Slide 1: Results of BRE Bank Group Q1 2012
Results of BRE Bank Group Q1 2012 A strong start to the year Management Board of BRE Bank SA Presentation for Investors and Analysts May 8, 2012
Slide 2: Agenda
Agenda Summary of Q1/12 Analysis of Q1/12 Results Macroeconomic Update & 2012 Outlook Appendix Additional Information: Selected Financial Data Detailed Results of Business Lines 2
Slide 3: Highlights of Q1/12 at BRE Bank Group
Highlights of Q1/12 at BRE Bank Group Record quarterly net profit of PLN 331.1 M 1 Net profit up 16.2% QoQ and 44.1% YoY Operating profit before LLPs up 15.0% QoQ and 23.9% YoY Disciplined investment in business growth 2 Significant improvement in efficiency: C/I at 42.8% vs. 47.7% in 2011 Total cos
Slide 4: Summary of Results, Q1/12
Summary of Results, Q1/12 Key Financials Q1/12 Q4/11 Change Q1/Q4 Q1/11 Core income1) 761.6 774.1 -1.7% 713.9 Total income2) 916.3 891.3 +2.8% 821.8 Total cost (392.1) (435.5) -10.0% (398.7) Operating profit 524.2 455.8 +15.0% 423.1 before LLPs Loan Loss Provisions (111.8) (89.5) +24.9% (114.1) Prof
Slide 5: Development of Loans to Clients
Summary of Q1/12 in BRE Bank Group Development of Loans to Clients Loan portfolio growth impacted by PLN appreciation but new sales remain strong Development of Gross Loans Structure of Gross Loan Portfolio (PLN B) as of 31 March 2012 -3.6% BRE - +0.3 Individual BRE - others +0.4 0.6% clients -0.3 5
Slide 6: Development of Deposits
Summary of Q1/12 in BRE Bank Group Development of Deposits Ample liquidity with ‘real’ loan to deposit ratio at 87.7% Development of Deposits Structure of Deposits (PLN B) as of 31 March 2012 -8.4% BRE Bank BRE - Hipo teczny Individual 0.3% clients +1.3 55.7% -5.7 -0.1 BRE Fakto ring 0.2% +4.8% -21.
Slide 7: Wholesale funding details
Wholesale funding details BRE Bank wholesale FX funding profile details for 2012 Details of 2012 maturities 1 PLN 2.5 B 2 2012 maturities CHF 430 M EUR 250 M Actual refinancing needs FX funding strategy: 1 No significant funding needs due to loan book repayments in CHF 2 Funding mix to optimise cost
Slide 8: Business Development: Corporates & Markets
Summary of Q1/12 in BRE Bank Group Business Development: Corporates & Markets Resilient performance after record Q4/11 Clients Loans (PLN B) Deposits (PLN B) Product innovations +7.4% +8.6% +6.8% +3.1% -4.0% -21.3% Continued IB offer enhancement Detailed segmentation of IB clientele to better target
Slide 9: Business Development: Retail Banking
Summary of Q1/12 in BRE Bank Group Business Development: Retail Banking Expanding client base and accelerating sales of non-mortgage loans Clients (thou.) Loans (PLN B) Deposits (PLN B) Product innovations +5.7% +11.9% +12.9% +1.4% -3.0% +4.8% Aquarius Optimal Investing A unique objective and unbias
Slide 10: Innovations supporting organic growth
Innovations supporting organic growth New mBank A new value proposition adding to the strengths of Poland’s most successful retail banking project Integration with social media Modern, intuitive interface Discount offers Personal finance management Games Video chat and advisory Full transactional ba
Slide 11: Agenda
Agenda Summary of Q1/12 Analysis of Q1/12 Results Macroeconomic Update & 2012 Outlook Appendix Additional Information: Selected Financial Data Detailed Results of Business Lines 11
Slide 12: Income of BRE Bank Group
Analysis of Q1/12 Results Income of BRE Bank Group Record revenues breaching PLN 900 M treshold BRE Bank Group Income QoQ & YoY Income structure by Business Line in Q1/12 (PLN M) Corporates Trading and +11.5% and Investment +2.8% Institutions Activity PLN 318.3 M PLN 100.1 M 35% 11% -5.3% +8.4% -28.
Slide 13: Costs of BRE Bank Group
Analysis of Q1/12 Results Costs of BRE Bank Group Cost discipline bringing tangible results Overhead Costs + Depreciation of BRE Bank Group QoQ & YoY Cost Structure by Business Line in Q1/12 (PLN M) Corporates Trading and -1.7% and Investment -10.0% Institutions Activity PLN 142.0 M PLN 43.4 M 36% 1
Slide 14: Structure of Loan Loss Provisions
Analysis of Q1/12 Results Structure of Loan Loss Provisions New NPL formation in line with 2011 trends, NPL ratio affected by PLN appreciation. LLP levels reflecting prudent risk management BRE Bank Group’s Loan Loss Provisions (PLN M) -2.0% Trends in Q1/12: - Stable financial standing of corporate
Slide 15: Agenda
Agenda Summary of Q1/12 Analysis of Q1/12 Results Macroeconomic Update & 2012 Outlook Appendix Additional Information: Selected Financial Data Detailed Results of Business Lines 15
Slide 16: Macroeconomic Update (1/2)
Macroeconomic Update (1/2) Polish economic growth set to moderate Lower GDP growth than in Q4/11. Weaker consumption, Price shocks, record low savings rate, stagnation on labour maintenance of high investment growth rate, stronger zloty market and attractive rates on deposits lead to weaker reduces
Slide 17: Macroeconomic Update (2/2)
Macroeconomic Update (2/2) Monetary aggregates stabilization Strong rebound of corporate loans. Corporate deposits growth Decelerating household credit growth. Rise of deposits inhibited lower in March distorted by Quadra transaction by the end of tax avoidance window, which caused outflow of funds
Slide 18: 2012 Outlook – BRE Bank Group beyond Q1/12
2012 Outlook – BRE Bank Group beyond Q1/12 Core revenue growth and cost discipline 1 as key drivers of financial performance Business resilience despite uncertain market environment; 2 long-term performance dependant on broader European policy actions Strong capital and ample liquidity underpinning
Slide 19: Agenda
Agenda Summary of Q1/12 Analysis of Q1/12 Results Macroeconomic Update & 2012 Outlook Appendix Additional Information: Selected Financial Data Detailed Results of Business Lines 19
Slide 20: Appendix
Appendix Additional Information: Page No. Detailed Results of the Business Lines Page No. Selected Financial Data & Business Environment P&L Summary 22 BRE Bank Retail Banking 40-48 Details of changes in reporting 23 Summary of Q1/12 41 BRE Bank Group’s Historical Performance 24-26 Customer Acquisit
Slide 21: Additional Information: Selected Financial Data
Appendix Additional Information: Selected Financial Data 21
Slide 22: Consolidated Profit and Loss Account under IFRS
Appendix Additional Information: Selected Financial Data Consolidated Profit and Loss Account under IFRS PLN thou. Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 By quarter Net interest income 506,553 540,666 551,081 569,644 539,304 Net fee and commission income 207,388 208,208 219,297 205,079 222,268 Dividend incom
Slide 23: Details of changes in reporting
Appendix Details of changes in reporting Q4/11 Q1/12 Q1/12 Net QoQ PLN thou. new old Adjustments new adjustments change reporting reporting reporting 1 +39,130 Net interest income 569,644 517,310 +21,994 539,304 -5.3% 2 -17,136 Net trading income 76,502 136,811 1 -39,130 -39,130 97,681 27.7% 2 +17,1
Slide 24: BRE Bank Group's historical performance (1/3)
Appendix BRE Bank Group’s historical performance (1/3) Net interest income Net fee and commission income (PLN M) (PLN M) 2.1 2.3 2.3 2.3 2.2 2.5 2.4 840.0 2,167.9 745.9 1,658.2 1,811.0 564.3 551.5 594.7 1,392.5 416.4 1,027.8 724.2 569.6 539.3 205.1 222.3 2006 2007 2008 2009 2010 2011 Q4/11 Q1/12 200
Slide 25: 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% 47.7% 42.8% 1,840.6 1,550.1 1,544.8 1,617.3 1,680.3 1,507.3 1,279.6 1,306.5 1,044.4 1,136.3 922.4 580.6 455.8 524.2 435.5 392.1 2006 2007 2008 2009 2010 2011 Q4/1
Slide 26: 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 70.2 70.2 67.7 3.6 3.6 3.4 0.8 1.3 2.1 30.6 30.6 27.7 21.5 26.3 1.0 22.5 98.9 98.9 0.8 10.6 7.4 8.1 8.1 9.8 90.0 92.6 5.2 6.4 82.6 81.0 6.7 3.3 56.0 2.2 42.3 25.0 23.4 25.
Slide 27: Profitability of the Business Segments
Appendix Summary of Q1/2012 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 +33.4% +22.0% +39.6% +12.6% -3.3% +46.0% 412.3 235.1 227.3 179.0 366.2 309.0 186.3 128.2 122.6 Q1
Slide 28: 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 131.2% in Q1/12 However, funding policy for FX risk mitigation is 127.6 125.1 131.2 implemented 84.0 86.2 87.7 BRE mid-term loans in FX fund FX-denominat
Slide 29: Capital Adequacy Ratio (CAR) in Q1/12
Appendix Additional Information: Selected Financial Data BRE Bank Group’s Capital Adequacy Ratio (CAR) in Q1/12 CAR at solid level of 16.93%; Core Tier 1 Ratio at 11.62% in 03/12 Relation between Capital Adequacy Ratio (CAR) Change of CAR under Basel II and Risk Weighted Assets (RWA) 70 18% 14.96% 1
Slide 30: Results of Subsidiaries
Appendix Additional Information: Selected Financial Data Results of Subsidiaries Profit before Tax of Consolidated Subsidiaries (PLN M) 21.9 16.5 14.9 12.91) 11.1 11.8 9.1 6.8 5.9 4.9 4.3 4.3 3.8 2.4 1.1 0.4 0.6 -0.4 BRE BRE Leasing BRE Bank DI BRE Aspiro BRE Faktoring BRE.locum BRE WM Other Ubezpie
Slide 31: Net Interest Income & Margin
Appendix Additional Information: Selected Financial Data Net Interest Income & Margin Interest Income Structure Net Interest Income, Q1/12 by Business Lines (PLN M) (PLN M) 1,070.2 -5.3% 891.5 935.7 993.3 1,079.2 3.3 3.0 2.2 34.8 39.1 63.7 -2.8 19.9 17.7 1.8 17.8 6.7 21.7 11.7 23.2 13.1 20.2 173.6 5
Slide 32: Fee and Commission Income
Appendix Additional Information: Selected Financial Data Fee and Commission Income Commission Income Structure Net Fee and Commission Income, Q1/12 by Business Lines (PLN M) (PLN M) 306.7 330.0 326.7 315.7 324.7 +8.4% 41.1 39.5 38.0 12% 40.3 41.4 50.5 46.6 34.1 42.4 13% 36.3 48.8 52.5 50.1 53.5 16%
Slide 33: Trading Income
Appendix Additional Information: Selected Financial Data Trading Income Share of Client Driven Transactions in Net Trading Income Net Trading Income Structure (%) (%) 82.5 94.1 93.5 76.5 97.7 Q1/12 58.9% 11.5% 29.6% Q4/11 6.1 10.0 18.8 75.6% 10.4% 14.0% 11.3 Q3/11 71.0% 0.6% 28.4% 88.0 83.5 85.9 78.
Slide 34: Administrative Expenses Structure
Appendix Additional Information: Selected Financial Data Administrative Expenses Structure Overhead Costs and Depreciation C/I Ratio of BRE Bank Group (PLN M) (%, as at the end of period) 398.7 418.6 427.5 435.5 392.1 22.5 18.3 24.1 22.8 48.9 60.2 25.0 50.8 48.9 48.3 150.5 144.0 142.6 136.5 129.5 48
Slide 35: Loans and Deposits
Appendix Additional Information: Selected Financial Data Loans and Deposits Net Loans (PLN B) +12.1% BRE Bank1) Market1) 59.4 61.3 1.22) 1.22) QoQ -3.6% -1.3% 60.1 64.4 67.9 65.2 58.2 +3.2% +7.2%3) +5.3% -3.9% YoY +11.5% +11.5% 03/11 06/11 09/11 12/11 03/12 Deposits (PLN B) +8.5% BRE Bank Market 45.
Slide 36: Balance Sheet Analysis: Currency Structure
Appendix Additional Information: Selected Financial Data Balance Sheet Analysis: Currency Structure Currency Structure of Loans (net) Currency Structure of Amounts due to banks and customers1) (PLN B) (PLN B) 58.2 61.3 64.4 67.9 65.2 77.2 76.6 81.5 85.1 77.9 2.0 3.2 1.9 1.7 3% 3.3 2.7 2.5 3.0 4% 1.9
Slide 37: 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) 89.0 88.7 94.4 98.9 92.6 61.2 62.8 66.2 69.8 67.3 3.5 4.3 3.2 1.2 6.6 4.2 5% 2.1 3.0 4% 1.2 3.8 4.3 2.9 3.1 4%
Slide 38: Balance Sheet Analysis: Liabilities
Appendix Additional Information: Selected Financial Data Balance Sheet Analysis: Liabilities Structure of Liabilities Structure of Deposits (PLN B) (PLN B) 89.0 88.7 94.4 98.9 92.6 45.8 46.7 49.0 54.2 49.7 0.5 7.5 1.6 0.5 1% 0.8 0.8 7.0 7% 0.6 6.6 0.9 5.2 8.1 6.1 7.8 1.7 8.5 9% 7.2 7.6 1.5 27.0 1.5
Slide 39: 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) -374 2.3% 2.2% 4.7% 5.3% 5.3% 5.6% 5.0% 5.3% 4.7% 5.0% -59 71% 59% 68% 68% 68% 68% 65
Slide 40: Detailed Results of the Business Lines Q1/12: Retail Banking
Appendix Detailed Results of the Business Lines Q1/12 Retail Banking 40
Slide 41: Retail Banking Summary of Q1/12: Financial Results
Appendix BRE Bank Retail Banking Summary of Q1/12: Financial Results Profit before Tax of the Segment Structure of the Profit before Tax of Retail Banking2) in Q1/12 (by quarter, PLN M) (PLN M) 108.8 81.5 151.0 114.3 186.3 317.1 235.5 235.1 227.3 90.31) 1.2 33.5 0.0 58.2 117.6 234.3 238.6 243.8 201.
Slide 42: Retail Banking (Poland) Customer Acquisition and Volume Trends
Appendix BRE Bank Retail Banking (Poland) Customer Acquisition and Volume Trends Data as of 31.03.2012 End of 12/11 Change End of 03/12 (M) 3.36 M clients +1.3% 3.40 M 0.4 0.6 4.3 4.7 M accounts +1.2% 4.7 M 2.8 Customers Accounts 21.2 B deposits (PLN) +8.8% 23.0 B (PLN B) 0.7 35.7 B loans (PLN) -3.0
Slide 43: Retail Banking Foreign Operations (CZ/SK)
Appendix BRE Bank Retail Banking foreign operations (CZ/SK) Customer Acquisition and Volume Trends Data as of 31.03.2012 End of 12/11 Change End of 03/12 (thou.) 271.3 527.0 thou. customers +2.2% 538.8 thou. 143.9 756.1 394.9 1,004.5 thou. accounts +2.3% 1,027.4 thou. Customers Accounts (EUR M) 829.
Slide 44: Retail Banking (Poland) Clients & volumes
Appendix BRE Bank Retail Banking (Poland) Clients & volumes Clients Deposits (thou.) (PLN B) +1.3% +5.8% 1.0 5 4 4 4 4 4 1.5 5 5 2.3 2.1 2.0 1.8 1.7 1.6 1.6 6 5 600 603 610 616 2.1 7.3 592 592 595 6.0 7 588 603 2.5 5.7 5.5 5.2 5.1 5.0 4.7 5.1 570 5.2 493 4.4 2,719 2,752 2,789 2,371 2,436 2,511 2,581
Slide 45: Retail Deposits & Loans: Market Shares
Appendix BRE Bank Retail Banking Deposits & Loans: Market Shares Household Deposits1) Household Loans1) (PLN B) (PLN B) 03/12: 03/12: 4.7% 6.6% 40 7% 40 6.7% 7% 6.6% 6.6% 6.7% 7.0% 6.5% 6.5% 6.4% 6.7% 35 35 6.5% 6.5% 6.4% 6% 6.3% 6% 5.5% 5.9% 5.3% 5.2% 5.2% 30 4.9% 5.1% 5.0% 5.0% 30 5.0% 4.7% 5.2% 4
Slide 46: 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 31.03.2012 in Poland in Poland, Czech Republic & Slovakia Bala
Slide 47: 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 97 97 109 131 134 134 133 133 133 134 134 134 135 134 77 52 58 54 59 61 61 61 62 62 62 61 61 46 42 33 26 21 18 44 27 13 10 10 65 65 65
Slide 48: 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) +95% +22% +1% 617.7 37.0 27.5 27.9 30.2 316.1 Q1/11
Slide 49: Detailed Results of the Business Lines Q1/12: Corporates & Financial Markets
Appendix Detailed Results of the Business Lines Q1/12 Corporates & Financial Markets 49
Slide 50: Corporates and Financial Markets Summary of Q1/12: Financial Results
Appendix Corporates and Financial Markets Summary of Q1/12: Financial Results Result before Tax of the Segment Structure of the Result before Tax of the Segment in Q1/12 (by quarter, PLN M) (PLN M) 179.0 5.7 53.6 64.2 160.4 0.0 42.5 135.4 128.2 99.0 122.5 185.4 92.4 81.1 11.8 49.4 237.3 179.0 Profit
Slide 51: Corporates and Institutions Customer Acquisition and Volume Trends
Appendix Corporates and Institutions Customer Acquisition and Volume Trends End of 12/11 Change End of 03/12 Corporate Loans (PLN B) 13,977 corporate clients +437 14,414 10.2 10.5 17.7 27.9 B corporate loans (PLN) -4.0% 26.8 B 16.3 12/11 03/12 thereof: 17.7 B loans for enterprises -8.1% 16.3 B1) (PL
Slide 52: 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 Corporate1) Deposit Volume 01/07 – 03/12 (BRE Bank only, PLN B) 12,0% 21.0 17.3 16.8 16.7 10,0% 16.1 15.4 14.9 14.6 14.6 14.4 14.2 13.7 13.3 13.3 14.0 13.1 12.9 12.7 8.8% 12.
Slide 53: 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 16.3 15.6 15.9 15.9 19.5 19.6 19.6 21.4 24.6 23.6 13,271 13,423 13,636 13,878 13,977 14,414 1,101 1,114 1,114 1,062 1,083 46
Slide 54: Corporates and Institutions: Leasing and Factoring
Appendix Corporates and Institutions Leasing and Factoring Profit before Tax (PLN M) BRE Faktoring (Poland) PLN 4.3 M pre-tax profit in Q1/12 (-32.6% QoQ); Sales at PLN 1.8 B in Q1/12 (-6.7% QoQ); 1.4 Ranked 5th in the Polish Factoring Association 0.9 with a market share of 9.8% in Q1/12 Factoring T
Slide 55: 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 Q1/12 (PLN M) 6.8% 21.1% 26,623 22,493 16,766 4,753 4,706 3,769 Treasury IRS/FRA Bills and Bonds Short-term Debt Corporate Debt Mid-term
Slide 56: 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) 4,107 3,889 3,925 3,787 3,769 3,800 3,831 4,010 4,150 4,044 +30% 59 58 52 50 47 56 54 53 52 51 699 636 551 550 691 672 662 640 629 624 3,349 3,142 3,
Slide 57: 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 Q1/12 (thou.) (PLN M) DI BRE accounts 53.7 -8.5% eBroker (mBank) 205.1 Brokerage Service (MultiBank) 35.8 TOTAL 294.6 DI BRE Market Share in Q1/12, by volume1) 6.49 5.94 Equi
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