bank group London Bank Zachodni WBK is a member of Santander Group.

Transcription

1 bank zachodni WBK group London Bank Zachodni WBK is a member of Santander Group.

2 Bank Zachodni WBK S.A. ( BZ WBK ) 2 Bank Zachodni WBK S.A. ( BZ WBK ) cautions that this presentation contains forward-looking statements. These forward-looking statements are found in various places throughout this presentation and include, without limitation, statements concerning our future business development and economic performance. While these forward-looking statements represent our judgment and future expectations concerning the development of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to: (1) general market, macro-economic, governmental and regulatory trends; (2) movements in local and international securities markets, currency exchange rates and interest rates; (3) competitive pressures; (4) technological developments; and (5) changes in the financial position or credit worthiness of our customers, obligors and counterparties. The risk factors that we have indicated in our past and future filings and reports could adversely affect our business and financial performance. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. Forward-looking statements speak only as of the date on which they are made and are based on the knowledge, information available and views taken on the date on which they are made; such knowledge, information and views may change at any time. BZ WBK does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. The information contained in this presentation is subject to, and must be read in conjunction with, all other publicly available information, including, where relevant any fuller disclosure document published by BZ WBK. Any person at any time acquiring securities must do so only on the basis of such person s own judgment as to the merits or the suitability of the securities for its purpose and only on such information as is contained in such public information having taken all such professional or other advice as it considers necessary or appropriate in the circumstances and not in reliance on the information contained in the presentation. In making this presentation available, BZ WBK gives no advice and makes no recommendation to buy, sell or otherwise deal in shares in BZ WBK or in any other securities or investments whatsoever. Neither this presentation nor any of the information contained therein constitutes an offer to sell or the solicitation of an offer to buy any securities. Note: Statements as to historical performance or financial accretion are not intended to mean that future performance, share price or future earnings (including earnings per share) for any period will necessarily match or exceed those of any prior year. Nothing in this presentation should be construed as a profit forecas

3 AGENDA 3 POLISH ECONOMY MERGER WITH Kredyt Bank TO FORM 3RD LARGEST BANK IN POLAND PERFORMANCE / TARGETS

4 Macroeconomic Environment 4 GDP (real annual growth %) Interest Rate NBP Reference Rate (%) 4,5 4,50 4,25 3,9 3,50 2,7 3,25 1,9 2,50 1,2 End of period (e) 2014(e) Inflation (CPI %) Exchange Rate PLN/EUR 4,3 4,42 2,6 3,7 3,96 4,09 2,1 1,2 2013(e) 4, (e) 4,00 End of period (e) 2014(e) (e) 2014(e) Source: National Bank of Poland, Central Statistical Office, Eurostat, Santander Research

5 Financial System: Credit Evolution 5 Total Loans PLN billion 9,2% Volume Y-o-Y Variation % 901 Loans to Corporations PLN billion 12,1% Volume 263 Y-o-Y Variation % 3,3% 1,6% Jun. 12 Sep. 12 Dec. 12 Mar. 13 Jun. 13 Jun. 12 Sep. 12 Dec. 12 Mar. 13 Jun. 13 Loans to Households (Mortgage Credit) PLN billion 12,0% Volume Y-o-Y Variation % 344 Loans to Households (Consumer Credit) PLN billion ,2% Volume 133 Y-o-Y Variation % -1,3% 3,2% Jun. 12 Sep. 12 Dec. 12 Mar. 13 Jun. 13 Jun. 12 Sep. 12 Dec. 12 Mar. 13 Jun. 13 Source: National Bank of Poland

6 Financial System: deposit Evolution 6 Total deposits PLN billion 10,4% Volume Y-o-Y Variation % 815 6,5% corporate deposits PLN billion ,4% Volume 189 Y-o-Y Variation % 4,5% Jun. 12 Sep. 12 Dec. 12 Mar. 13 Jun. 13 Jun. 12 Sep. 12 Dec. 12 Mar. 13 Jun. 13 household deposits PLN billion 13,1% Volume Y-o-Y Variation % 530 7,6% mutual funds PLN billion Volume 166 Y-o-Y Variation % 28,7%* 7,6% Jun. 12 Sep. 12 Dec. 12 Mar. 13 Jun. 13 Jun. 12 Sep. 12 Dec. 12 Mar. 13 Jun. 13 Source: National Bank of Poland * 20% growth related to net SALES

7 Poland: An Economy with Significant Potential 7 Poland: Attractive Market Offering Continued Growth Evolution of Real GDP Rebased to 100 in Poland Nominal GDP per Capita (US$) 13,965 With Sound Macro Fundamentals Growing Exports US$ bn EU New Member States (excl. Poland) , E Source: EIU as of January 2013 Moderate Inflation Rates 4,3 2,6 2013E 3,7 2014E 2015E CPI, Poland (%) 1, , Source: Central Statistical Office, In-house BZ WBK Research. Improving C/A Balance 18,1 18, (13,3) 2013E Current Account Balance (EUR bn) (2,3) E 13E 14E 15E Source: EIU as of January 2013.Note: EU 15 includes Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, UK. EU New Members includes Bulgaria, Czech Rep., Estonia, Hungary, Latvia, Lithuania, Malta, Romania, Slovakia, Slovenia Source: Eurostat, In-house BZ WBK Research E

8 Poland: Healthy and Growing Banking Sector 8 Long-term Underpenetrated Banking Sector Loans / GDP Penetration (2011) 173% 134% Has Driven Strong Historical Growth... Loans PLN bn CAGR: 16,9% Deposits PLN bn CAGR: 12,1% % % 35% 45% 54% 73% Source: NBP 68% While Maintaining Strong Capitalisation Levels Capital Adequacy Ratio, Polish Banking Sector 14,1% 57% 56% 13,8% 13,2% 13,3% 13,1% 12,1% 11,2% Mexico Indonesia Romania Poland Czech Brasil Hungary Chile Malaysia China EU 15 Republic Source: EIU, World Bank Source: KNF

9 Corporate development 9 Successful execution of historical strategy in attractive Polish banking sector Today s BZ and WBK is a combination of 23 different mergers and acquisitions during the last 24 years Merger of BZ and WBK Successful merger of two medium-sized banks resulted in the creation of larger scale Polish bank achieving significant merger benefits Santander Acquires BZ WBK Continued to execute on BZ WBK stand-alone strategy and leveraging global Santander best practices Merger of BZ WBK and Kredyt Bank Creation of clear Top Tier Player on Polish banking market with complementary businesses and significant growth potential Bank of the Year Poland Bank Zachodni s path of sustainable growth has continued to bear fruit Momentum should be further bolstered by an upcoming merger with mid-sized Kredyt Bank The Banker, November 2012 Best Bank Poland Momentum player BZ WBK now reaping the benefits of its association with Santander in the form of improved cost efficiency and risk management Euromoney, July 2012 Polish Company of the Year It is a very important award, especially in terms of the merger that started last year and which, for many investors, seemed to be an obstacle in terms of sustaining former effectiveness. Meanwhile, Bank Zachodni WBK generated very good financial results in 2013 for 1H and the share price beat a historic record. Economic Forum in Krynica ( Polish Davos ), September 2013

10 Historical Performance NET PROFIT Return on Equity Net profit - Rebased to 100 in 2004 ROE BZ WBK Peers Median 30% BZ WBK Peers Median 350 Net Profit CAGR ( ): 16% 25% 300 BZ WBK Avg. ROE: 21.1% % Net Profit CAGR ( ): 12% 15% Peers Avg. ROE: 14.9% % Source: Company information BZ WBK for FY 2012, Peers based on 9M12 annualised results. Peers include PKO BP, PEKAO, Handlowy, BRE, ING Slaski, Millennium (Polish banks with market capitalisations above PLN5.5bn). Notes: 1. Annualised net profit attributable to the shareholders (4 consecutive quarters) to the quarterly average of equity calculated based on total equity at the end of five consecutive quarters, net of the current period profit, non-controlling interests and dividend due to shareholders. ROE for BZ WBK for 2011 excluding one-off adjustment.

11 Merger with Kredyt Bank 11 The merger has resulted in the establishment of the third largest bank in Poland with regard to assets, loans and deposits The first with regard to to the market potential thanks to the strong and stable strategic investor, Banco Santander according to market analysts and customer feedback, the merger is viewed as being smooth, professionally executed and causing no disruption

12 Clear Strategic Vision 12 key strategic pillars strategic vision Superior historical performance based on clear strategic vision Successful execution of simple business model focused on solid capital position, liquidity and profitable customer segments Leading Customer Service Leading Employee Satisfaction Integration of KB provided critical mass in a fragmented market with clear growth potential Clear benefits & synergies from being part of the Santander Group Diversified Income Generation The leading banking in poland Continued Strong Risk Management Attractive operating environment to fuel further growth At the cutting edge of technological advanced banks. Best in Class Efficiency Best in Class Profitability

13 network before and after merger 13 BZ WBK Stand-Alone Branch Network BZ WBK network: 519 branches and 109 franchise based branches BZ WBK Branch Network after merger Agregated network: 836 branches and 108 franchise based branches Zachodnio- Pomorskie Szczecin 23 Lubuskie Wroclaw Dolnośląskie 92 Poznań 32 Pomorskie 30 Wielkopolskie Opolskie 19 Kujawsko- Pomorskie 25 Śląskie Gdańsk Łódź Warmińsko- Mazurskie Mazowieckie Łódzkie 7 Częstochowa Świętokrzyskie Warsaw Kraków 7 6 Podlaskie Lublin 7 Lubelskie Podkarpackie GDP per capita by region ( 000 PLN) BZ WBK franchise branches Małopolskie Source: Polish Central Statistical Office 2012, Company information. Low level of branch overlap in traditional BZ WBK markets Limited overlap in the West Significant penetration in most attractive regions (Central Poland) Building new relationships in the East

14 Merger Benefits of PLN 465mn 14 Fully Phased Pre-Tax Synergies: PLN 465mn Fully Phased Pre-Tax Synergies (PLN mn) Cost Synergies: c. PLN 340mn before tax (c. 12% of 2011 aggregated cost base) Revenue Synergies: c. PLN 125mn before tax (c. 2% of 2011 aggregated revenue base) Phase In Cost Synergies (PLN mn) c. 175 c. 220 c Year 1 Year 2 Year Revenue Synergies (PLN mn) c. 60 c. 125 c. 10 Year 1 Year 2 Year 3 Integration Expenses Operational Integration IT/ Com. Note: 1. Includes amortisation. Marketing Other Property Cost Revenue Operations 1 Synergies Synergies Total Integration costs estimated to amount to c. PLN 430mn before tax of which PLN 300m will be spent by y/e 2013 Capital expenditure of c. PLN165mn before tax

15 Merger Benefits significantly lower administration costs 15 M PLN Cost increase resulting from business growth (1,5% y/y, w/o costs synergies) 50m Headcount has been decreasing since the Merger announcement Costs development with synergies m 257m PLN % OPEX synergy triggers Preemptive pre-merger optimization of OPEX in KB: Lower marketing expenses No IT systems change Reduced other OPEX * local view operational costs / costs w/o Bank Guarantee Fund and legal cases completed contract renegotiations Expenses Management Policy Marketing costs optimization Optimization of branch network and Headquarters rental expenses Reduction in IT spending due to systems decommissioning Operational expenses optimization Streamlining processes Merger announcement Reductions so far August 2013

16 Merger Plan on target 16 Legal merger completed on 4th January, 2013 Revised organisational structures in place Process harmonisation & increased productivity Rebranding of all branches supported by marketing campaign Continuous focus on meeting Revenue & Cost Synergies end-2014 Customer Data migrated to BZ WBK / Full integration end-2014

17 Bz WBK A Market Leader in Banking 17 Customer Segments Distribution Network Individual Customers Affluent Wealth Management, VIP, Potential VIP Branch Network 836 Branches 108 Agency Outlets Leader on the market Constantly improving market share / positioning 3.8mn clients SME Customers 273k clients Mass Market Prestige, Universidades, Lower Mass Market Companies Premium Classic Mobile Sales Internet Mobile Banking Call Centre ATM Intermediaries 115 Mobile Sales agents C. 2.75mn retail & SME users > active customers - best ratio in PL Inbound / outbound service & sales with 260 FTEs Nationwide ATMs >3,000 product related intermediaries Experience Running an effective and profitable business Best-In-Class customer service standards

18 Bz WBK A Market Leader in Banking 18 Customer Segments corporate banking Business & Corporate Banking (Turnover: PLN 30mn-1bn) 7,0k clients property 0,2k clients Large corporate (Turnover: >PLN 1bn 0,2k clients Products Offered Transactional banking products Bank accounts Domestic and crossborder payment services Electronic banking products Letters of credit Credit products Investment and working capital financing products Technology loans Treasury products and hedging services Leasing Factoring Consistent client coverage through countrywide footprint State-of-the-art client servicing quality with comprehensive product offering Ambitious growth plan with identified objectives and strategy GLOBAL BANKING & MARKET Local Capabilities Enhanced Based on Santander Expertise Implemented in 2011 in BZ WBK, Global Banking & Markets is responsible for enhancing the offering to the largest corporate customers offering more sophisticated products drawing on skills and expertise of Santander Servicing 26 Polish large corporates representing 550 customers 1 Leverage BZ WBK s state-of-the-art cash management platform Products written locally and held on BZ WBK balance sheet Strong contribution to financing of assets 1) As of December 2012 including international subsidiaries.

19 BZ WBK Today Third largest bank in Poland Balance Sheet BZ WBK Features Branches Agencies BZ WBK as at Total 836 ATMs Franchise branches as at Total 108 Employees 12.8 k Corporate Banking Centre 12 P & L Income PLN m Assets PLN m Costs PLN (1 406) m Gross Loans PLN m PBT PLN 997 m Deposits PLN m ROE 13,8%* * Excluding Integration Costs

20 BZ WBK - modern and innovative Leading credit cards, debit and prepaid cards issuer in Poland - over 3,6 m cards issued Issuer of the first PayPass, city card and school card in Poland First implementation of non-contact cards in Central Europe Leader in electronic banking + over 2 m users of BZWBK24 Leader of mobile banking - BZWBK24 mobile And soon: TV banking 20

21 Strong marketing campaigns 21 Strong marketing campaigns supported by well known celebrities Kevin Spacey, new face of the bank

22 H1 results: LOAN PORTFOLIO AND DEPOSITS 22 Loan Growth driven by Cash Loans, SME and Business Loans PLN m Mortgage Other Personal Total Personal Business Total Gross Loans Mar. 13 Jun. 13 * Due to sale on personal NPL Active Management of Deposits Mar. 13 Jun. 13 Business Retail Demand Savings Time depostis Customer Depostis Q-o-Q Variation 1,2% -2,3%* 0,3% 4,7% 2,6% Q-o-Q Variation 6,3% 11,5% -14,0% -3,3% Comments Y-o-Y performing deposits (like for like basis): Cash Loans +11% SME +5% Business Loans +7% Mortgage Loans +1% Comments Y-o-Y performing loans (like for like basis): Total Deposits -3% Y-o-Y, Retail Deposits -5% Y-o-Y, Business Deposits +2% Y-o-Y, Mutual Funds +20% Y-o-Y Loan / Deposit ratio at 93,6%

23 H1 results: Net Interest Income and Net Fees 23 Net Interest Income improvement due to focus on margin and product mix PLN m Comments NIM by Q, % 4,32 4,34 4,40 3,36 3,54 2Q 12 3Q Q 13 5,8% 4Q Q 13 Net Interest Income + 1% Y-o-Y (on a like for like basis) Close management of funding costs Continued focus on product mix and credit margins Management of NIM by active reduction in deposit rates in line with the market environment and re-alignment of the exkb depoit rates to BZ WBK levels BZ WBK provides one of the best margin levels in peer group banks 3,12 (ProForma NIM) 1Q 13 2Q 13 Merged Bank Fees growth driven by Fx Fees and ebusiness & Payments 1Q 13 2Q 13 Q-o-Q Variation ebusiness & payment Investment banking 1 Current account & money transfer FX fees Loan fees Insurance fees Other 2 Total Comments Y-o-Y performance (like for like) basis: Net Fees +2% Y-o-Y FX fees supported by market environment; E-Business & Payments increase due to higher transactional activity 3,1% -3,6% 0,0% 19,0% -1,8% 0.0% 37,5% 4,0% 1. Brokerage fees, distribution and management fees 2. Includes off-balance sheet guarantees commissions, issue arrangement fees, credit card fees, structured product fees and other.

24 H1 results: Expenses and Cost of risk 24 Excellent Cost Management at - 7.2% Y-o-Y provision charge % 1Q 13 2Q 13 Q-o-Q Variation Provisions and Annualised total credit loss ratio Staff costs ,4% PLN m 1,11% 1,09% Administrative Expenses Amortization and other costs ,5% -22,2% Underlying costs ,0% 1Q 13 2Q 13 Integration costs ,3% Provisions Annualized total credit loss ratio Total ,4% npl % coverage ratio % Comments Underlying costs -7.2% Y-o-Y (on a like for like basis), and lower 2% q/q Merged bank FTE s lower by 1.6k vs. Dec 2011, 660 FTE s in 2013, Excellent cost management across all cost lines, integration costs in line with assumptions Savings in operational costs will continue into 2H 2013 many contracts activating in the next quarters. The coverage rato reduced from 57.6% 51.30% to due to NPL sales and the impact of the movement of colateralised cases to NPL status 7,60% 1Q 13 8,20% 2Q 13 57,60% 1Q 13 51,30% 2Q 13

25 H1 results: Net profit 25 Net Underlying Profit of PLN 923m PLN m %* 516 Profit before Taxes Taxes 1Q Q Q-o-Q Variation 9,5% -1,1% Net profit ,1% Integration costs ,3% 1Q 13 2Q 13 Net profit excluding integationcosts ,8% * Excluding an annual dividend of PLN 50m received in Qtr 2 the underlying Net Profit Q-o-Q increase is 14% Attributable profit ,0% Comments Net profit excluding integration costs + 9.6% Y-o-Y (on a like for like basis). Very good results despite the challenging business and interest rate environment in 2Q Very effective cost management through ongoing efficiency measures and the execution of the merger plan. The savings will be more evident in future quarters. Good performance on the provision line. Very good position for the future performance of the merged bank.

26 H1 results: Key Indicators 26 Cost / Income % Solvency Ratio % ROE % 46, , , % LOWER Y-O-Y Core Tier 1 Ratio at 11,9% 1% HIGHER Y-O-Y

27 Driving Sustainable Earnings Growth Off a Larger Platform 27 Continued outperformance Operational excellence Bring Kredyt Bank to BZ WBK standards Leverage customer base and cross-sell potential The Leading Bank in Poland Merger Benefits

28 Drivers for Earning Growth 28 Leverage Tier 1 position and brand to increase market share Revenues Improve market share across key target products Increase of Productivity in exkb network Costs Sustain market beating level of cost efficiency with combined entity Successful integration of KB and realisation of synergies BZ WBK has a unique combination of drivers to continue delivering superior growth Capital and Risk Management Utilise strong capital and liquidity position Maintain strong asset quality

29 Mid-Term Targets 29 Mid-Term Targets RoAE (%) High teens Total Capital Adequacy Ratio Above 13.5% Cost / Income Ratio (%) Low 40s over the next months Asset Quality Better than market average Net Loan / Deposit Ratio Below 97% Dividend Payout Ratio Policy 50% Deliver significant earnings growth