Bank Millennium SA · GPW:MIL
Bank Millennium SA — H1 2019 Earnings Presentation
32 slides from Bank Millennium SA's earnings presentation, 2019
Slide 1: Bank Millennium Group: Presentation of 1st half 2019 results
BANK MILLENNIUM GROUP Presentation of 1st half 2019 results – first time consolidation of Euro Bank S.A.
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 1H 2019 results
PRESENTATION OF 1H 2019 RESULTS > Acquisition of Euro Bank > Financial performance > Business development > Appendixes
Slide 4: Acquisition of Euro Bank: transaction closed on 31/5/2019
ACQUISITION OF EURO BANK Following non-objection from Financial Supervision Authority (KNF), the transaction was closed on 31/5/2019 Transaction Agreement Closing Legal merger Operational merger Day 0 (5 November 2018) Day 1 (31 May 2019) Day 2 (October 2019) Day 3 (November 2019) • One owner • One
Slide 5: Initial financial impact of Euro Bank acquisition on Day 1
ACQUISITION OF EURO BANK Initial financial impact of Euro Bank acquisition on Day 1 (closing of purchase transaction on 31/5/2019) Initial settlement of acquisition transaction of Euro Bank closed on Day 1 in the Group’s financials (*): (PLN million) Preliminary Goodwill calculation Base Purchase Pr
Slide 6: Presentation of 1H 2019 results
PRESENTATION OF 1H 2019 RESULTS > Acquisition of Euro Bank > Financial performance > Business development > Appendixes
Slide 7: Key profit & loss items
KEY PROFIT & LOSS ITEMS 1H 19 1H 18 Change Y/Y 2Q19 1Q19 Change Q/Q Net interest income 1084,7 892,9 584.3 500,3 16,8% Net commission income 338,2 336,6 0,5% 175,0 163,2 Total operating income 1563,4 1325,3 18,0% 822,6 740,8 11,0% PLN min Total costs -756,0 -632,2 196% -371,6 -384,5 -3,4% Costs with
Slide 8: Key balance sheet items and other relevant indicators
KEY BALANCE SHEET ITEMS AND OTHER RELEVANT INDICATORS PLN min June 19 June 18 Change Y/Y Mar. 19 Change Q/Q Active customers (ths) (*) 1947 1714 C233 1897 C 50> inc. on-line and mobile (*) 513) 1264 249 1 469 44 Customer Funds 85 590 69 236 23,6% 75 478 13,4% Deposits 76 828 59 831 28,4% 66 673 15,2
Slide 9: Main financial highlights of quarter 2019
MAIN FINANCIAL HIGHLIGHTS OF 2 QUARTER 2019 Continued improvement of profitability; excluding impact of initial Euro Bank consolidation Excess capital used for the acquisition; liquidity very solid Core income accelerated. arcliiteleiliyy ln Gene Gretel Costs influencedby Euro Bank and BFG fees Net
Slide 10: Profitability and cost efficiency
PROFITABILITY AND COST EFFICIENCY Net income distorted by one-off provision impact (IFRS9 on Euro Bank loans); Profitability improved with ROE at 9.7% and Cost to Income 46.0% Net profit (PLN million) normalised* adjus =>, z Day 1 provisions 160 7 = Eurobank 227 = Net Profit without EB 65 1H 2018 1H
Slide 11: Interest and commission income
INTEREST AND COMMISSION INCOME Continued strong growth of interest income; Commissions flat yearly but visible rebound in the quarter Net Interest Income * (PLN million) poe, without EB 1,085 ea” without EB 1,024 mEuro Bank 1H 2018 1H 2019 1919 2Q 19 Net Commission Income (PLN million) Interest on l
Slide 12: Asset quality, liquidity and capital
ASSET QUALITY, LIQUIDITY AND CAPITAL High asset quality and cost of risk kept after acquisition; Solid liquidity; excess capital used for Euro Bank acquisition Impaired Loans (IFRS9 stage 3) * Cost of Risk ** (PLN million) 12.6% Cost of Risk ratio (b.p.) 11.7% | 52 | without Day 1 provisions 11.3% 1
Slide 13: Presentation of results in 1H 2019
PRESENTATION OF RESULTS IN 1H 2019 > Acquisition of Euro Bank > Financial performance > Business development > Appendixes
Slide 14: Main business highlights of quarter 2019
MAIN BUSINESS HIGHLIGHTS OF 2 QUARTER 2019 Acceleration of organic growth combined with the first consolidation of Euro Bank business Retail business (excluding EB) Companies business • 1.9 million active customers (+233 ths yearly) and • Continued solid growth of loans to companies: 1.5 million usi
Slide 15: Loans and deposits
OANS AND DEPOSITS Strong double-digit growth of organic business plus visible impact of Eur: volumes in retail segment Loan Portfolio of the Group (net) (PLN million) Customer Deposits (PLN million) 67,855 6,413 Consumer EB 50,256 8,278 c BM onsumer Ga 3326 oans fo companies ae 6,216 ™ Mortgage EB 2
Slide 16: Retail business: deposits and accounts
RETAIL BUSINESS — DEPOSITS AND ACCOUNTS Continued strong pace of organic retail sales; Retail customers’ funds at PLN 66 billion level with Euro Bank volumes Retail Customer Funds (PLN million) <=> 26% <> 66,401 52,708 56,632 8,805 9,405 | 2.805 | 18,524 @ Investment products 14,728 Term Deposits 28
Slide 17: Retail banking: digital products
RETAIL BANKING – DIGITAL PRODUCTS (without Euro Bank) Strong growth in the number of digital users to 1.5 million; High share of electronic channels in product sales Active digital and mobile clients (in thousand) Cash loans (traditional and digital) (in thousand) +20% 39% Digital share in 1H 2019 5
Slide 18: New solutions in the Millenet and mobile applications
NEW SOLUTIONS IN THE MILLENNIUM AND MOBILE APPLICATIONS Extended Millenet application for Family 500+ and Good Start 300+; API* production environment made available . PSD2 New Digital Experience (NDE) Family 500+ and Good Start 300+ applications special access interface for open banking based on th
Slide 19: Retail banking: mobile channels
RETAIL BANKING – MOBILE CHANNELS (without Euro Bank) Strong growth of products sold through mobile applications BLIK transactions (*) (in thousand) HCE cards portfolio (**) (in thousand) 194% +99% 266 10,498 179 133 6,855 3,571 1H 2018 2H 2018 1H 2019 30/06/18 31/12/18 30/06/19 Parking fares and pub
Slide 20: High interest in e-administration services
HIGH INTEREST IN E-ADMINISTRATION SERVICES Over 300k applications for new 500+ and 300+ benefits, which gives the highest relative result (in comparison to the total number of active internet banking users). % of internet banking users (*) (500+) 18.5% 15.9% 44% 131% 13.1% 12.9% 19.3% MILLENNIUM = B
Slide 21: Goodie: Bank Millennium's smartshopping platform
GOODIE – Bank Millennium’s smartshopping platform Fast growth of app downloads and usage by goodie active customers Loyalty Cards set up 480,000 in 43 shopping centres 1.2 million downloads from app start coffee shop and restaurant stamp 215,000 cards set up 300,000 app downloads in 2019 aggregated
Slide 22: Retail business: loans
RETAIL BUSINESS —- LOANS Above PLN 1 billion quarterly sale of cash and mortgage loans (organic); Significant increase of retail loans after Euro Bank acquisition Retail loans (gross) (PLN million) Cash loans new sales * (PLN million) sale of Euro Bank in 1H19 PLN 1.178m. +9% y/y ex EB —— j 40.9% ma
Slide 23: Companies business: deposits and loans
COMPANIES BUSINESS – DEPOSITS AND LOANS Companies business keeps running at double -digit pace growth Companies deposits (PLN million ) Loans to companies (gross) (PLN million ) +16% +11% +18% +3% +14% +9% +14% 18,846 19,189 16,528 18,628 18,949 17,139 2,587 2,539 10,058 10,515 2,456 8,913 Factoring
Slide 24: Companies business: new loans
COMPANIES BUSINESS – NEW LOANS Robust growth in leasing and factoring sale and trade finance. Leasing – new sales (PLN million ) Factoring – turnover (PLN million ) +6.0% +8.3% 1,759 1,659 10,228 9,441 +4.0% +7.6% 856 862 897 5,301 802 4,841 4,927 4,600 1Q 18 2Q 18 1H 18 1Q 19 2Q 19 1H 19 1Q 18 2Q 1
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Slide 26: Macroeconomic overview
MACROECONOMIC OVERVIEW Economic growth in Poland remains solid, but it is decelerating. Consumption and investments are the main drivers of the growth. Inflation above the NBP’s target, but NBP interest rates at record low level. I nterest rates evolution (%) FX rates evolution Q-o-Q (bp) 0 0 -2 Q-o
Slide 27: Macroeconomic overview: deposits and credit
MACROECONOMIC OVERVIEW Growth of deposits remains solid, especially in households’ sector. Credit dynamics moderated, partially because of fx changes. Loans to households (PLN bln, % y/y) Mortgage loans (PLN bln, % y/y) Loans to companies (PLN bln, % y/y) Deposits from households (PLN bln, % y/y) No
Slide 28: Bank Millennium share performance
BANK MILLENNIUM SHARE PERFORMANCE Bank’s share price outperformed again all main indexes of the Warsaw Stock Exchange. Bank Millennium share performance vs. main indices Market cap/liquidity (PLN million ) (annual change as on 28.06.2019) Bank Millennium shares: Avg. daily turnover (PLN m) No of sha
Slide 29: Market leader in quality
MARKET LEADER IN QUALITY Confirmed again by several ind pendent rankings Bank Millennium — Client Relations Star The Best Bank in Poland according to Global Finance Magazine Most transparent company among those included in the mWIG40 index In the ,Banking Stars 2019" competition organised by Dzienni
Slide 30: Synthetic P&L account
SYNTHETIC P&L ACCOUNT (PLN million) Sonne 1 half 2018 1 half 2019 Change epee oF 2019 Change pro-forma pro-forma Y/Y pro-torma_ = pro-forma Q/Q Net interest income* 892,9 1 084,7 21,5% 500,3 584,3 16,8% Net commission income 336,6 338,2 0.5% 163,2 175.0 7.3% Other non-interest income ** 95,8 140,6 4
Slide 31: Balance sheet
BALANCE SHEET (PLN million) ASSETS 30/06/2018 31/03/2019 30/06/2019 Change y/y as) and balances with the Central 2147 1 737 3 396 58,2% Loans and advances fo banks 520 414 712 36,9% Loans and advances to customers 50 256 53 940 67 855 35,0% Amounts due from reverse repo trans. 109 797 74 -32,3% Debt
Slide 32: Investor Relations contact
Investor Relations contact: Artur Kulesza Katarzyna Stawinoga Head of Investor Relations Tel: +48 22 598 1110 e-mail: [email protected] Tel: +48 22 598 1115 e-mail: [email protected] Marek Miśków Tel: +48 22 598 1116 e-mail: [email protected] 32 www.ban