BRE Bank Group Results Q

Transcription

1 BRE Bank Group Results Q Profitable Growth BRE Bank SA Management Board Presentation for Investors and Analysts 31 July

2 Agenda Introduction Summary of Q BRE Bank s Q Results Business Line Financial Results and Highlights Analysis of Q Financial Results Appendix Detailed Results of the Business Lines, Q Additional Information on Selected Financial Data Macroeconomics 2

3 Agenda Introduction Summary of Q BRE Bank s Q Results Business Line Financial Results and Highlights Analysis of Q Financial Results Appendix Detailed Results of the Business Lines, Q Additional Information on Selected Financial Data Macroeconomics 3

4 Summary of Q High High profitability profitability 2 Focus Focuson on customer customerbusiness 3 Strengthened Strengthened position position in in strategic strategic markets markets 4

5 Summary of Q High Profitability of Regular Business Operations Profit before tax (continued and discontinued operations) PLN M Profit before tax (continued operations) PLN M ROE before tax* 33.5% Cost/Income (C/I)* 58.0% Capital adequacy ratio (CAR) 10.41% All presented financial data for the BRE Bank Group, unless indicated otherwise * Consolidated figures of the continued operations 5

6 Summary of Q DynamicGrowthinLoansto Customers Gross loans to customers up 32% YoY, including: Retail loans up 75.9%. Growth in Loans (PLN M) 4,9 +75,9% +32% 3,2-0,9 +22,6% -41,5% 29,9 Corporate loans up 22.6%. 22, Individual clients Corporate clients Other Structure of the BRE Bank Group Loans Portfolio at 30 June 2007 BRE Leasing 8.3% BRE - other 0.9% BRE - Budget sector 1.6% Factoring companies* 5.9% BRE - Corporate clients 36.1% BRE Bank Hipoteczny 9.2% BRE Bank 75,6% BRE - Individual clients 37.9% The share of retail loans in the portfolio up to 38.2% (from 28.7% at the end of June 2006) * Factors: Polfactor, Intermarket Bank, Transfinance, Magyar Factor 6

7 Summary of Q Deposits Total deposits up 34.5% YoY, mainly including: Corporate deposits up considerably (+41.3% YoY) Retail deposits up steadily though at a falling rate (+25.7% YoY) Growth in Deposits (PLN M) 21,8 2,2 +34,5% 5,4-0,1 +25,7% +41,3% -30,7% 29, Individual clients Corporate clients Other Structure of the BRE Bank Group Liabilities to Customers at 30 June 2007 BRE Bank Hipoteczny 1.0% Factoring companies * 0.5% DI BRE 2.8% BRE - Individual clients 34.2% BRE - Budget sector 0.5% BRE Bank 95,7% BRE - Corporate clients 61.0% * Factors: Polfactor, Intermarket Bank,Transfinance, Magyar Factor Consequently, the share of corporate customers funds (Bank + subsidiaries) in total deposits up from 60% in H to 63% now 7

8 Agenda Introduction Summary of Q BRE Bank s Q Results Business Line Financial Results and Highlights Analysis of Q Financial Results Appendix Detailed Results of the Business Lines, Q Additional Information on Selected Financial Data Macroeconomics 8

9 Summary of Q Results Business Line Results Growing Profitability of Business Lines Profit before Tax by Business Line, Q v. Q (PLN M) Corporations and Financial Markets Retail Banking (+PB) +56.8% % % Corporates and Institutions 39.6 Trading and Investments 22.6 Q Q

10 Summary of Q Results Strategic Subsidiaries Results Profit before tax of strategic subsidiaries up by nearly 22% year on year (for comparability, Q data net of SAMH but including BWM) 13,4 DI BRE 30,9 13,1 BRE Leasing 25,3 Profit before Tax of Consolidated Subsidiaries (PLN M) 19,0 17,5 BBH Intermarket Bank 12,7 11,0 8,6 PTE SE 9,2 17,6 BRE.locum 6,8 5,5 Transfinance 5,4 I-IIQ2006 I-IIQ2007 Polfactor 5,5 5,7 2,6 Magyar Factor 2,7 2,4 2,8 BWM Pozostałe -2,1-1,5 Bank* 77,8% Subsidiaries 22,2% Transfinance 1% Intermarket Bank 2,4% Polfactor 1,1% Magyar Factor 0,5% DI BRE 5,8% PTE S-E 1,7% Contribution of the BRE Bank Group Subsidiaries to the Profit before Tax * Bank s profit before tax net of consolidation adjustments. ** Other includes: BRE.locum, CERI, BRE Wealth Management, BRE Corporate Finance, BRE Finance France, Tele-Tech Investment, Garbary, emfinanse BRE Leasing 4,8% pozostałe spółki** 1,6% BRE Bank Hipoteczny 3,3% Subsidiaries: Corporates and Institutions Asset Management discontiniued operations Other 10

11 Agenda Introduction Summary of Q BRE Bank s Q Results Business Line Financial Results and Highlights Analysis of Q Financial Results Appendix Detailed Results of the Business Lines, Q Additional Information on Selected Financial Data Macroeconomics 11

12 Business Line Results and Highlights, Q Corporations and Financial Markets: Summary Growing Profitability Profit before tax in Q up 68% YoY to PLN M Business Expansion Corporate loans up 28.3% YTD. Number of corporate customers in Q up by 1,219 to exceed 12 thou. Active presence in financial markets - BRE continues to be Poland s No 1 primary dealer: 18.6% share in the interest rate derivatives market, 14.5% share in bills and bonds trading -Leading positions in all segments of Corporate debt markets (No 1 or 2) - Market share in WSE trading approaches 7% Subsidiaries high contribution to Group profit before tax 27% of the profit before tax of Corporations and Financial Markets contributed by subsidiaries, mainly: DI BRE, BBH and BRE Leasing 12

13 Business Line Results and Highlights, Q Corporates and Institutions: Customers Total New Corporate Banking Customers Active acquisition: number of clients grew in Q by 1,219 (6.3% YoY) I - XII I - III IV - VI VII - IX 2006 X-XII 2006 I- XII I- III IV-VI 2007 Volume of Corporate Loans (BRE Bank, PLN BN) 6.3% share in the market of loans to enterprises % 57% 4% % % 56% 7% +28.3% % 58% % K1 K2 K3 Enterprises Significant expansion on the loan s market: growth in BRE Bank s Corporate Banking loans by 28.3% YTD 13

14 Business Line Results and Highlights, Q Corporations and Financial Markets: Financial Results Line s profit before tax at PLN M in Q , up 67.9% YoY Corporate Customers and Institutions contributed 73.5% of the Line s profit before tax, Trading and Investments contributed 26.5% Profit on transactions with K1, K2, K3 corporate customers (PLN M) was the main profit item of Corporate Customers and Institutions; subsidiaries also made a significant contribution to the profit before tax (PLN 85.3 M of consolidated profit; the sum total of individual profits was PLN M), mainly DI BRE, BRE Leasing, BBH. Trading result driven by strong underwriting activity, proprietary gains in IR & equity trading & very good flows in Fx trading despite low volatility. Line s Financial Results, Q (PLN M) Structure of Profit before Tax of Corporations and Financial Markets, Q (PLN M) Net interest income 281,0 Net fee and commission income 191,5 Trading and Investments 26.5% Trading and origination; 63,8 Risk and Liquidity Management; 32,7 Others; 5,1 Net trading income 208,2 Proprietary investments; -12,2 Corporate companies; 85,3 Impairement losses 7,9 Costs and amortization Investment companies; -1,3 K1; 59,1-394,6 K2; 52,5 K3; 17,1 Institutions; 11,6 Pre-tax profit 313,6 Corporates and Institutions 73.5% 14

15 Business Line Results and Highlights, Q Retail Banking: Summary Growing Contribution to Group Profit PLN M profit before tax, more than PLN 100 M YoY. 28.7% share in the Group s profit on regular transactions. Fast Growth of Customer Base 190 thou. new customers (+12% YTD) including 21 thou. microcorporates and 240 thou. new accounts (+13%) year to date. Fast Growing Investment Fund Assets and Equities Trading Assets of retail customers chenged by +25.4% year to date to PLN 10.9 B Retail customers assets in investment funds up PLN 1.3 B (+83%) year to date achieving PLN 2.9 B. ebroker and Brokerage Service trading 13% higher in H than in all of 2006 achieving PLN 2.4 B. Lending Expansion The share of BRE Bank s Retail Banking in retail loans up to PLN 10.7 B (+29.8% YTD), including 9.1 PLN B of mortgage loans (+29.2 YTD). 15

16 Business Line Results and Highlights, Q Retail Banking: Loans XII Retail Portfolio up PLN 2.5 B (to PLN 10.7 B), resulting in improvement of market share in retail loans to 4.9% 12,5 10 7,5 5 2, % Loans (PLN B) 2.1% 3.0% : 4.9% 4.4% BRE Bank (LHS) Market (RHS) Market share I VI XII VI XII VI XII VI Mortgage Loans: Market Leaders by value of sales Jan-May 2007 (PLN B) 5,8 3,2 2,3 1,4 In H we sold PLN 2.7 B of new mortgage loans, remaining one of the leaders on the market. PKO BP Millennium BRE Bank* GE *MultiBank+mBank, 16

17 Business Line Results and Highlights, Q Retail Banking: Savings BRE Bank customers opt for more profitable investments Investment Fund Assets at Quarter End (PLN M) Structure of Investment Fund Assets Equity 72.8% Debt securities 2.6% Monetary 5.0% Hybrid 19.6% Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 ebroker and Brokerage Service account for 27% of DI BRE s trading in equities Total ebroker and Brokerage Service Trading by Quarter (PLN M) % DI BRE Equities Trading by Quarter PLN M 6.00% 6.60% 6,40% 6.50% 6.85% 8,00% 7,00% 6,00% 5,00% Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Equities trading directly by DI BRE Equities trading by ebroker & Brokerage Service Shares in equities trading on Warsaw SE for DI BRE 4,00% 17

18 Business Line Results and Highlights, Q Analysis: Retail Banking (+PB) Financial Results Structure of Retail Banking Profit before Tax, Q (PLN) MultiBank; 42.0 Segment s Profit before Tax (by quarter, PLN M) Other; mbank; 75.1 PB; Q1 05* Q2 05* Q3 05* Q4 05* Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 * Q data based on Q reports, Q1 and Q data based on Q and Q reports. Profitability up significantly: profit before tax at PLN M in Q v. PLN 22.6 M in Q The Line s contribution to the BRE Bank Group s profit before tax on regular business operations* up to 28.7% The significant growth in profit was mainly driven by the dynamic growth in the loans portfolio, mainly mortgage loans (up PLN 4.1 B or 83% YoY) enabling a much higher commission and interest income; it was also driven by income on cards and quasi-banking products. Net interest income Net fee and commission income 98.1 Net trading income 50.2 Impairement losses Costs and amortization Pre-tax profit High costs due to the expansion of the branch network. * After elimination of the profit on the sale of SAMH Structure of the Segment s Profit before Tax, Q (PLN M)

19 Business Line Results and Highlights, Q Structure of BRE Bank Group s Profit Income * Cost 15; 1% 587; 56% 14; 2% 356; 58% 333; 31% 121; 12% Corporates and Institutions Result/Gross Profit 52.3% 206; 34% 38; 6% Trading and Investments 231 Corporates and Markets Retail Banking (+PB) % * The total profit on the sale of SAMH shares at PLN M was eliminated. Income shown including credit provisions, revenue split, and other operating income/cost. All data in PLN M Other** % ** Other under profit before tax includes : (PLN 3.82 M) Asset Management (after elimination of the profit on the sale of SAMH) PLN 4.67 M Other and consolidation adjustments 19

20 Agenda Introduction Summary of Q BRE Bank s Q Results Business Line Financial Results and Highlights Analysis of Q Financial Results Appendix Detailed Results of the Business Lines, Q Additional Information on Selected Financial Data Macroeconomics 20

21 Analysis of Q Results Profit & Loss account of continued operations Q (PLN M) Change YoY Change QoQ *** Total income* % +10.2% Total costs Operating profit** (610.3) +22.7% % +11.7% +8.1% Net provisions (5.9) -82.2% Profit before tax % Net profit % -/ % +18.9% * Incl. net other operating income and costs ** Before provisions *** Q v. Q

22 Analysis of Q Results Significant Growth in Core Business Income Steady growth of net interest income, improving trading profit BRE Bank Group Income Q v. Q PLN M % Net commission income grew quarter by quarter and was the largest income item at PLN M in Q v. PLN M in Q and PLN M in Q Net interest income was fuelled mainly by Loans and advances (up 13% QoQ) thanks to considerable growth of retail and corporate loans. Net commission income was the Group s second largest income item at PLN M in Q2 2007, similar to the Q level. Q Net interest income Net fee and commission income Dividend income Net trading income Gains less losses from investment securities Net other operating income and cost Q Trading profit at PLN M in Q was up 28% QoQ, mainly due to higher income on equities and interest rate instruments. 22

23 Analysis of Q Results Costs Under Control C/I ratio (for continued operations only) at 58.0%* in Q Overhead Costs (+Amortisation/Depreciation) of the BRE Bank Group by Quarter Costs in PLN M 66,1** +28.2% 64,7** 64,0** 63,7** +11.7% QoQ Q Q Q Q Q Q Payroll Maintenance Depreciation Other C/I** 57,7 C/I w% 58, Overheads at PLN M in Q2 2007, up 12.7% QoQ. Amortisation/Depreciation up 5.8% QoQ. Growth in costs and amortisation was 11.7% Growth in costs QoQ as well as H (by 25%) due to: - Growing personnel cost of the Group due to drowing activity - Branch network expansion. -Createdupto datereservesfor performance bonuses **C/I for total of continued and discontinued oerations * For continued and discontinued operations C/I was 49% in Q and 53.4% in Q

24 Analysis of Q Results Credit Provisions Continued improvement of the quality of the loans portfolio resulting in positive net credit and loans impairment provisions in Q Q Net Credit and Loans Impairment Provisions (consolidated data, PLN M) Q Q Q Q Q Q Q Q Q Net impairment of credit and loans at PLN 5.9 M in H in the BRE Bank Group. The Bank s net provisions at a positive PLN 0.2 million. The growth in the impairment provisions in H was relatively small compared to the growth in the portfolio owing to the growing credit risk portfolio and its improving quality. The portfolio quality improved mainly thanks to repayments and effective enforcement

25 Analysis of Q Results Stucture of BRE Bank s Risk Portfolio Sustained high ratio of specific provisions to the default portfolio, falling share of NPLs in the total loans portfolio 100% 80% 60% 11.8% 10.8% 9.2% % % % % % 4.8% % Quality of loans 2.2 and default portfolio 97.8 NPLs under NBP rating (NPLs to total loans) 40% 20% 63% 60% 65% 65% 67% 77% 75% 73% 73% 76% Specific provisions to the default portfolio 0% Non-default Default PLN M % share % share % share Default Non-default Total Structure of default portfolio 25

26 Summary of Q High High profitability: profitability: 33.5% 33.5% ROE ROE (before (beforetax) on on regular regularoperations 2 Customer Customerbusiness contributes contributes81% of ofthe thegroup s Group sprofit profit before beforetax tax 3 Strengthened Strengthened position position in in strategic strategic markets markets 26

27 BRE Bank Group Results, Q Appointment of a New Management Board Member BRE Bank Management Board: Division of Responsibility Sławomir Lachowski President, General Director Jerzy Jóźkowiak Management Board Member, Managing Director for Finance Bernd Loewen Management Board Member, Managing Director for Investment Banking Jarosław Mastalerz* Management Board Member, Managing Director for Retail Banking Rainer Ottenstein Management Board Member, Managing Director for Operations and IT Wiesław Thor Management Board Member, Managing Director for Risk Management Janusz Wojtas Management Board Member, Managing Director for Corporate Banking *Member of the Management Board starting 1st August

28 Agenda Introduction Summary of Q BRE Bank s Q Results Business Line Financial Results and Highlights Analysis of Q Financial Results Appendix Detailed Results of the Business Lines, Q Additional Information on Selected Financial Data Macroeconomics 28

29 Detailed Business Lines Results and Highlights: Retail Banking and Private Banking Corporations and Financial Markets Corporates and Institutions Trading and Investments 29

30 Retail Banking: Summary [thou.] [M] At the end of Q Customers Accounts mbank MultiBank End of Q M customers customers M accounts accounts PLN PLN B of of retail retail deposits deposits Change +5.2% +5.2% +4.9% +4.9% +0.5% +0.5% End of Q M customers customers M accounts accounts PLN PLN B B of of retail retail deposits deposits 6000 [M] AuM mbank of which Deposits MultiBank PLN PLN B of of retail retail loans loans +11.5% +11.5% PLN PLN B B of of retail retail loans loans Loans mbank of which Mortgage loans MultiBank including: including: PLN PLN B of of mortgage mortgage loans loans +10.5% +10.5% including: including: PLN PLN B B of of mortgage mortgage loans loans 30

31 BRE Bank Retail Banking v. the Market: Deposits and Investment Funds Deposits and Investment Funds * (PLN B) 12, ,5 5 2, % 2.1% 1.7% % BRE Bank s Retail Banking Line continues to grow above the market I VI XII VI XII VI XII VI XII * As at the end of May 2007 BRE Bank (LHS) 2007*: 2.8% Market (RHS) Market share 31

32 BRE Bank Retail Banking: Investment Funds MultiBank Investment fund assets changed by PLN M in Q MultiBank customers interest in equity funds rose in Q (71.7% of assets) Structure of Assets: MultiBank Investment Funds Equity 72% Debt securities 2% Monetary 4% Hybrid 22% MultiBank Investment Fund Assets at Quarter End (PLN M) Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 mbank Investment fund assets changed by PLN M in Q mbank customers interest in equity funds rose sharply in Q (73.1% of assets) Monetary 5% Bonds 3% Structure of Assets: mbank Investment Funds Hybrid 19% mbank Investment Fund Supermarket Assets at Quarter End (PLN M) Equity 73% Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q

33 BRE Bank Retail Banking: mbank ebroker, MultiBank Brokerage Service Dynamic growth of brokerage services for retail customers ebroker trading exceeded PLN 561 M in June 2007, and Brokerage Service trading was PLN 134 M. Incremental trading of PLN 6,668 M for ebroker and PLN 1,199 M for the Brokerage Service since the launch. There were 71.7 thousand mbank and MultiBank investment accounts at the end of June mbank and MultiBank customers opened 18.9 thousand investment accounts in Q Opened Investment Accounts (thou.) 14,1 17,3 23,5 28,1 1,6 2,7 34,2 37,3 46,1 4,4 5,3 6,7 62,3 I 2006 III VI IX XII I 2007 III VI ebroker and Brokerage Service Trading by Month (PLN M) mbank ,4 MultiBank I 2006 III VI IX XII I 2007 III VI 33

34 BRE Bank Retail Banking v. the Market: Loans BRE Bank s Retail Banking is steadily growing its share in the loans sector (especially for housing loans) 12,5 Loans (PLN B) 2007: 4.9% Housing Loans (PLN B) 2007: 9.5% , % 2.1% 3% 4.4% % 5.1% 6.5% 9% , I VI XII VI XII VI XII VI XII I VI XII VI XII VI XII VI XII BRE Bank (LHS) Market (RHS) Market share 34

35 BRE Bank Retail Banking: Mortgage Loans: Portfolio Structure and Quality BRE Bank s Mortgage Loans Portfolio (Retail Loans) Structure of the Retail Loans Portfolio (Household Loans) as at 30 June % 6% 7% Retail Mortgage Loans Total PLN FX Balance-sheet value (PLN B) Average maturity (years) Average value (PLN thou.) Average LTV (%) Mortgage loans Credit lines 17,2% 85% Credit cards Other Currency Structure of the Retail Loans Portfolio (Household Loans ) as at 30 June 2007 NPL (%) As at 30 June 2007 FX PLN 82,8% 35

36 BRE Bank Retail Banking: Car Insurance Supermarket The Car Insurance Supermarket was launched on 13 February 2007 Comparison and choice of 7 offers of liability and accident insurance, each offer in 3 variants Purchase and service integrated with the ekonto account 24/7 access to insurance policy information cars insured (at 31 June 2007) Electronic applications and policies minimum paper Liability insurance policy available in 6 languages (Polish, English, German, French, Italian, Spanish) Low monthly payments charged by mbank. PLN 23.2 M of premiums written Target number of cars insured: 18 thou. in 2007 The Car Insurance Supermarket is hard to beat Newsweek mbank has the most attractive offer Pentor Research International 36

37 BRE Bank Retail Banking: Acquisition of Microenterprises thousand microenterprises served by BRE Bank Retail Banking 9.7 thousand microenterprises acquired in Q PLN M of balance-sheet microenterprise loans at the end of June 2007, including 40.5% of mortgage loans Number of Microenterprises Served by BRE Bank Retail Banking Line thou mbank MultiBank 37

38 BRE Bank Retail Banking: Growth of Sales, Q Q Q Q Q Q , Q Q Q Q Q Customers (thou.) Deposits (PLN M) +12.2% +11.3% Q Q Q Q Q Q Q Q Q Q Customers (thou.) +10.3% Deposits (PLN M) +16.2% Loans (PLN M) Loans (PLN M) mbank MultiBank Volume +37.5% +25.3% Increment Q Q Q Q Q Q Q Q Q Q

39 BRE Bank Retail Banking: Growth of the Distribution Network mbank Distribution Network MultiBank Branches Total: Total: Q Q Q Q Q Q target Q Q Q Q Q Q 2007 target Financial Centres mkiosks Financial Service Centres Partner outlets 4 mkiosks opened in Q mbank s distribution network had 71 outlets at 30 June new outlets opened in Q2 2007: 6 Financial Services Centres and 3 Partner Outlets. MultiBank s network had 102 branches at the end of June

40 Detailed Business Lines Results and Highlights: Retail Banking and Private Banking Corporations and Financial Markets Corporates and Institutions Trading and Investments 40

41 Corporates and Institutions: Newly Acquired Customers Total New Corporate Customers ,219 new corporate customers acquired in H1 2007, i.e., 6.3% more than in H1 2006; of those, 76% were K3 customers and 20% were K2 customers. +6.3% 06' '2007 There were 12,012 corporate customers at the end of June 2007 (up by 570 customers net year to date). K3 customers who bought service packages accounted for 53.3% of the total. New SME Package Customers (EFFECT Line) ' '2007 SME Package No SME Package 41

42 Corporates and Institutions: Loans and Deposits Corporate Loans (BRE Bank, PLN B) % 57% % 56% % 58% % 58% 10.1 K1 K2 K3 K3 8% Corporate Deposits (BRE Bank, PLN B) % 39 % % 42 % % % % 41 % % 7% 8% 8% Enterprises 8% 10% 11% 10% 12' ' ' ' ' ' ' ' ' ' ' ' ' ' ' '2007 Loans (including the public sector, syndicated loans and project finance) were up PLN 2.6 B year to date. Loans to enterprises were up 11% (QoQ) at BRE Bank; the market grew 7% QoQ. Deposits (including the public sector) grew PLN 3.5 B year to date. Deposits of enterprises grew 18.7% in Q2 (QoQ) at BRE Bank; the market grew 2.5% QoQ. 42

43 Corporates and Institutions : Loans and Deposits: Market Share BRE Bank s Market Share in Corporate Loans and Deposits* 12,0% 10,0% 8,0% 6,0% 4,0% *receivables/amounts due to enterprises and State companies, private companies and co-operatives Corporate deposits Corporate loans Source: NBP reports Jan-05 Mar-05 May-05 Jul-05 Sep-05 Nov-05 Jan-06 Mar-06 May-06 Jul-06 Sep-06 Nov-06 Jan-07 Mar-07 May-07 43

44 Corporates and Institutions : Cash Management Supporting Long-term Customer Relations Cash Management Strategic Product Line Supporting Long-term Customer Relations Direct Debits (thou. transactions) Identification of Mass Payments (M transactions) Identification of Trade Payments (thou. transactions) +43% +1.4% +74.5% ' ' ' ' ' '2007 The number of customers using the Identification of Trade Payments service was up by 35 in H1 2007, or up by nearly 42% compared to the number of customers (using the service) acquired in

45 Corporates and Institutions : Foreign Trade Service and Risk Management Products Structure of Profit on Trade Finance Products Profit on Financial Instruments (PLN M) +1.1% +8.6% 1.0% 1.3% 12.2% 11.6% 34,2% 35,3% 35.5% 36.1% PLN 70.7 M 33.5 PLN 76.8 M ,1% 51.3% 52,2% 51.0% I - VI 2006 I-VI 2007 Guarantees Discounting products Letters of credit Collections I - VI 2006 I-VI 2007 Branches Head office The market position in foreign trade service and the launch of many innovative product solutions helped to grow the revenue from trade finance services by 1.1% in H year on year. The profit on sales of financial instruments to corporate customers was PLN 76.8 M in H The profit was up by 8.6% year on year. 45

46 Corporates and Institutions: Dom Inwestycyjny BRE Banku (DI BRE) DI BRE profit before tax at PLN 30.9 M year to date (up by more than 230% YoY). DI BRE equities trading at PLN 8.95 B in H DI BRE position in equities trading up from 6.0% in 2006 to 6.9% in Q Contrinued growth in DI BRE customers base: 94.7 thou. accounts. In the first half of 2007, 2 IPO and 4 SPO transactions were executed with the total volume of 1060 M PLN DI BRE Accounts (thou.) DI BRE accounts 23.0 ebroker (mbank) 62.3 Brokerage Service (MultiBank) 9.4 TOTAL 94.7 DI BRE Market Share After Q2 2007, in trading * Equities 6.85 % #7 Bonds 2.67 % #6 Futures % #2 Options 26.8 % #1 * Calculations based on data from WSE, DI, RBL DI BRE Equities Trading, Q PLN M ebroker and Brokerage Service trading Direct trading via DI BRE DI BRE Share in WSE Equities Trading By Quarter 6.85% 6.6% 6.4% 6.5% 6.0% 5.6% 5.0% 4.1% 3.5% 3.5% Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q

47 Corporates and Institutions : Good Market for Leasing and Factoring BRE Leasing The Intermarket Group Value of leasing contracts executed in Jan-Jun 2007: PLN 1.5 B, up 34% YoY. Pre-tax profit in Jan-Jun 2007: PLN 25.3 M, up by almost 94% YoY. The pre-tax profit of Intermarket Group companies was PLN 25.9 M in Jan-Jun 2007, up 6% YoY. The pre-tax profit of Polfactor S.A. was PLN 5.6 M (up 4% YoY). The sales of Intermarket Group companies were EUR 2.6 B, up 16% YoY. The sales of Polfactor were up 26%. BRE Leasing Contracts (PLN M) +34% Sales of Intermarket Group Companies (EUR B) +16% ,2 2,6 I-VI 2006 I-VI 2007 I - VI 2006 I - VI

48 Corporates and Institutions: BRE Bank Hipoteczny (BBH) Loans Portfolio (PLN M) Balance-sheet Exposure Housing loans* Profit before Tax (PLN M) -8% Local government loans 19,0 17,5 Commercial loans I-VI 2006 I-VI 2007 BBH s total balance-sheet and off-balance-sheet loans portfolio was PLN 3.7 B at the endofjune2007, up 22.2% YoY BBH s pre-tax profit was PLN 17.5 M at the end of June 2007, in line with the annual profit target. The pre-tax profit was down YoY due to extraordinary events in 2006 (released provisions). *As of July Bank Hipoteczny stopped granting loans to retail customers. The volume of housing loans represents the existing portfolio still managed by the Bank 48

49 Detailed Business Lines Results and Highlights: Retail Banking and Private Banking Corporations and Financial Markets Corporates and Institutions Trading and Investments 49

50 Trading and Investments: Market Share and Position BRE Bank s Market Share* in Investment Banking Services (BRE in navy blue) BRE Bank in the Market of Non-Treasury Debt** As at 30 June 2007 (PLN M) 14,5% 18,6% 38,0% 16.57% # % #2 37% #1 BRE Bank s Market Share T-bills and bonds 6,8% IRS/FRA 17,0% OIS , ,8 Market BRE Bank 6 398, , , ,4 FX Spot & Forward WIG20 index options Short-term debt Corporate bonds Bank bonds * As at 30 June 2007; own calculations based on NBP and WSE figures ** After Fitch Polska S.A., Rating & Rynek, 30 June 2007 and own calculations 50

51 Trading and Investments: Proprietary Investments At the end of Q2 2007, the Bank s proprietary investments portfolio was PLN 278 M at cost. The portfolio at cost was stable year to date. The portfolio was down PLN 16.3 M, or 5.5%, quarter on quarter due to the sale of RES Sp. z o.o. shares. Major Propietary Investments as at 31 March 2007 r. Equity stake Vectra SA* 19.95% PZU SA Garbary Sp. z o.o. 0.76% % Novitus S.A. 4.59% *Share in votes: 11.20% The balance-sheet proprietary investments portfolio was up PLN 153 M QoQ due to the revaluation of shares of Vectra at the end of June The revaluation was booked against the capital. Proprietary Investments (PLN M) Value at cost Book value 51

52 Additional Information: Selected Financial Data Consolidated Profit and Loss Account under IFRS Interest Income Structure, Interest Margin Fee and Commission Income Structure Cost Structure Balance Sheet Analysis Structure of Assets and Liabilities Non-performing Loans 52

53 Additional Information: Selected Financial Data Consolidated Profit and Loss Account under IFRS PLN 000 By quarter * Net interest income Net commission income Dividend income Q Q Q Q Q Q Trading profit Income from investment securities Other operating income Net impairment of credit and loans Overhead costs Depreciation/Amortisation Other operating cost Operating profit Share in profits (losses) of associated companies Profit before tax** (22 576) ( ) (40 254) (40 570) (87) (10 216) ( ) (40 166) (72 326) Net profit*** (25) (7 408) ( ) (41 267) (33 650) (5 761) ( ) (43 198) (37 122) (6 944) ( ) (42 942) (31 205) ( ) (45 402) (19 208) * Data adjusted for continued operations; data for Q based on the quarterly report for Q ** Profit on continued operations. *** Net Profit includes minority interest 53

54 Additional Information: Selected Financial Data Net Interest Income Net Interest Income Structure of Net Interest Income (consolidated figures, PLN M) Net interest income in Q up 6.1% QoQ and up 41.6% YoY. Interest income (up 31.6% YoY) growing faster than cost (up 24.4%). The largest item, interest income on loans, up by PLN 204 M YoY (up 38%) due to the growth in the loans portfolio; interest on investment securities up by PLN 56 M (up 206% YoY). Interest margin stable at 2.3% in Q (and Q1 2007) v. 2.1% in Q Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Other Debt securities held for trading Loans and advances Investment securities Cash and shortterm deposits BRE Bank Group margin as net interest income to average interest-earning assets 54

55 Additional Information: Selected Financial Data Net Commission Income Net Commission Income Net commission income up modestly QoQ (up 2.5%) and up 57.3% YoY. Commission income up 45% YoY and cost up 19%. The highest growth reported for lending fees (up 103% or PLN 54 M YoY); in addition to growth in lending, this was driven by the inclusion of credit insurance income as of Q2 2007, previously shown under Other. Broker s fees up sharply (up by PLN 27 M or 68%YoY), payment card fees up sharlpy (up by PLN 22 M or 48% YoY) Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Credit related fees and commissions Guarantees granted and trade finance commissions and fees Brokerage fees Other Structure of Net Commission Income (consolidated figures, PLN M) 67 Portfolio and other Payment cards Money transfers 55

56 Additional Information: Selected Financial Data Interest Income Structure Structure of Net Interest Income Q (consolidated figures, %) Net Interest Income, Q by Business Line (consolidated figures, PLN M) Loans and advances 74% Debt securities held for trading 6% Other 1% , Cash and short term funds 13% Retail Banking (+PB) Corporates and Institutions Trading and Investments Asset Management* Other and eliminations Net interest income in Q Investment securities 6% Corporations and Financial Markets Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q NIM* * Change in the methodology of calculation of the interest margin: In , NIM was calculated as net interest income to net assets As of Q1 2006, NIM is calculated as net interest income to average interest-earning assets 2005 data based on 2006 quarterly reports 56

57 Additional Information: Selected Financial Data Commission Income Structure Structure of Net Commission Income Q (consolidated figures, %) Brokerage fees 19% Credit related fees and commissions 32% Other 12% Guarantees granted and trade finance commissions and fees 5% Payment cards 18% Client's accounts and money transfers 14% 49.4 Retail Bankig (+PB) Net Commission Income, Q by Business Line (consolidated figures, PLN M) Corporates and Institutions -3.0 Trading and Investments Corporations and Financial Markets Asset Managment* Net fee and commission income of Q *Discontinued operations 57

58 Additional Information: Selected Financial Data Overhead Cost Structure Structure of Overhead Costs (+Amortisation/Depreciation) by quarter, PLN M, consolidated figures BRE Bank Group s C/I (based on average balances) Q Q Q Q42006 Q Q Payroll Maintenance Depreciation Other * ** *Before elimination of the consolidated profit on the sale of SAMH, C/I was 49% **For continued & discontinued operations C/I was 53,4% 58

59 Additional Information: Selected Financial Data Loans & Deposits +33.6% +34.5% 29,0 29,3 25,8 21,7 22,7 23,0 24,7 26,7 21,8 22,7 +4% +2% +12% +12% +4% +8% +8% +10% Loans: YoY growth of the loans portfolio (up 33.6%) much above the market (up 29.2% YoY) mainly thanks to the expansion of mortgage loans and recovery in corporate loans. The loans portfolio up 26% year to date Deposits: YoYgrowthindepositsmorethantwicethe market growth (BRE Bank up 34.5%, market up 15.1%) thanks to growing corporate and retail deposits. Growth year to date much above the market (BRE Bank up 18.6%, market up 5.0%). 59

60 Additional Information: Selected Financial Data Balance Sheet Analysis: Assets PLN B Structure of Assets % 22% 14% % 5% 3% 6% 3.2 8% % % 9% 7% 27% 3% 8% 7% % % % 3.8 6,7 15% % 3% 25 8% 5% PLN B Credits and Loans to Customers* - Portfolio by Customer Category 0.9 3% 1.0 4% % 2% % % 10% % 38% 29% 39% % % % % % % % 10 60% 57% 58% 63% 61% 64% * * Other Derivative financial instruments Trading securities Amounts due from banks Amounts due from customers Public sector Retail Corporate *Data based on the Q1 and Q reports *Gross credits and loans 60

61 Additional Information: Selected Financial Data Balance Sheet Analysis: Liabilities PLN B 4,7 2,2 4,1 5,1 13% 6% 11% 14% 55% Structure of Liabilities 10% 8% 3,8 3,1 2,2 6% 2,5 4,4 11% 4,2 6,6 17% 6,8 56% 6% 11% 17% 58% 3,6 2,6 3,4 8,0 9% 6% 8% 19% 58% 3,6 2,8 3,6 8,7 8% 6% 8% 19% 59% 4 3,1 3,5 9,0 19,5 21,8 22,7 24,7 26,8 29,3 8% 6% 7% 18% % 10 5 Structure of Deposits PLN B 0,1 0% 0,2 1% 0,2 1% 0,2 0,2 1% 1% 0,2 1% 18,5 15,8 15,1 60% 13,2 13,5 59% 11,2 61% 62% 57% 60% 8,1 8,5 9,0 9,4 10,7 10,7 40% 40% 39% 38% 37% 42% * * Other Equity (total) Debt securities in issue Liabilities to banks Liabilities to customers Public sector Corporate Retail * Data based on the Q1 and Q reports 61

62 Additional Information: Selected Financial Data Non-performing Loans: Portfolio Structure* Steadily decreasing share of NPLs in the (balance-sheet) loans portfolio Exposure PLN B % Provisions % coverage Exposure PLN B % Provisions % coverage Regular including: Standard Watch Irregular including: Exposure PLN B % Provisions % coverage Substandard Doubtful Loss Steady improvement of portfolio quality: NPLs down from 5.5% to 4.4% in Q (NBP rating) thanks to the significantly growing loans portfolio and ongoing restructuring and repayment of some of the Bank s exposures RAZEM Provisions shown under IFRS the impairment provision shown under watch * BRE Bank s balance-sheet loans portfolio balance-sheet credit debt (excluding credits not drawn) 62

63 Additional Information: Selected Financial Data Improving Quality of BRE Bank s Risk Portfolio 2,00% Change of average PD of the Corporate Portfolio vs. Non-Retail Impairment Provisions 160,00 PD in % 1,80% 1,60% 1,40% 1,20% 1,00% 0,80% 1,71% 1,79% 1,80% 1,71% 1,65% 1,41% 1,34% 1,24% 1,12% 1,04% 1,02% 1,01% impairment provisions average, weighted Risk Volume PD 0,98% 0,97% 0,95% 0,95% 0,94% 140,00 120,00 100,00 80,00 0,88% 60,00 0,60% 0,40% 0,20% 0,00% Jan-06 Feb-06 M ar-06 A pr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-07 M ar-07 A pr-07 May-07 Jun-07 Provisions, PLN M 40,00 20,00 0,00 63

64 Macroeconomics 64

65 Macroeconomics GDP and Labour Market Very fast growing GDP, further improvement of the labour market 35,0% 30,0% 25,0% 20,0% 15,0% GDP growth GDP growth rate (7.4%) in Q the highest in close to 10 years; the rate is estimated to have dropped to ca. 6% in Q2. 10,0% 5,0% 0,0% Q Q2 Q3 Q4 Q I Q2 Q3 Q4 Q Economic growth mainly driven by fast growing investments and private consumption; foreign trade performance is clearly deteriorating. Official unemployment was down to ca. 12.4% in June; growing demand for labour and increasing problems with recruiting qualified workforce triggered faster growth in wages; wages in the corporate sector up by 8.4% on average in H % 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% Individual consumption Fixed capital formation GDP Wages and unemployment 25% 20% 15% 10% 5% 0% wage growth in enterprises (left axis) registered unumployment rate (right axis) 65

66 Macroeconomics Inflation and NBP Interest Rates Growing inflation pressure prompted the MPC to tighten the monetary policy 5,0% 4,0% 3,0% Inflation indicators The Monetary Policy Council raised the NBP interest rates in April and June; the NBP reference rate was 4.5%. 2,0% 1,0% 0,0% -1,0% The main threats to price stability include economic growth exceeding the potential growth and faster growth in wages. The CPI (2.6%) was above the NBP inflation target for the first time in 2 years. NBP interest rate hikes and changing conditions on the global market boosted the yield of Treasury bonds. -2,0% 7 6,5 6 5,5 5 4,5 4 CPI PPI Core inflation NBP reference rate and market rates 3, Y bonds yield 10Y bonds yield NBP reference rate 66

67 Macroeconomics Loans and Deposits in the Banking Sector Increasing growth of corporate loans 70% 60% 50% Households (Dynamic YoY) Corporate loans up by more than 22% YoY in June, approaching the growth in deposits; strong interest in loans proves continued high investment activity. 40% 30% 20% 10% YoY growth in housing loans declining after February (from nearly 63% to 54.4% in May); continued fast growth in demand for consumer loans. Due to the large disparity in the growth rate of deposits and loans, household debt to banks and household assets in banks were nearly equal in June; households will be net debtors of banks as of July. 0% % 30% 25% 20% 15% 10% 5% Deposits Loans Housing loans Enterprises (Dynamic YoY) % -5% -10% Deposits Loans 67

68 Contact Jakub Korczak Director, Investor Relations BRE Bank s Investor Relations Officers at your service: Direct dial: Secretariat: Fax: jakub.korczak@brebank.pl or Joanna Filipkowska Analyst, Investor Relations Tel.: Fax: joanna.filipkowska@brebank.pl Visit our Investor Relations website: 68