2013 preliminary consolidated financial results. February 10th, 2014

Transcription

1 BANK HANDLOWY W WARSZAWIE S.A preliminary consolidated financial results February 10th, 2014

2 Summary of 2013 in Citi Handlowy t (PLN MM) Net profit Record consolidated d net profit since the Bank s debut on the WSE PLN MM Restructuring provision PLN 62.4 MM Business vo olumes FX turnover Volume +11% YoY SME /MME Segment Loans +9% YoY Demand deposits Individual clients +11% YoY Trade finance Assets +21% YoY Credit cards Cards acquisition +28% YoY Assets under custody Market share Client acquisition in 2013 Corporate clients Factoring turnover Loans Market share 36% (+8 p.p. p YoY) 525 clients +20% YoY +26% YoY +3% YoY 49% (+3 p.p. p YoY) Volume +20% YoY Inn novation & qu uality Transform to innovate Smart Banking Ekosystem development Focus on quality - #1 in Gold segment in the independent NPS research Branches transformation: Smart branches opened in Katowice and Warsaw in Further openings in Wrocławł and Poznań in 1Q % Efficiency & quality: 15 minutes to open an account with a Bank 1 Bank 2 Bank 3 Bank 4 Bank 5 debit card vs. 45 minutes in the traditional branch; 45 minutes to issue a credit card (120 minutes in the traditional branch) 70-80% of transactions offloaded to self-service channels Digitization: CitiHandlowy for ipad; new innovative investment 4% platform CitiFX Pro, new partners in FotoKasa in January % 11% 19% Play and Energa Source: TNS Poland research for Citi Handlowy. NPS NPS Relative 2

3 Corporate Banking leader in strategic areas tion Banking Transact Cash management Trade finance products development consistent growth of demand deposits (PLN B) factoring turnover growth (PLN B) Strategic focus on operating accounts % 26% Sector: 11% 11.4 #2 in Poland in the ranking of transaction banking Euromoney Cash Management Survey Factoring products and technology solutions development (Citi Trade Portal platform) 241 global companies investing with Citi Handlowy in Poland 31 Polish companies investing with Citi Handlowy all over the world Markets pions Emerging Champ Canada USA Latin America Sweden Germany Netherlands UK France Italy Near East East Europe Taiwan Oceania Japan USA Mexico Brasil UK Germany France Italy Sweden UAE China India Singapore Malaysia East Europe Hong Kong Thailand #1 in equity turnover on the WSE Brokerage houses share in session trades in 2013 #1 in the value of capital raised (ECM)* Key transactions on the capital market in 2013 #1 in non-treasury bonds turnover on all Catalyst markets in 2013 Capital mark kets 13% -4% -4% -4% -6% -8% -8% -9% -9% -9% BH 1 BH 2 BH 3 BH 4 BH 5 BH 6 BH 7 BH 8 BH 9 Market share Relative market share Accelerated book-building Global Coordinator PLN 5.2 B -January Accelerated book-building Joint Bookrunner PLN 3.7 B -February Secondary Public Offerring Global Coordinator PLN 4.9 B -March Initial Public Offering Joint Bookrunner PLN 2.4 B -December Market share Turnover volume 3 * In the ranking of Bloomberg and Dealogic.

4 Retail Banking restructure to innovate Consistent growth of demand deposits (PLN B) Innovative solutions for clients global services Relationsh hip Banking Focus on active clients : Number of Gold clients 25% YoY Forward clients acquisition 84% YoY 4.8 CitGold global status recognition 23% Global citizen X-border account opening 2013 Sector: 18% Citi Global Transfers Outgoing Global traveller Global investor Free ATM withdrawals overseas CitiGold global access 2013 Debit card linkage to EUR/USD/GBP 2013 Dealer FX (available on phone) 2013 Citi FX Pro 2013 Offshore funds with investment advisory Services launched in 2013 Services launched before 2013 Credit cards acquisition structure proactive activities in response to regulation changes Leading position maintained share in credit cards market Credit ca ards 1Q Q 2013 Target % 46% 54% 95% #1 #1 #3 30% 70% 22% 20% 13% Market position Co-branded cards Plain vanilla credit cards Transactions' value Loans' value Number of cards t Banking Eco osystem Smart Branch Banking Unsecured lending Credit Cards Transformation towards innovative banking model Eitf Exit from 55locations outside the target markets Branches as a main sales channel Main acquisition channel: 3 sales agencies Exit from 19 locations outside the target markets Sales centralization and proccess optimization Sales diversification: growth of the number of agencies to 11 Smart Banking Ekosystem (25 Smart branches) Online loan proccess implementation Acquisition realised by agencies and Smart branches Clients acquisition in Smart branches Smart branch Traditional branch NTB ratio* 57% 11% OTB ratio** 43% 89% * New to bank customers ** Old to bank customers 4

5 Another year of solid net profit Net profit(pln MM) Key financial ratios in 2013 Bank Sector % Sector: -0.3% 1,022 Excluding Including provision of provision of PLN 62.4 MM PLN624MM 62.4 ROA 2,7% 2.3% 2.1% 1.1% ROTE 22,2% 20.0% 19.0% 10.5% ROE 17,9% 16.0% 15.3% 10.3% Cost/ Income Loans/ Deposits 48,8% 51% 54% 53% 73% 64% 64% 108% Tier % 17.5% 14.2% NPL 70% 7.0% 70% 7.0% 75% 7.5% * 2013 net profit presented excluding restructuring provision * NPL for the sector based on NBP data as at November, 30, 2013 High efficiency of the Bank ratios better than the sector and strategic targets 5

6 Net profit in 2013 vs % Sector: -0.3% /PLN MM/ 17% Sector: -4% 9% Sector: -1% Sector: -20% % Sector: -2% 1% Sector: -10% , Net interest income Net fee & Treasury Other net Expenses Net Tax commission revenues impairment and income losses other

7 Net interest income reflecting interest rates decrease Central Bank reference rate Net interest margin (NIM) - Bank vs. sector 4.75% -47% 2.50% Citi Handlowy Sector 4.4% 3.7% 2.7% 3.4% 3.2% 2.9% 2.7% 2.4% 2.4% 4Q Q Q Q Q 2013 Net interest income (PLN MM) -17% Sector: -4% 1, % 1, IV Q I-III Q NIM on total assets NIM on interest-bearing assets NIM on total assets Slowdown in negative dynamics of net interest income in 4Q 2013 (-15% YoY and -3% QoQ) The decrease of Bank s net interest income in 2013 vs significantly lower than interest rates reduce Net interest margin still significantly above the market despite the decline to 2.7% 7

8 Customer volumes Growth in loans in the environment of limited demand for financing /PL LN MM/ 6,949 Institutional non-banking customers loans +43% 9,608 Sector: +25% 10,961-9% Sector: +3% 9,948 34% 37% 27% Other SMEs & MMEs (+9% YoY) Global Clients (-12% YoY) Corporate Clients (-2% YoY) /PL LN MM/ Individual customers loans -0.7% Sector: +15% +0.4% Sector: +4% 5,322 5,111 5,260 5,283 20% 38% 40% Mortgage loans (+15% YoY) Cash loans (-9% YoY) Credit cards (+3% YoY) /PLN MM/ Significant growth in deposits as a result of focus on operating accounts Institutional non-banking customers deposits Individual customers deposits +7% +21% Sector: +16% +8% Sector: +31% +17% 17,848 17,919 17,734 9,520 9,427 8,286 Sector: +5% 19,178 7,806 Term deposits (-6% YoY) /PLN MM/ 5,718 5,982 5,896 1,397 1,246 1, % Sector: +6% 6, Term deposits (-8% YoY) 8,329 8,492 9,448 11,372 Demand deposits (+20% YoY) 4,321 4,737 4,836 5,932 Demand deposits (inc. saving accounts) (+23% YoY)

9 Net fee & commission income increase driven by the capital markets Net fee & commission income (PLN MM) +7% Sector: -2% +12% IV Q Corporate Banking +18% YoY Transaction Banking, incl. trade products -4% YoY Other, 47% including M&A advisory 4% +81% YoY Custody +18% YoY 28% 21% Brokerage +123% YoY I-III Q Retail Banking -0.6% YoY Investment & insurance products +15% YoY 44% 48% Credit cards -10% YoY Other -5% YoY 7% 2% Cash loans -23% YoY Mainly due to lower interchange level 9

10 Treasury Treasury result (PLN MM) +1% Sector: -10% % 105 Result on customer operations IV Q I-III Q IV Q Result on the interbank market operations I-III III Q IV Q I-III Q Including sale of AFS: #1 on the market in the ranking of Euromoney Note: The scales on the graphs are not comparable. #1 on the market #1 on the market in the contest of Ministry of Finance in the category of FX turnover with corporate clients with 36% market share is the most common electronic FX platform on the market to act as Treasury Securities Dealer 10

11 Consistent cost control Expenses and depreciation (PLN MM) Expenses and depreciation (PLN MM) by type -5% 1, % -9% (excl. provision) Sector: -1% 1, ,430 1, Restructuring 112 provision Change YoY -3% -12% -9% -13% 12% Depreciation Other Premises External services IT & Telekom. 314 Restructuring 720 provision % Staff expenses IV Q I-III Q The YoY decrease in Bank s expenses mainly due to: the branch network optimization and employment restructuring (the decrease in staff and premises expenses) lower external services spending and lower depreciation expenses Cost / Income ratio at 51% for 2013 (excluding restructuring provision) 11

12 Further improvement in credit risk (10) (25) (40) (55) (70) Net impairment losses (PLN MM) (28) (26) (30) (58.1) Corporate Banking Retail Banking Non-performing loans ratio (NPL) 12.6% 11.5% 11.1% 7.5% 6.7% 7.0% 5.1% 5.1% 4.9% 2.6% 2.0% 0.9% 4Q Q Q Q Q 2013 Bank Corporate Banking Retail Banking Financial Sector Provision coverage ratio Another year of retail portfolio quality improvement 2013 cost of risk significantly better than the sector (0.3% vs -0.9% in the sector) Two sale transactions of impaired portfolio of credit cards and cash loans in 2013: 88% 80% 67% 85% 83% 80% 80% 72% 74% 2Q 2013 portfolio value of PLN MM impact on P&L of PLN 23.3 MM 4Q portfolio value of PLN 99.3 MM impact on P&L of PLN 10.2 MM 4Q Q Q Q Q 2013 Bank Corporate Banking Retail Banking 12

13 Change in Bank s share price in the latest 12 months horizon Citi Handlowy s share price vs. main indices Return on investment in the Bank s shares +23% (an increase in the Bank s share price of 16% + 7% DY) (WIG20 decrease of 2%) Share price (PLN) Citi Handlowy WIG June 20: Management Board s decision on dividend payout at the level of 75% from 2012 net profit July 5: dividend day Note: The latest listing as of February 7, 2014 (Citi Handlowy: PLN ) Dividend payout ratio Dividends paid by Citi Handlowy since its debut on the WSE % 31% 39% 64% 100% 100% 100% 100%* 80% 86% 77% 0% 94% 100% 50% 75% Dividend yield 3.1% 1.9% 3.8% 1.7% 2.3% 2.6% 3.1% 18.7% 5.6% 5.8% 4.5% - 7.1% 7.1% 3.3% 7.1% 13 * Payout ratio related only to 2004 net profit, excluding special dividend

14 Appendix

15 Income statement Bank 2013 vs Q12 1Q13 2Q13 3Q13 4Q13 PLN MM PLN MM % Net interest income (246) (17%) Interest income (430) (21%) Interest expenses (145) (115) (102) (96) (91) (588) (404) 184 (31%) Net fee and commission income % Dividend income (2) (32%) Gains on AFS debt securities % FX and trading (23) (6%) Result on fair value hedge accounting Treasury % Net gain on equity investment instruments Net other operating income (5) 9 0 (1) (9) (18) (0) 18 (99%) Revenue (180) (7%) Expenses (300) (331) (318) (296) (357) (1 365) (1 302) 63 (5%) Depreciation (15) (13) (13) (17) (19) (65) (63) 2 (3%) Expenses and depreciation (315) (345) (331) (313) (376) (1 430) (1 365) 65 (5%) Operating margin (115) (9%) Net impairment losses (1) (10) 29 (2) 19 (58) Share in subs' profits 0 (0) (1) (1) (2) - EBIT (21) (2%) Corporate income tax (85) (84) (75) (40) (46) (269) (245) 24 (9%) Net profit % C/I ratio 49% 43% 49% 60% 68% 52% 54% 15

16 Corporate Banking income statement 2013 vs Q12 1Q13 2Q13 3Q13 4Q13 PLN MM PLN MM % Net interest income (134) (19%) Interest income (294) (25%) Interest expenses (116) (86) (74) (74) (72) (466) (306) 160 (34%) Net fee and commission income % Dividend income (1) (47%) Gains on AFS debt securities % FX and trading (20) (6%) Result on fair value hedge accounting Treasury % Net gain on equity investment instruments Net other operating income % Revenue (62) (4%) Expenses (162) (156) (135) (129) (139) (628) (560) 69 (11%) Depreciation (7) (7) (6) (6) (6) (30) (26) 4 (14%) Expenses and depreciation (169) (163) (142) (135) (146) (658) (585) 73 (11%) Operating margin % Net impairment losses (4) (14) (7) 3 (8) (28) (26) 2 (7%) Share in subs' profits 0 (0) (1) (1) (2) - EBIT % C/I ratio 45% 30% 34% 50% 47% 41% 38% 16

17 Retail Banking income statement 2013 vs Q12 1Q13 2Q13 3Q13 4Q13 PLN MM PLN MM % Net interest income (112) (14%) Interest income (135) (15%) Interest expenses (30) (28) (28) (22) (19) (122) (98) 23 (19%) Net fee and commission income (2) (1%) Dividend income (1) (21%) FX and trading (3) (8%) Net other operating income (6) (5) (5) (6) (12) (27) (27) (0) 1% Revenue (118) (10%) Expenses (138) (175) (183) (167) (218) (737) (742) (6) 1% Depreciation (8) (7) (7) (11) (12) (35) (37) (2) 6% Expenses and depreciation (146) (182) (189) (178) (230) (772) (779) (8) 1% Operating margin (126) (35%) Net impairment losses (5) 27 (30) EBIT (34) (10%) C/I ratio 53% 70% 73% 71% 93% 68% 77% 17

18 Balance sheet End of period PLN B 4Q12 1Q13 2Q13 3Q13 4Q13 4Q13 vs. 3Q13 4Q13 vs. 4Q12 Cash and balances with the Central Bank (1.7) (68%) (0.6) (43%) Amounts due from banks % % Financial assets held-for-trading (0.7) (10%) (1.1) (16%) Debt securities available-for-sale % % Customer loans (1.6) (10%) (1.0) (6%) Financial sector entities (1.3) (65%) (0.2) (23%) Non-financial sector entities (0.3) (2%) (0.8) (5%) Corporate Banking (0.3) (4%) (0.8) (8%) Retail Banking % 0.0 0% Credit cards % 0.1 3% Cash loans (0.1) (4%) (0.2) (9%) Mortgage loans % % Other assets (0.8) (24%) (0.1) (6%) Total assets (1.9) (4%) 1.9 4% Liabilities due to banks (1.2) (16%) % Financial liabilities held-for-trading (1.2) (23%) (1.6) (28%) Financial liabilities due to customers % (0.3) (1%) Financial sector entities - deposits (0.7) (17%) % Non-financial sector entities - deposits % % Corporate Banking % 1.0 7% Retail Banking % % Other financial liabilities (0.5) (49%) (2.7) (85%) Other liabilities (0.8) (44%) (0.1) (11%) Total liabilities (2.0) (5%) 2.0 5% Equity % (0.1) -1% Total liabilities & equity (1.9) (4%) 1.9 4% Loans / Deposits Ratio 73% 77% 73% 72% 64% Capital Adequacy Ratio 18.1% 18.5% 17.5% 16.7% 17.5% NPL Ratio 7.5% 7.6% 6.9% 6.7% 7.0% 18

19 Retail banking volumes Volumes (PLN million) 4Q12 1Q13 2Q13 3Q13 4Q13 4Q13 vs. 3Q13 4Q13 vs. 4Q12 PLN MM % PLN MM % Deposits % % Demand deposits % % Other deposits (29) (1%) % including saving accounts (22) (1%) % Loans % 23 0% Credit cards % 72 3% Cash loans (70) (4%) (184) (9%) Mortgage g loans % % 19