Annual General Meeting

Transcription

1 Annual General Meeting Bank BPH. Po Prostu Fair 2014 Performance 29 May May 2015 Annual General Meeting. Bank BPH 2014 Performance 1

2 Overview of 2014 Profitability 2014 net income of PLN 112 MM and pre-tax income of PLN 172 MM Performance Retail loans and commercial limits granted of PLN 7.3 B in 2014 good sale of core products record high cash loans sale in 4Q Costs Focus on operational cost control 2014 costs stable y/y Losses Safe & sound Impaired loans down PLN 650 MM y/y NPL ratio down 2.2 pp. y/y effective debt sale, retail work-out and commercial restructuring loan losses of PLN 57 MM in 2014 CAR at 16.8% and Tier 1 at 14.3% under Basel 3 rules liquidity and market risk maintained at a safe level good results of AQR and stress tests 29 May 2015 Annual General Meeting. Bank BPH 2014 Performance 2

3 Challenging banking environment Unemployment (%, y/y) Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 PMI Manufacturing (pts., average) GDP & CPI inflation (%, y/y) Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q' Economy Confidence indices Consumer confidence (pts., eop) Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 GDP CPI 1. Rate cap 47% portfolio* with significant profitability sensitivity vs. 31% market average interest income impact of 234 MM y/y in 2013 and 85 MM y/y in % 21% 19% 18% 17% 16% 2. CHF mortgage loans six-pack Mortgage Loans Restructuring Support Fund stability fund estimated cost ~30 MM 3. BFG charges increase 4. Interchange fee drop from 1.5% in 2012 to 1.2% in 2013 to 0.5% in 2014 and to % in 2015 net interchange income down from 40 MM in 2012 to 33 MM in 2013 and 29 MM in 2014 Regulatory landscape 12% Jan'13 Apr'13 Jul'13 Jul'14 Oct'14 Jan'15 10% 0.099% 0.109% 0.137% SME 20% Retail other 5% Retail cards 4% 28 MM 32 MM 37 MM 65 MM 0.239% AQR reserve adjustments expected impact ~30 MM 4Q 14 portfolio* Corporate 26% Other 7% P-loans 38% Sensitive portfolio Source: GUS, NBP, OECD, HSBC & Markit */ Gross loan book excl. mortgage loans; Market average based on listed banks data 29 May 2015 Annual General Meeting. Bank BPH 2014 Performance 3

4 2014 financial performance PLN MM Revenues Costs Losses Net income 1,519 9% 1,387 Rate cap Interchange RANR 4% stable 1,132 1, % NPL ratio from 11.6 to Legal case settlement 33 MM Car park 26 MM MSA 22 MM one-offs 81 core core Net receivables Capital ratios (%) Stock performance Growth portfolio (eop) Retail exit (eop) PLN 1.7 B liquidity buffer Chart standardized to 100 inflecting 4% 9,041 9,081 5,208 5,054 3,833 4,027 13,548 13, Basel 3 methodology BPH -10% WIG stable WIG-Banki -1% swig80-16% Commercial Retail growth CAR Tier 1 29 May 2015 Annual General Meeting. Bank BPH 2014 Performance 4

5 Retail performance highlights Total retail sales* (PLN MM) 2,082 15% 2,391 Cash loans up 11% y/y Investments gross sales (PLN MM) Net receivables (PLN MM, average, growth book) 5,103 5,066 5,041 5,046 1Q'14 2Q'14 3Q'14 4Q'14 C/A balance (PLN MM, eop) C/A offer development contracted as ZUS preferred bank Fair Line introduction overdrafts sales up 38% Credit cards sales up 10% y/y Fair Card 97% of the sales Investments offer development new funds and SCDs Cash loans record high sales of over PLN 600 MM in 4Q 89K cash loans worth over PLN 2 B granted in 2014 Bank BPH Brokerage Office trading volume -5% vs. -9% market Good positions in independent rankings 13% 15% 1,016 1,148 1,640 1,890 1st place for Lubię To! Konto 2nd place for Maksymalne Konto 2nd place for Maksymalne Konto Account for teenagers Forsal.pl 1st place for cash loan Multiczwórka among 2014 X-mas cash loans 1st place for mortgage offer Consumers Award for mortgage loan Solid growth in retail sales */ Incl.: cash loans, mortgage loans, cards, overdrafts 29 May 2015 Annual General Meeting. Bank BPH 2014 Performance 5

6 Commercial performance highlights Renewals New SME sales* (PLN MM) 7% 1,470 1, Factoring turnover (PLN MM) 75% 1,547 7% Corporate sales* (PLN MM) 3,134 1,939 13% 2,319 1,195 1,211 C/A balance (PLN MM, eop) 3,530 4% 2,779 2, % y/y growth in total commercial sales Over 3.5K loans granted worth PLN 460 MM under BGK s de minimis program Strengthened advisors sales channel in factoring revenues up 78% y/y # of card transactions up 45% to 2.6 MM value up 21% to PLN 249 MM Expanded functionality of the internet platform 17 MM transfers, up 13% y/y Net receivables (PLN MM, average, excl. one-offs) 3,741 3,624 3,714 3, Q'14 2Q'14 3Q'14 4Q'14 Developing momentum in Commercial */ Limits granted 29 May 2015 Annual General Meeting. Bank BPH 2014 Performance 6

7 Executed in 2014 Branch network Digitization BPH TFI Network optimization 12 new franchise branches in own branches modernized 2nd Investment Center opened in Kraków 170 dedicated personal banking and 20 mortgage loan sales advisors in place YE 2013 YE 2014 Own branches Franchise Biometric Finger Vein technology expanded to cover in-branch transaction confirmation ~130 K clients Fully paperless sales of key retail products through Sez@m internet banking platform added in 4Q 14 New mobile application and NFC payments in 1H 15 New strategy focus on improvement in investment results PLN 25.9 MM net income for 2014, stable y/y New funds in offer in 2014 BPH Pieniężny subfund (money fund) with assets reaching PLN 187 MM and within Top 5 returns in the category* BPH Obligacji Korporacyjnych (corporate bonds) with assets of PLN 93 MM 1st place for Strategia o wysokim standardzie in Gazeta Giełdy Parkiet ranking of asset management services** Key initiatives RESPECT Index Ombuds Customer Council Customer Complaint Resolution Process No. of complaints on banks to KNF 5,050 5,200 3% Fair Play Bank Complaints No. of complaints on Bank BPH to KNF % Net Promoter Score (range from -100 to +100) 20% 18% 1Q'14 1Q'15 */ BPH Pieniężny subfunds results up 2.14% - half-year return as of 31 January 2015; ranked 5 out of 46 within money funds category **/ Published in January 2015; in the group of stock portfolio managers 29 May 2015 Annual General Meeting. Bank BPH 2014 Performance 7

8 Working environment Employee survey Risk Culture Survey 2015, favorable answers (%) Accountability Tone from the Top Performance/ recognition Incentives Effective communication & challenge Talent development Bank BPH GE Capital Training and development 218 events delivered (vs. 160 in 2013) 3,121 employees & managers trained (vs. 2,200 in 2013) 89 internal trainings 1,300 participants 23 leadership programs 350 participants 459 participants 21,093 hours 39 external trainings 590 participants 400 hours 45 trainings 600 participants Employee attrition Employees who left the Bank vs. average headcount in Bank BPH 8.5% 8.6% 7.6% 5.2% 4.7% 4.2% 2.7% 2.0% 1.5% Sales Voluntary High performers 20.6% 21% market* 15.4% 13.9% Total Labor law cases Key initiatives Closed 41 cases open (YE 2014) New 1. Various coaching programs 48 33% 19% 2. New working environment in Gdańsk and Kraków 11 lost PLN 38 MM investment in IT stability 2 lost 4. Introduction of life insurance 5. HealthAhead */ Market benchmark; total attrition median (8 banks, FY 2014 & January 2015 data) 29 May 2015 Annual General Meeting. Bank BPH 2014 Performance 8

9 Strategic directions 1. Differentiate on Fair Play Emphasis on being a simple & transparent partner Consistently improving customer experience 2. Grow the core Maintain market position in mass segment - focus on cash loan and primary relationships Develop wealth management program to achieve leadership in mass affluent segment Grow share in SME and high return Mid-Cap with an emphasis on primary banking relationships 3. Safe & Secure Operate within Risk Appetite Statement tolerances Compliance with all regulatory ratios Be recognized as strong on global and local regulatory agenda GE exploring strategic options & focus on long-term profitability ongoing strategy monitoring 4. Continued investment in Infrastructure Healthy technology platform Customer facing infrastructure, digitization & innovation Employee engagement & development A healthy and friendly middle market champion generating long term value for customers, stakeholders, employees & community 29 May 2015 Annual General Meeting. Bank BPH 2014 Performance 9

10 GE Capital s shareholding in Bank BPH Building financial business in Poland 1995 GE enters Polish financial sector and creates GE Capital Bank 2008 GE acquires majority stake in Bank BPH 2009 Legal merger of Bank BPH & GE Money Bank Strategic investment decisions Oct Apr GE informs that is exploring strategic options for the sale of its stake in Bank BPH investment banks and other advisors engaged KNF informed GE announces its plans to reduce the size of GE Capital through the sale of most its assets and focuses on continued investment and growth in its industrial and manufacturing businesses Bank BPH is also in scope Currently early stage of discussions a variety of interested parties GE s on-going continued full support for Bank BPH funding maintained Bank BPH continues to focus on servicing customers and operates as usual Providing appropriate support to GE during their process to explore sale of their majority stake in Bank BPH 29 May 2015 Annual General Meeting. Bank BPH 2014 Performance 10

11 Summary 1. Stable core net income to prior year despite significant headwinds 2. Strong growth in sales stabilized core portfolios enables growth in Wealth management agenda drives growth in investment product sales 4. Emphasis on Fair Play brings tangible results in NPS, customer complaint KPIs and employees satisfaction 5. Strong liquidity and capital adequacy 6. Supporting GE process whilst maintaining growth momentum in May 2015 Annual General Meeting. Bank BPH 2014 Performance 11