Slovenská sporiteľňa, a. s. Investor Presentation. April 2016

Transcription

1 Slovenská sporiteľňa, a. s. Investor Presentation April 2016

2 Disclaimer Cautionary Note Regarding Forward-Looking Statements THE INFORMATION CONTAINED IN THIS DOCUMENT HAS NOT BEEN INDEPENDENTLY VERIFIED AND NO REPRESENTATION OR WARRANTY EXPRESSED OR IMPLIED IS MADE AS TO, AND NO RELIANCE SHOULD BE PLACED ON, THE FAIRNESS, ACCURACY, COMPLETENESS OR CORRECTNESS OF THIS INFORMATION OR OPINIONS CONTAINED HEREIN. CERTAIN STATEMENTS CONTAINED IN THIS DOCUMENT MAY BE STATEMENTS OF FUTURE EXPECTATIONS AND OTHER FORWARD-LOOKING STATEMENTS THAT ARE BASED ON MANAGEMENT S CURRENT VIEWS AND ASSUMPTIONS AND INVOLVE KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS, PERFORMANCE OR EVENTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED IN SUCH STATEMENTS. NONE OF SLOVENSKÁ SPORITEĽŇA, ERSTE GROUP OR ANY OF ITS AFFILIATES, ADVISORS OR REPRESENTATIVES SHALL HAVE ANY LIABILITY WHATSOEVER (IN NEGLIGENCE OR OTHERWISE) FOR ANY LOSS HOWSOEVER ARISING FROM ANY USE OF THIS DOCUMENT OR ITS CONTENT OR OTHERWISE ARISING IN CONNECTION WITH THIS DOCUMENT. THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER OR INVITATION TO PURCHASE OR SUBSCRIBE FOR ANY SHARES OR DEBT SECURITIES AND NEITHER IT NOR ANY PART OF IT SHALL FORM THE BASIS OF OR BE RELIED UPON IN CONNECTION WITH ANY CONTRACT OR COMMITMENT WHATSOEVER. 2

3 Slovakia at a Glance Territory: 49,035 km2 Population: 5.4 million GDP per capita: approx. EUR 14,400 (2015) Credit ratings: A2 (stable) / A+ (stable) / A+ (stable) Capital: Bratislava Members of the EU End of the Communist regime WTO membership EU accession referendum ERM-2 entry Euro adoption Slovak Republic founded OECD membership NATO and EU membership Schengen area membership Participation in ESM 3

4 Slovakia Economic Growth Accelerates, Driven by Domestic Demand Real GDP growth 2.5% 3.6% 3.5% Components of GDP Private consumption growth Fixed capital formation growth 1.6% 1.4% 14.0% 2.4% 3.5% 2.4% 2.9% 1.0% e -0.4% -0.8% -1.1% -9.2% e Real economic growth accelerated to 3.6% y/y in 2015, the highest rate since 2011 We expect growth to average 3.5% in both 2016 and 2017 Mild risks to growth remain from geopolitical uncertainty and global economic slowdown Domestic demand surged in , both due to growing household consumption and surging investments Households benefit from improving labour market Investments accelerated in 2015 mainly on public investments (drawing of EU funds) Although, investments of non-financial corporates picked up as well to 6.5% y/y 4

5 Slovakia Labour Market Improves, Fiscal Balance in Check Unemployment and Inflation Unemployment rate (average) Consumer price inflation (average) Public Debt and Government Balance Public debt (share of GDP) General government balance (share of GDP) 14.0% 14.2% 13.2% 11.5% 10.7% 54.6% 51.9% 53.5% 52.8% 52.0% 3.6% 1.4% 0.2% -0.1% -0.3% e Labor market improved significantly in the past 2 years Unemployment rate declined to 11.5% on average in 2015, a significant decrease from 13.2% in 2014 Price development remains subdued, mild deflation at -0.3% y/y on average in 2015 amid low fuel and energy prices We expect inflation to be close to 0% on average in 2016, with very little supply or demand pressures seen so far -4.2% -2.6% -2.8% -2.7% -2.0% e 2016e Fiscal balances remain in check Fiscal deficits remain below 3% of GDP (in 2015, deficit expected at 2.7% of GDP, for 2016 deficit budgeted at 1.9% of GDP) Public debt fell by 1pp to 53.5% of GDP in 2014, comfortably under the key debt brake threshold (55%) Debt to decrease to 53% of GDP in 2015 and 52% in

6 Slovak Banking Market Stable and Conservative Business Models Customer deposits fully cover customer loans Loans-to-deposits ratio (net) reached 87.8% as of December 2015 Solid capital ratios of the banking sector (especially major banks) Top 3 banks have capital adequacy above 16% No state support needed after the crisis in 2007/2008 No FX retail loan exposures After euro adoption in January 2009, almost no FX loans to households Only 4% of corporate loans are in FX 6

7 Slovak Banking Market Growth of Retail Market with Space for Further Convergence, Corporate Loans Growing Mildly Retail and Corporate Loans (EUR bn) Retail and Corporate Deposits (EUR bn) Retail loans Corporate loans Retail deposits Corporate deposits Growth of retail loans amid convergence Retail loans growing visibly in recent years (12% y/y in 2015) Retail loans as a share of GDP stands at approx. 33% As compared to EMU slightly above 50% of GDP, there is still space for convergence More modest medium-term growth of corporate loans Market has more deposits than loans, stable funding Market gross loans-to-deposits ratio stood at around 91% as of December 2015 Pick-up of retail deposit inflow in Amid low-interest-rate environment, higher sight and savings deposits in retail, decline of term deposits 7

8 Slovak Banking Market SLSP #1 in Total customer Loans and Deposits Customer Loan Market Shares (September 2015; %) Customer Deposit Market Shares (September 2015; %) SLSP SLSP SLSP strengthened its leading position in , gaining market share in all key segments In total loans, SLSP market share increased by 2pp since end to 21.1% in September 2015 Improvement in both retail and corporate segment In , SLSP strengthened its market leader position in customer deposits with market share at 21.4% This compares to 20.5% at the end of 2013 In retail deposits SLSP market share was near-stable at 26.4% 8

9 Slovenská sporiteľňa at a Glance Total Assets: EUR 14.0bn; Equity: EUR 1.5bn; Net profit: EUR 185m (2015YE) One of the most stable banks in the Eurozone ECB Stress Test (Oct 2014) (banks with assets above EUR 10bn; 2013): No. 6 by CET1 Ratio Adverse Scenario 2016 No. 9 by CET1 Ratio Baseline Scenario 2016 Strong capital position: CET1 Ratio at 17.8%, Solvency Ratio at 21.9% (2015) SLSP was outperforming most of the competition in CIR, ROE, NIM in recent years Low dependence on external funding amid 87.8% (net) L/D ratio (2015) Rating (Fitch Ratings) Long-term foreign currency IDR: BBB+ Short-term foreign currency IDR: F2 Support Rating: 2 Viability Rating: bbb+ Outlook: Stable Covered Bonds Rating: A (stable) 9

10 Strategic Positioning The leading bank in Slovakia in key retail segments (mortgage loans, consumer loans, retail deposits) Member of the Erste Group, one of the largest retail banking groups in Central Europe Focus primarily on retail mass market Largest distribution network in Slovakia (291 branches), it serves 2.3m clients Retail loans constitute about three quarters of total loans at SLSP Retail deposits constitute also about three quarters of total deposits at SLSP Medium sized bank in corporate market (number 3-4) 10

11 Market Shares Increased in both Retail and Corporate segments in 2015 Assets Liabilities 26.5% 25.9% Total assets Retail loans Corporate loans 26.9% 27.7% Retail deposits Corporate deposits 25.7% 26.4% 26.4% 26.4% 20.2% 19.6% 20.6% 20.7% 10.9% 11.0% 10.9% 11.9% 9.7% 9.8% 10.6% 12.5% SLSP is the market leader in total assets and loans SLSP is retail oriented bank with stable retail deposit funding Shares increased in all key retail loan segments in In retail loans, SLSP market share increased by about 80bp in 2015 Growth driven mainly by housing loans SLSP was also successful in corporate segment in 2015 SLSP is the market leader also on the liability side; both in total and retail deposits Market share in retail deposits was broadly unchanged in 2014/2015 Visible improvement in corporate deposit segment 11

12 Balance Sheet Total Assets (EUR bn), market share 20.3% 20.2% 20.6% 20.7% 19.6% SLSP is the key market player by total assets Major changes in 2015: Total assets rose by EUR 1.0bn in 2015 The increase was driven almost entirely by loans to customers (+15% y/y in 2015) Majority of SLSP financial assets are Slovak Government Bonds Total assets Market share Structure of Assets 32% 33% 32% 30% 27% 8% 6% 4% 5% 3% 55% 57% 61% 62% 67% Structure of Liabilities 9% 10% 11% 10% 11% 5% 7% 6% 13% 10% 4% 7% 8% 6% 3% 71% 71% 78% 75% 76% Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Loans to customers (netto) Financial assets Others Loans to banks, CB Tang & intang assets Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Customer deposits Deposits from banks, CB Debt securities issued Others Equity 12

13 Tisíce Key Balance Sheet Data Net Loan to Deposit Ratio Solvency Ratio 78.3% 79.8% 78.8% 83.6% 87.8% 20.1% 25.2% 19.9% 21.9% 15.6% NPL Ratio and NPL Coverage (1) Tier 1 Ratio 82% 85% 86% 65% 66% 16.3% 20.8% 17.7% 20.3% 11.6% 7.6% 6.3% 5.5% 6.3% 5.6% (1) Increase in NPL rate (and decrease in coverage) in 2014 due to change of methodology. New methodology in line with EBA recommendations (cross-defaults in retail). 13

14 Operating Performance Net Profit (EUR m) Net profit stable in recent years Net profit reached EUR 185m in Operating Income, Expenses, Result (EUR m) It was slightly higher than a year ago mostly due slightly higher net interest income, lower bank levy and lower contribution into Deposit Protection Fund in 2015 In 2012, bank levy was introduced in Slovakia The rate decreased in 1Q 2015 Operating Income Breakdown 21% 20% 20% 21% 20% % 77% 77% 77% 78% Operating income Operating profit Operating expenses NII NFCI NTI & other 14

15 High Cost Efficiency and Solid Returns Cost/Income Ratio Net Interest Margin ROE 43.5% 43.0% 44.5% 44.3% 4.2% 4.1% 4.0% 3.7% 16.9% 15.1% 14.5% 13.8% High cost efficiency One of the lowest CIR in Slovak banking market Increase in CIR in 2014 vis-à-vis 2013 due to renewed Deposit Protection Fund (similar is true for the decrease in 2013 vis-à-vis 2012) Low interest rate environment puts pressure on the margins However, SLSP still maintains one of the highest NIM Both on Slovak market and compared to other euro area countries One of the highest ROE among top Slovak banks in the past years In 2014, SLSP ROE was the highest among banks at Slovak market 15

16 Assets Encumbrance Encumbered Assets Free assets eligible for Encumbrance 30% 30% 25% 25% 20% 20% 15% 10% 10.9% 8.5% 15% 10% 5% 5% 0% Market SLSP 0% Market SLSP Loans Bonds Others Bonds As of December 2015, only 8.5% of our assets weighted by total assets were encumbered. Asset encumbrance is lower than the average level of assets encumbrance in Slovakia 16

17 Slovak Mortgage Bonds Legal Framework Slovak Mortgage Bonds Act German Pfandbrief Act Mortgage backed Cover Pool Mortgage loans secured by residential or commercial properties Max. LTV : 70% Max. LTV : 60% Substitute Collateral Substitute Collateral max. 10% of the Cover Pool (government bonds, cash) Substitute Collateral max. 10% Geography for Pool Only Slovakian mortgage property allowed EEA + USA, Canada, Japan 17

18 Slovak Mortgage Bonds Legal Framework (cont.) Slovak Mortgage Bonds Act German Pfandbrief Act Protection Mortgage Administrator appointed by National Bank of Slovakia checks eligibility of the assets in the Cover Pool OC and NPV Test No minimum over-collateralisation Coverage by nominal value Min. 2% OC Insolvency provisions In bankruptcy the Mortgage Bonds could become due No special administrator will be appointed The Cover Pool can be transferred to another credit institution No acceleration Special administrator appointed 18

19 Cover Pool/Mortgage Loan Products Main Characteristics A (stable) rating by Fitch Stable and well diversified Cover Pool Currency: only Euros Cover Pool Only Slovak Residential Properties in the Cover Pool Loans in 30 days + arrears automatically excluded from the Cover Pool Substitute collateral Slovak Government Bonds currently EUR 90m) Interest rate swap(s) in the Cover Pool: no Currency swap(s) in the Cover Pool: no Mortgage Loans Mortgage Loans as defined by Bank Act Loan Types Maturity: minimum 4 years maximum 30 years WAL: 17.8 years (including redemptions/repayments) Interest Rate: Fixed Rate loans of 96% Floating Rate loans of 4% Amortization: 100% annuity Max. LTV: 70% Average monthly payment: below EUR 300 Percentage of 500 largest loans: 5% 19

20 Covered Bonds Programme Summary Covered Bonds Maturity Profile Issuer: Slovenská sporiteľňa, a. s. Issuer s Rating: (BBB+ (stable) Fitch) Programme Limit: EUR 2,000,000,000 Covered Bond Rating: A (stable) (Fitch) Bond Structures: Fix and Floating Preferred Maturities: 3 6 years Cover Pool: only Slovak residential assets OC: required OC of 7.5% (Issuer s commitment) Governing Law: Slovak Listing: Bratislava Stock Exchange UCITS compliant: Yes Eligibility: ECB Repo and CBPP3 eligible Language: Slovak and English 300,000, ,000, ,000, ,000, ,000,000 50,000,000 0 SLSP Mortgage Covered Bonds Maturity Profile (March 2016)

21 Cover Pool Structure per Mortgage Loans Mortgage Bonds Total volume 1,100.6 m Number of loans 33,755 Number of borrowers 33,728 Average LTV 49.2% Average seasoning Average remaining life 3.8 yrs 22.6 yrs Issues Cover Pool Total volume (m ) ,190.6 Average maturity (yrs) Over-collaterisation 27.2% Covered Bond Rating (Fitch) A Stable Notes: - Total Cover Pool for all Covered Bonds (64 issues); - Excluding non-eligible loans and loans in 30 days + arrears; - Substitute collateral ( 90 m) - Slovak Government Bonds; - Average interest rate of loans: 3.61% p.a. Distribution by Property Type Reconstr. New building 2.6% 8.7% Other 3.7% Trnava 12.3% Other 3.8% Žilina 12.8% Regional Distribution Banská Bystrica 9.4% Bratislava 17.1% Old building 85.0% Trenčín 12.3% Prešov 11.2% Nitra 9.7% Košice 11.4% 21

22 Cover Pool Structure per (cont.) Distribution by Remaining Life Distribution by Volume 1.0% 3.4% 4.1% 7.2% up to 5 yrs 0.1% 4.6% 0.6% 3.8% 19.8% up to 15, % 5-10 yrs yrs yrs yrs 15,001-30,000 30,001-60,000 60, , % over 25 yrs 71.2% 100, ,000 over 150,000 Distribution by Number of Loans Distribution by LTV 61.0% 5.7% 7.8% 11.5% up to 5 yrs 5-10 yrs yrs yrs yrs over 25 yrs 15.3% 55.8% 5.9% 7.5% 7.6% up to 40% 40% - 45% 45% - 50% 50% - 55% 55% - 60% 60% - 70% 7.9% 22

23 Investor Relations Details Slovenská sporiteľňa, a. s. Tomášikova 48, Bratislava Slovak Republic Investor Relations Mária Valachyová Tel: Marianna Červená Tel: [email protected] [email protected] Balance Sheet Management Vladimír Polhorský Tel: Róbert Herbec Tel: [email protected] [email protected] 23