Bank Millennium SA · GPW:MIL
Bank Millennium SA — Q1 2021 Earnings Presentation
38 slides from Bank Millennium SA's earnings presentation, 2021
Slide 1: 1Q21 results presentation
Presentation 1Q21 results 1
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: Agenda
AGENDA 3
Slide 4: Presentation of 1Q21 results: Financial performance
01 PRESENTATION OF 1Q21 RESULTS Financial performance 4
Slide 5: 2021 – A transition year before new strategy roll-out
2021 – A TRANSITION YEAR BEFORE NEW STRATEGY ROLL-OUT Quick recovery of Focus on Full business operational digitalisation results efficiency • Improvement of business results • New operational efficiency • Extending digital customer base through better pricing and sales program: Processes Re- beyond
Slide 6: Key profit & loss items
KEY PROFIT & LOSS ITEMS PLNmn 1Q21 1Q20 Change Y/Y 4Q20 Change Q/Q Net interest income 622.3 689.6 -9.8% 624.6 -0.4% Net commission income 204.8 194.5 5.3% 5.3% 192.7 6.3% Total operating income 867.0 920.7 -5.8% 909.5 -4.7% Total costs -427.3 -517.9 -17.5% -417.7 2.3% Costs without EB integration a
Slide 7: Key balance sheet and business items
KEY BALANCE SHEET AND BUSINESS ITEMS PLNmn Mar. 21 Mar. 20 Change Y/Y Dec. 20 Change Q/Q Active customers (ths) 2 611* 2 606 23** 2 607* 4 incl. on-line and mobile 2 113 1 926 187 2 053 60 Customer funds 97 418 90 700 7.4% 90 264 7.9% Deposits 88 255 83 584 5.6% 81 511 8.3% Deposits of individuals 6
Slide 8: Financial highlights of 1Q21
FINANCIAL HIGHLIGHTS OF 1Q21 Without FX mortgage provisions and extraordinary items, 1Q21 ROE at 9.3%; adjusted net income up 48% y/y Net profit Net profit w/o extraordinary* items (PLNmn) (PLNmn) +48% 6.3% 9.3% +3% ROE adjusted * 185 179 204 209 0.8% -13.8% ROE reported 142 54 60 18 1Q20 2Q20 3Q20
Slide 9: Financial highlights of 1Q21
FINANCIAL HIGHLIGHTS OF 1Q21 Most of last year’s pandemic impact neutralised Fees up Adjusted net profit* NII stable, NIM up +48% y/y +3bp q/q +6% q/q Adjusted ROE Costs reduction Provision coverage up 9.3% -17% y/y DPD90+ 120% * In 2021 excl. FX-mortgage provisions and even distribution of BFG reso
Slide 10: Interest and commission income
INTEREST AND COMMISSION INCOME NII stabilised in 1Q21 with slight growth of quarterly NIM; net fees up 6% q/q Net interest income * (PLNmn) Interest on loans and deposit (quarterly average) 4.75% 4.57% 3.94% -10% 3.37% 3.22% 3.25% 2.94% 2.81% 2.58% 2.49% 2.53% 2.56% 0% 1.07% 1.03% 0.72% 0.23% 0.11%
Slide 11: Cost efficiency
COST EFFICIENCY Operating costs decreased -17% y/y supported by lower BFG fees and completed integration of EB (-14% w/o BFG) Operating cost Employees -1,174 -14% without BFG costs (PLNmn) 8,412 8,141 -17% 7,846 7,630 7,493 7,335 7,238 -8% 7,014 6,602 6,450 -7% -1,179 Cost/income 48.2% 46.0% 46.1% 4
Slide 12: Asset quality
ASSET QUALITY Good credit quality without material signs of deterioration; increased stage 2 in corporate due to more conservative approach to PD parameter. Cost of risk (bp) Impaired loans (IFRS9 stage 3 &POCI) 10.6% 10.6% 10.5% 10.9% 9.9% 108* 89 80 55 39 Total loans 65 133 91 62 27 Retail 4.8% 4.
Slide 13: Loan moratoria mostly expired, good quality of loans back to service
LOAN MORATORIA MOSTLY EXPIRED, GOOD QUALITY OF LOANS BACK TO SERVICE Temporary credit holidays Portfolio with active credit holidays Loans exposure with active credit holidays as on March 31, 2021 Portfolio with active credit holidays (PLNmn) Category Exposure [PLNmn] % of outstanding Retail o/w: 70
Slide 14: FX-mortgage portfolio
FX-MORTGAGE PORTFOLIO FX-mortgage portfolio continued to decline steadily in CHF terms FX-mortgages* FX-mortgages as % of total book 5,000 4,698 4,406 (CHFmn) 25.8% 25.8% 4,500 4,094 -8% 21.6% 21.7% 3,782 -2% 20.6% 21.2% 4,000 3,498 20.1% 20.2% 19.2% 19.8%20.3% 19.6% 18.8% 18.9% 18.3% 17.8% 3,500 3,
Slide 15: Liquidity and capital
LIQUIDITY AND CAPITAL Robust liquidity and strong capital adequacy with surplus of more than 5 ppt Liquidity indicators Group capital ratios * 202% 20.0% 20.0% 177% 178% 19.5% 19.5% 162% 161% 19.4% 17.0% 17.0% 16.5% 16.3% 91% 16.5% 86% 83% 85% 85% 15.4% 15.4% 15.4% 14.1% 14.1% 22% 26% 25% 19% 22% 12
Slide 16: Presentation of 1Q21 results: Business development
02 PRESENTATION OF 1Q21 RESULTS Business development 16
Slide 17: Business highlights of 1Q21
BUSINESS HIGHLIGHTS OF 1Q21 Retail business growing fast above pre-Covid levels, corporate showing signs of gradual improvement Loans Mortgage sales record in 1Q Cash loans sales +5% y/y PLN2.2bn +24% q/q Investment products Active digital customers Customer deposits +29% y/y >2.1mn +6% y/y 17
Slide 18: Loans and customer funds
LOANS AND CUSTOMER FUNDS Robust dynamics in retail loans mostly driven by mortgages; slight growth of loans to companies in 1Q21 Loan portfolio of the Group (net) Customer deposits +5% (PLNmn) +6% (PLNmn) +2% +18% +9% +1% +2% 74,088 75,311 83,584 88,255 72,046 81,511 15,086 15,296 15,375 Consumer lo
Slide 19: Retail banking – digital customers and sales
RETAIL BANKING – DIGITAL CUSTOMERS AND SALES Continued growth in the number of digital users and logins; high share of electronic channels in the sale of products Active digital and mobile clients Cash loans disbursed in digital channels +10% (thousand) 36 mln +17% (thousand) logins to Millenet (**)
Slide 20: Banking in Covid-19 pandemic and adjustment to 'new normal'
BANKING IN COVID-19 PANDEMIC AND ADJUSTMENT TO ’NEW NORMAL’ We supported our clients and employees during the pandemic Support for customers: • Contactless card transactions up to PLN100 without PIN • Most transactions can be done safely and remotely from home • Fully online current account opening
Slide 21: Customers' satisfaction, loyalty and service quality remain stable
CUSTOMERS’ SATISFACTION, LOYALTY AND SERVICE QUALITY REMAIN STABLE Retail NPS (*) Market rankings 1Q21 53 53 54 51 1st Best quality (branch) (2) league 1st Best quality (remote) (2) league 1st Best quality (mortgage) (2) league 1st Best internet banking (2) league 1st Best mobile banking (2) league
Slide 22: Retail banking – online products and services
RETAIL BANKING – ONLINE PRODUCTS AND SERVICES Still very high transaction rate in online and mobile payments; record-breaking increase in BLIK transactions. Internet payment transactions* Contactless mobile payments (HCE) New records in BLIK (million) (thousand) payments: +66% E-commerce transaction
Slide 23: Recent solutions and innovations
RECENT SOLUTIONS Further digitalization of processes, cooperation with public agendas and creating the best customer AND INNOVATIONS experience in using banking channels in line with omnichannel approach. Digital sales and products management Cash loan lead application for microentreprenuers in Mi
Slide 24: Recent solutions and innovations
RECENT SOLUTIONS AND INNOVATIONS Achieving excellent results of goodie cashback. 2.34mn downloads since 2018 Presence in the Bank Millennium TV commercial PLN 536mn Generated cashback turnover PLN 14.9mn Amount cashback PLN 4.5mn Cashback transaction number 1Q21: 143,000 app downloads PLN 136mn Gene
Slide 25: Retail business – loans and customer funds
RETAIL BUSINESS – LOANS AND CUSTOMER FUNDS Solid growth of retail loans driven by mortgage; high dynamics of current accounts volumes; investment products and cash loans rebounded Retail loans (gross) (PLNmn) Retail customer funds 8% +4% (PLNmn) +16% y/y without FX loans 3% 29% 25% -37% 57,555 58,70
Slide 26: Retail banking - number of customers and accounts
RETAIL BANKING - NUMBER OF CUSTOMERS AND ACCOUNTS Steady growth of customers and cards after completed merger with Euro Bank Active retail clients Active micro-business clients (thousand) (thousand) +23* +10 106.1 2,606 2,617 2,631 2,607** 2,611**s 102.5 103.9 100.6 96.4 31/03/20 30/06/20 30/09/20 3
Slide 27: Companies business – deposits and loans
COMPANIES BUSINESS – DEPOSITS AND LOANS C/A balances up 45% y/y driving total deposits up +18%; loans decreased slightly y/y and stable quarterly Companies deposits Loans to companies (gross) (PLNmn) -3% (PLNmn) +18% +8% -23% -5% +45% -5% 19,660 19,023 19,031 23,991 2,754 2,859 2,982 20,255 19,636 F
Slide 28: Companies business – loans and transactions
COMPANIES BUSINESS – LOANS AND TRANSACTIONS Leasing sale rebounded and keeps higher levels in 1Q21; factoring grew strongly +25% y/y Leasing – new sales Factoring – turnover (PLNmn) (PLNmn) +23% +25% 774 762 7,002 6,487 618 5,971 563 520 5,208 5,047 1Q20 2Q20 3Q20 4Q20 1Q21 1Q20 2Q20 3Q20 4Q20 1Q21
Slide 29: Presentation of 1Q21 results: Appendices
03 PRESENTATION OF 1Q21 RESULTS Appendices 29
Slide 30: Macroeconomic overview: Economy
MACROECONOMIC OVERVIEW Economy Data from real economy (% y/y) PMI indicators (pts) Polish economy seems to be more resilient to pandemic and economic situation did not suffer much despite of prolonged restrictions. Industrial sector is expanding while trade is recovering gradually, supported by impr
Slide 31: Macroeconomic overview: Financial markets
MACROECONOMIC OVERVIEW Financial markets Interest rates EUR/PLN exchange rate NBP intervention Monetary Policy Council kept rates at record low levels in 1Q21 and continued asset purchase program, although its scale remained small. Yields of Polish bonds stayed at low levels, though were higher vs.
Slide 32: Macroeconomic overview: Monetary aggregates
MACROECONOMIC OVERVIEW Monetary aggregates Loans to households Mortgage loans Loans to companies (PLN bn, % y/y) (PLN bn, % y/y) (PLN bn, % y/y) Beginning of 2021 brought a continuation of trends from previous quarters. Mortgage loans continued strong growth, while loans to companies and non-mortgag
Slide 33: Ratings and market ratios
RATINGS AND MARKET RATIOS In 1Q21 investors’ sentiment to bank stocks improved markedly Bank Millennium share performance vs. WIG Bank index Banku Millennium shares 40% 35% 30% No of shares: 1 213 116 777 (listed 1 213 008 137) 25% 20% +15.7% Listed: on Warsaw Stock Exchange since August 1992 15% In
Slide 34: Złoty Bankier 2021 – best mortgage loan
Złoty Bankier 2021 (Golden Banker) - Millennium with the best mortgage loan and on the podium in multi-channel quality of service The bank was also awarded for supporting the project as part of corporate social responsibility. 34
Slide 35: Millennium in the top 10 of the most digitally advanced banks in Europe
MILLENNIUM IN THE TOP10 OF THE MOST DIGITALLY ADVANCED BANKS IN EUROPE (*) The best service and technological advancement confirmed by independent rankings and competitions Mobile app and open banking services has The Best Bank in Poland for 2021 Bank Millennium is second in the ranking of been noti
Slide 36: Synthetic P&L account
SYNTHETIC P&L ACCOUNT SYNTHETIC P&L ACCOUNT Pro-forma 1Q20 1Q21 Change Y/Y 4Q20 Change Q/Q PLNmn Net interest income* 690 622 -10% 625 0% Net commission income 195 205 5% 193 6% Other non-interest income ** 37 40 9% 92 -57% Operating Income 921 867 -6% 909 -5% General and administrative costs -465 -
Slide 37: Balance sheet
BALANCE SHEET PLNmn 31/03/2020 31/12/2020 31/03/2021 Change Y/Y (PLNmn) ASSETS Cash and balances with the Central Bank 2 478 1 460 2 361 -5% Loans and advances to banks 2 019 625 605 -70% Loans and advances to customers 72 046 74 088 75 311 5% Amounts due from reverse repo trans. 112 66 24 -78% Debt
Slide 38: Investor relations contact
INVESTOR RELATIONS CONTACT: Head of Investor Relations Katarzyna Stawinoga Tel: +48 22 598 1110 Dariusz Górski e-mail: [email protected] Tel: +48 514 509 925, +48 22 598 1115 e-mail: [email protected] Marek Miśków Tel: +48 22 598 1116 e-mail: marek.miskow@bankmille