaries Leasing and Factoring Business Lines 2012-2016 Strategy Profit before Tax (PLN M) Factoring contracts (PLN M) -1% +9% 5.5 5.4 0.4 823.5 1.2 793.6 Factoring Companies 4.3 5.0 1 770.7 1 588.5 Trans
Slide 48: Market Shares
Summary Appendix Historical outlook Profit & Loss Balance Sheet Trading and Investment Activity Subsidiaries Market Shares Business Lines 2012-2016 Strategy BRE Bank’s Market Share1) BRE Bank in the Market for Non-Treasury Debt2) in Investment Banking Services for Q3/12 (PLN M) 29,146 8.0% 25,063 25
Slide 49: BRE Bank Hipoteczny (BBH)
Summary Appendix Historical outlook Profit & Loss Balance Sheet Trading and Investment Activity Subsidiaries BRE Bank Hipoteczny (BBH) Business Lines 2012-2016 Strategy Loan Portfolio (PLN M) Profit before Tax Balance-sheet Exposure (net value) (PLN M) +2.9% +0.3% 4,150 4,044 4,115 4,128 4,010 50 47
Slide 50: Dom Inwestycyjny BRE Banku (DI BRE)
Summary Appendix Historical outlook Profit & Loss Balance Sheet Trading and Investment Activity Subsidiaries Dom Inwestycyjny BRE Banku (DI BRE) Business Lines 2012-2016 Strategy Number of Accounts with DI BRE Q3/12 (thou.) DI BRE accounts 52.2 DI BRE Equities Trading (PLN M) eBroker (mBank) 205.5 B
Slide 51: BRE Bank Group’s 2012-2016 Strategy Summary
Summary Appendix Historical outlook Profit & Loss Balance Sheet Subsidiaries Business Lines 2012-2016 Strategy BRE Bank Group’s 2012-2016 Strategy Summary One Bank for Customers and Employees 51
Slide 52: Vision of BRE Bank Group
Summary Historical outlook BRE Bank Group’s 2012-2016 Strategy Summary Profit & Loss Balance Sheet Vision of BRE Bank Group Subsidiaries 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 53: Highlights of BRE Bank Group’s Strategy
Summary Historical outlook BRE Bank Group’s 2012-2016 Strategy Summary Profit & Loss Balance Sheet Highlights of BRE Bank Group’s Strategy Subsidiaries Business Lines 2012-2016 Strategy Key initiatives of the Strategy Better use of Unification of infrastructure branding policy Outlets availabl
Slide 54: One brand
Summary Historical outlook BRE Bank Group’s 2012-2016 Strategy Summary Profit & Loss Balance Sheet One brand Subsidiaries 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, MultiBan
Slide 55: One Network
Summary Historical outlook BRE Bank Group’s 2012-2016 Strategy Summary Profit & Loss Balance Sheet One Network Subsidiaries Business Lines 2012-2016 Strategy Integrated distribution network available to all clients Number of branches Current situation Future benefits PKO BP 1,198 Pekao SA 1,002 Li
Slide 56: Financial Performance Targets
Summary Historical outlook BRE Bank Group’s 2012-2016 Strategy Summary Profit & Loss Balance Sheet Financial Performance Targets Subsidiaries Business Lines 2012-2016 Strategy An efficient business platform supported by a strong balance sheet Loan to Deposit Assets Income Growth Cost/Income Ratio CA
Slide 57: Further enhancing our reporting standards: BRE Analyzer
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 58: 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 Joanna Filipkowska Direct dial: +48 22 829 04 53 Deputy Head of I