BANK HANDLOWY W WARSZAWIE S.A. Summary of 2010: Strategy and Initial Results. February 2011

Transcription

1 BANK HANDLOWY W WARSZAWIE S.A. Summary of 2010: Strategy and Initial Results February 2011

2 Net profit for 2010 exceeding rising market expectations 100 Average target price in respective quarter PLN Citi Handlowy share price (PLN) PLN (PLN MM) PLN 88.1 PLN Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 (PLN MM) 718 (PLN MM) 755 (PLN MM) - Average forecast of net profit in 2010 in a given period - Net profit of Citi Handlowy for

3 Strategy The first step of implementation 9% 13% ROE >20% Corporate demand deposits (PLN billion) % Gross profit from innovations 10.0% 9.5% Improvement of quality perceived by customers 80% 74% % C/I 53.7% <50% Retail demand deposits (PLN billion) % New client segmentation PLATINUM GOLD BLUE WHITE 2012 Loans/Deposits <100% 58% 57% 300 Number of customer touchpoints 1,451 3,000 High service standards Speed Safety Transparency Flexibility

4 Significant increase of net profit in 2010 PLN million 600 Net profit - Citi Handlowy 32% +26% VAT return % Net profit - banking sector (PLN billion) 39% -22% % ROE 2008 ROA 43% 56% 12.8% 1.9% 8.9% 8.2% 9.0% 1.2% 0.8% 0.9% Citi Handlowy Banking sector 4

5 Stable increase of revenue and operating margin Revenue (PLN million) Operating margin (PLN million) 2, , % 2, % 1,985 2,066 2, ,070 1, Core revenue Other revenue Another year of revenue increase Increasing share of core revenue (net interest income, fees and commission income) Increase of operating margin result of increasing revenue and maintained cost discipline Data excluding one-off VAT return for 2009 results. 5

6 High levels of interest margin maintained in % 3.5% 3.7% 3.8% Interest margin on total assets Increase of interest margin in 2010 PLN million 1,505 1, % Margin on interest assets 1,366 One of the highest margins in the sector 12% 2008 Net interest income Interest margin Interest margin - banking sector 1 Costs of non-financial sector deposits Decrease of cost as compared to Sector interest margin for 2010 calculated basing on annualized data after three quarters 6

7 Kredyty Loans pierwsze signs oznaki of rebound ożywienia Corporate loans PLN billion % Sector: -1% 6.2 1% Sector: -1% % Increase of corporate loans in the 2 nd half of 2010 An increase despite a negative trend in the sector 4Q09 1Q10 2Q10 3Q10 4Q10 Retail loans % 1% Decrease of retail loans in 4Q of 2010 PLN billion Sektor 1 : 0% Sektor 2 : 7% 4Q09 1Q10 2Q10 3Q10 4Q10 Result of tightening credit criteria in cash loan market 22% Increase of mortgage products to PLN 319 million in 4Q of Increase of loans excluding mortgage loans 2 Increase of mortgage loans 7

8 Deposits focus on operating accounts Corporate deposits Number of accounts 14,215 Volumes 3% 14,688 thousand % 2.2 PLN millions 8,149 6,066 25% 7,097 7,592 Operating accounts Retail deposits Number of accounts 6,336 Volumes 10% 5,718 thousand % PLN millions 4,800 3,876 1,536 20% 1,842 Operating accounts Operating accounts Corporate banking: accounts of customers that transfer through them 30-50% of operation volumes.; Retail banking: number of accounts with minimum monthly inflow of PLN 1.5 thousand 8

9 Increasing net fee and commission income Net fee and commission income 71% (2010/2009) Brokerage DMBH market share: 15% Value of equity turnover Market position # 1 6% 50% PLN million % 655 (2010/2009) Credit and debit cards Citi Handlowy market share 1 : 23% # 1 Transactions value % (2010/2009) Custody Citi Handlowy market share: 43% Value of assets under custody # 1 1 Data for 3Q

10 Treasury increase of revenue and innovations for customers Treasury I/(D) (PLN million) CFX Pulse the new generation electronic platform Income on customer activity Doubled revenue from online FX 1Q 09 2Q 09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 transactions Proprietary management 1Q 09 2Q 09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 Pro forma data, scales on charts are not comparable 10

11 Cost discipline maintained despite expansion of business General administrative expenses and depreciation Number of contact points ~300 1,451 PLN million 1,496 7% 1,384 1, Cost/Income Change (y/y) Corporate Banking 45% 43% 1% Branches 154 Shopping malls 18 Airports 5 ZTM points 24 Petrol stations 23 Partnership points 169 ATM s 1,058 Remote distribution channels Retail Banking 71% 67% Bank 1 Excluding one-off VAT return 56% 54% 660 thousand users 25 thousand users 11

12 Cost of risk decrease in 2010 Net impairment losses Credit portfolio quality ,6% /PLN million/ (30) 54% ,1% Cost of risk (%) Retail Banking FX Options Corporate Banking /PLN billion/ Performing loans Non-performing loans Net impairment losses (PLN millions) Corporate Banking Retail Banking 2009 (294.3) (251.5) (269.8) Change (y/y) NPL ratio Corporate Banking Retail Banking Non-financial sector % 9.1% 11.9% % 12.9% 11.8% Change (y/y) Retail Banking: Risk of credit card and cash loans portfolio remaining high, passed the peak gradual decrease in net impairment losses in the following quarters of 2010 Corporate Banking: Lower credit risk due to improved financial situation of customers 12

13 New client segmentation focus on full customer relationship GOLD SELECT PLATINUM Retail Banking GOLD GOLD Corporate Banking BLUE BLUE WHITE 47% 39% vs. 66% vs. 51% Clients share in segment WHITE 13

14 Innovation new solutions for the Polish market Factoring new options: reversed factoring public sector factoring factoring plus First bank issuing contactless cards in branch S 2010: 9.5% gross profit increase 16.7% margin increase Leader in mobile banking already 25 thousand users The new generation electronic FX platform Investment in the future with a goal of creating innovative solutions that will improve clients satisfaction level First in Poland integrated payment and City Travelcard 14

15 INVESTMENT BANKING: Citi Handlowy participating in key transactions in Poland #3 on M&A market The only complete offer of global investment banking in Poland based on four pillars New investment banking team in Warsaw Leader in corporate banking #1 on the market Accelerated sale of 10% equity Accelerated sale of 10% equity IPO Sale of 16.05% equity 15

16 Development of remote channels Implementation of new version of Citibank Online internet banking HIGH OF TELEPHONE SERVICES CITIPHONE CONSTANT INCREASE of the number of Citibank Online users 660 thousand Waiting time for consultant 12.6 seconds Launch of special line for Citigold 557 thousand Waiting time for consultant 5.6 seconds 2010 Result: 9.5% gross profit increase from innovation 16

17 Development of remote channels Citi Mobile lite version since may 2010 Cumulative number of unique Citi Mobile (lite) users Citi Mobile application 30,000 25,000 20,000 15,000 10,000 5,000 3,957 7,060 9,741 12,103 14,064 17,073 20,071 25,242 0 MAY JUN JUL AUG SEP OCT NOV DEC Total number of logons to Citi Mobile in December 2010 amounted to 862,257 Number of clients that used CM from May 10 to December 10 25,242 Number of active users in December minimum one logon 10, Result: 9.5% gross profit increase from innovation 17

18 Citi Handlowy first bank in Poland offering instant issuance of contactless cards Branch of other bank Central database Central card personalisation Card delivered to branch Waiting time for a personalized card: A few days Debit Credit Card Card Waiting time for contactless Citi Handlowy debit card: 2 minutes Citi Handlowy branch Waiting time for Citibank credit card: 20 minutes 2010 Result: 9.5% gross profit increase from innovation 18

19 Citi Handlowy first Bank in Europe, which developed and implemented the technology for integrating payment card with city travel card ~7 thousand Integrated Citibank Payment and City Travelcards issued + = Warsaw Travel Card Payment Card CItibank Payment Travel Card 2010 Result: 9.5% gross profit increase from innovation 19

20 High service standards Corporate Banking Trade helpline Individual Clients Over 50 ATM s friendly for people with sight impairment Information helpline for transaction financing products Client Friendly procedures Dedicated and 74% Of clients rated service quality higher Optimal processes Best Individual clients Consultant will automatically contact and support Citigold client in case of problems with login to Citibank Online Individual clients Dual-service ATM s allowing both withdrawal and deposit of cash - with online booking function Increased time dedicated to understanding client needs Experienced employees products on the market New client segmentation Individual clients A La Carte program 20

21 Building value Citi Handlowy leader of growth Citi Handlowy share price as compared to WIG-Banks index Return on investment in Bank shares in Citi Handlowy 34% 5% 39% 95 The Bank s share price increase by 34% (WIG Banks 18%) Bank 1 24% 24% Share Price (PLN) Announcement of strategic directions of development for Bank 2 Bank 3 Bank 4 Bank 5 Bank 6 14% 5% 19% 17% 17% 13% 2% 15% 15% 15% 11% 2% 13% 70 Bank 7 3% 65 Dividend day (div yield 4.8%) Bank 8 2% 60 12/ / /2010 Citi Handlowy 03/ / / / /2010 WIG Banks 08/ / / / /2010 Share price increase Bank 9-16% -16% Dividend yield -25% -15% -5% 5% 15% 25% 35% 21

22 Citi Handlowy priorities for 2011 Implementation of strategy for years continued Volumes focus on loan increase: (Corporate double digit increase; Retail double digit mortgage loans and credit cards as engine of growth) Operating accounts: increase in the number of operating accounts (both retail and corporate) Investment banking: participation in key transactions on capital markets Quality: 80% of clients noticing positive change Innovation: 10% increase of gross income from innovation 22

23 Appendix Sector: quarterly decrease of corporate volumes and marginal increase of retail 35% 30% 25% 20% 15% 10% 5% 0% -5% -10% -15% Corporate loans - Change y/y Q/Q: -1% 80% 70% 60% 50% 40% 30% 20% 10% 0% Household loans - Change y/y Total Mortgage loans Cash loans Kw/kw: +4% 12' ' ' ' ' ' ' ' ' ' % Corporate deposits - Change y/y 30% Household deposits - Change y/y 14% 12% 10% 8% 6% 4% 2% Q/Q: +9% 25% 20% 15% 10% 5% Q/Q: +4% 0% 0% 12 ' '