Slide 1: Bank Millennium Group: Presentation of 2016 results
BANK MILLENNIUM GROUP Presentation of 2016 results
Slide 2: Disclaimer
DISCLAIMER This presentation has been prepared by Bank Millennium for its stakeholders for information purpose only. The information presented in this presentation should be read together with other information published by the Bank (on www.bankmillennium.pl), in particular financial and current rep
Slide 3: Presentation of results in 2016
PRESENTATION OF RESULTS IN 2016 > Status of medium term strategy execution > Financial performance > Business development > Appendixes
Slide 4: Strategy execution
STRATEGY EXECUTION Implementation of 2015-2017 strategy is allowing Bank Millennium to consolidate its position as a leading quality and technologically advanced bank …. Customers growth Strong pace of customer acquisition as the most important „investment” for the future growth Retail deposit base
Slide 5: Strategy execution (continuation)
STRATEGY EXECUTION (continuation) … and to fulfil most of its strategic targets. Banking tax and no dividends distribution is affecting ROE target Acceleration of active clients growth (300k in 3 years): +207k net active in 2015-16 Increasing market share of retail customer funds to above 6%: 5.8% P
Slide 6: Quality excellence
QUALITY EXCELLENCE In the ranking „Newsweek Friendly Bank 2016” Millennium was the only bank awarded in all categories and keeps a consistent position on the podium for several years in a row INTERNET TRADITIONAL MORTGAGE MOBILE BANK BANKING BANKING BANKING 2016 2nd 3rd 2nd 3rd 2015 1st 1st 1st beyo
Slide 7: Summary of 2012-2016 achievements (1)
SUMMARY OF 2012-2016 ACHIEVEMENTS (1) Strong financial performance despite unfavourable environment for banks in Poland: low interest rates, regulatory interventions on maximum fees and higher capital requirements Net Income (PLN million) Net Interest Income (PLN million) Net Commission Income (PLN
Slide 8: Summary of 2012-2016 achievements (2)
SUMMARY OF 2012-2016 ACHIEVEMENTS (2) Strong growth of business volumes, especially in strategic areas … Deposits of Individuals (PLN million) Deposits of Companies (PLN million) Consumer loans (PLN million) CAGR* CAGR* +11.1% +16.4% 35 616 39 682 18 871 17 811 6 269 15 416 17 194 16 194 5 661 26 01
Slide 9: Summary of 2012-2016 achievements (3)
SUMMARY OF 2012-2016 ACHIEVEMENTS (3) … aligned with jump in number of customers and accounts, supported by quality improvement and excellence in digital channels Number of Active Customers (thousand) Number of e-Customers (thousand) Number of Mobile Customers (thousand) +266 +362 +517 1369 1492 122
Slide 10: Bank Millennium 2017: Outlook for the future
BANK MILLENNIUM 2017 Outlook for the future – Main focus Increasing scale Continue digital Strict risk journey being a top management reference in Poland Explore new growth Gradually recover and value creation profitability lost due opportunities to the banking tax 10
Slide 11: Presentation of results in 2016
PRESENTATION OF RESULTS IN 2016 > Status of medium term strategy execution > Financial performance > Business development > Appendixes
Slide 12: Main financial highlights of 2016
MAIN FINANCIAL HIGHLIGHTS OF 2016 The highest net profit in the Bank’s history, supported by one-off items * Record net profit and Net profit in 2016 at PLN 701 million (+28,3% y/y) cost efficiency ROE at 10.4% (7.8% without one-off items*) Cost to Income at 45% - the lowest yearly level (49.6% with
Slide 13: Profitability and cost efficiency
PROFITABILITY AND COST EFFICIENCY Core income solid growth outperformed modest cost growth, which allowed Cost to Income to reach yearly lowest level below 50% Net profit (PLN million) Operating income * (PLN million) 9,0% ROE 10,4% +22.6% 2 472 +28.3% +50% 2 017 335 174,1 +148% 2 581 387 17 Other i
Slide 14: Interest and commission income
INTEREST AND COMMISSION INCOME Strong growth of Net Interest Income by 10% thanks to margin improvement, mainly on deposits. Fees recovered from the bottom reached in 1Q 2016 Net Interest Income * (PLN million) Interest on loans and deposit +9.7% 1 556 4,14% 4,08% 4,19% 4,07% 4,04% 1 419 Interest of
Slide 15: Asset quality and cost of risk
ASSET QUALITY AND COST OF RISK Good asset quality with significant improvement in corporate loans, reasonable cost of risk maintained, while capital position strongly improved Impaired Loans P&L impairment provisions (PLN million) 11,8% 11,5% 11,8% 52 49 COST OF RISK* 10,8% 11,1% -4.2% 241,2 231,2 T
Slide 16: Presentation of results in 2016
PRESENTATION OF RESULTS IN 2016 > Status of medium term strategy execution > Financial performance > Business development > Appendixes
Slide 17: Main business highlights in 2016
MAIN BUSINESS HIGHLIGHTS IN 2016 Consistent strategic focus realized in a successful delivery of targeted results both in retail and companies business, with higher and higher participation of electronic channels Retail business 1 492 ths. active customers with 122 ths. net growth during 2016 year R
Slide 18: Use of electronic channels
USE OF ELECTRONIC CHANNELS High share of electronic channels in product sales volume 980k (+16% y/y) 596k (+38% y/y) Retail clients active in mobile and online banking Retail clients actively using mobile app and mobile Millenet 23% 41% 99% 87% share in of all Bank of all new term share in cash loan
Slide 19: New solutions in Millenet and mobile application
NEW SOLUTIONS IN MILLENET AND MOBILE APPLICATION Innovation, convenience and simplicity for customers is the key to build long term relationships through electronic channels Motor insurance Access to PUE ZUS, to HCE mobile Shopping without 500+ child benefit payments code (BLIK One Click) Improved C
Slide 20: Loan and deposits
LOAN AND DEPOSITS Deposits grew faster than loans, as on entire Polish banking market Loan Portfolio of the Group (net) (PLN million) Customer Deposits (PLN million) +1.4% +5.8% 46 369 46 391 47 020 +2.9% 54 298 55 876 52 810 13 463 13 561 13 778 Loans to companies 16 071 16 194 17 194 Companies Dep
Slide 21: Retail business – deposits and accounts
RETAIL BUSINESS – DEPOSITS AND ACCOUNTS Fast growth of new active customers and retail deposit volumes bring the Bank close to 2017 strategic targets Retail Deposits (PLN million) Active retail clients (in thousand.) 11% +122 35% +41 3.8% 39 682 +37 38 227 35 616 +27 +18 17 120 18 611 18 602 Term De
Slide 22: Retail business – loans
RETAIL BUSINESS – LOANS Change of loan mix continued with double digit growth of consumer loans volume Retail loans (gross) (PLN million) Cash loans new sales (PLN million) 1.4% 10.7% -8.8% 2.5% 2 484 33 615 33 610 34 084 2 265 5 661 6 145 6 269 Consumer loans 9 341 9 529 9 572 PLN mortgage 557 486
Slide 23: Companies business – deposits and transactions
COMPANIES BUSINESS – DEPOSITS AND TRANSACTIONS Higher number and volume of transactions allowed to increase current accounts balances with positive implication for profitability Companies deposits (PLN million) Volume of FX transactions (PLN billion) -6% 28% +22% 27,3 17 194 21,4 16 071 16 194 11 65
Slide 24: Companies business – loans
COMPANIES BUSINESS – LOANS Corporate loans with modest growth, like in the sector, but strong growth of specialized financing Loans to companies (gross) (PLN million) Leasing – new sales (PLN million) +0.6% 7.3% 2 643 14 215 14 174 14 301 2 462 1 926 1 821 1 932 Factoring 4 777 5 100 5 261 Leasing L
Slide 25: Presentation of results in 2016
PRESENTATION OF RESULTS IN 2016 > Status of medium term strategy execution > Financial performance > Business development > Appendixes
Slide 26: Macroeconomic overview
MACROECONOMIC OVERVIEW Interest rates evolution (%) FX rates evolution Q-o-Q (bp) 0 2 2 Q-o-Q 2,6% 3,4% 8,4% Y-o-Y (bp) 0 1 3 Y-o-Y 3,8% 4,5% 7,1% GDP growth & unemployment (%) Inflation (%) Investments & Consumption (% y/y) Source: NBP, GUS 26
Slide 27: Macroeconomic overview (continuation)
MACROECONOMIC OVERVIEW (continuation) Loans to households (PLN billion, % y/y) Households’ deposits (PLN billion, % y/y) PLN billion Loans to companies (PLN billion, % y/y) Companies’ deposits (PLN billion, % y/y) 27 Soure: NBP, Bank Millennium estimates
Slide 28: Bank Millennium share performance
BANK MILLENNIUM SHARE PERFORMANCE Market cap/liquidity (PLN million) Bank Millennium shareholders’ structure (*) 8,9 Avg. turnover Market Cap. BCP 34,5% 5,9 5,7 Nationale-Nederlanden OFE 4,1 50,1% Aviva OFE 10 069 Remaining free float 8 737 6 745 6 296 5,5% 2013 2014 2015 2016 9,9% Annual stock perf
Slide 29: Recent major awards and achievements
RECENT MAJOR AWARDS AND ACHIEVEMENTS During 2016 Bank received many distinguished awards GLOBAL FINANCE AWARD 2016 QUALITY IN THE BANK SERVICE QUALITY STAR For Poland’s best digital bank, Highest standard of customer Bank Millennium was honored according to the independent service in a branch with t
Slide 30: Synthetic P&L account
SYNTHETIC P&L ACCOUNT (PLN million) Pro-forma 2015 2016 Change Y/Y 4Q 2015 3Q 2016 4Q 2016 Net interest income* 1 418,7 1 556,5 9,7% 361,7 393,2 407,3 Net commission income 596,2 581,0 -2,5% 140,4 150,2 156,7 Other non-interest income ** 2,3 334,7 14 212,3% -114,9 27,6 17,3 Operating Income 2 017,2
Slide 31: Balance sheet
BALANCE SHEET (PLN million) ASSETS 31/12/2015 30/09/2016 31/12/2016 Change y/y Cash and balances with the Central Bank 1 946 2 366 1 779 -8,6% Loans and advances to banks 2 349 1 369 1 268 -46,0% Loans and advances to customers 46 369 46 391 47 020 1,4% Amounts due from reverse repo 0 86 91 - transa
Slide 32: Investor Relations contact
Investor Relations contact: Artur Kulesza Katarzyna Stawinoga Head of Investor Relations Tel: +48 22 598 1110 e-mail: katarzyna.stawinoga@bankmillennium.pl Tel: +48 22 598 1115 e-mail: artur.kulesza@bankmillennium.pl Marek Miśków Tel: +48 22 598 1116 e-mail: marek.miskow@bankmillennium.pl 32 www.ban