Letter from the Chairman of the Management Board

Dear Sirs,

This is the 2012 Annual Report of Bank Millennium Group, where you will find information about activity of the Bank and its subsidiaries last year.

Effective implementation of plans, consistency in action and the ability to respond to the changing economic environment were our recipe for operation in a year, which brought economic slowdown. This was accompanied by deterioration of the economic situation of many industry sectors and companies. The new market situation induced us to reassess our mission, the business goals of which were formulated as the medium-term strategy for the years 2013-2015. Its preparation was based on results attained by Bank Millennium Group in 2012.

Despite unfavourable macroeconomic factors, the year was a good one for Bank Millennium Group. We ended the year with a record-high net profit of PLN 472 million. It was also another year of improving operational efficiency thanks to growth of revenue and consistency in cost control, in result of which the cost to income ratio was reduced to 57.4%. This is its lowest level in years. Bank Millennium, with a Capital Adequacy Ratio of 14.5% and Tier 1 at 12.9% is a well-capitalised, safe organisation with development potential.

In 2012 we continued to strengthen our position on the market. In retail banking we acquired 153,000 new Customers; Customer deposits were up 10.7% over the previous year and sales of cash loans rose 52% year-on-year. We increased the number of businesses served by 8%. Our factoring turnover went up markedly and our leasing offer was traditionally doing fine. This was also a period, during which we implemented innovative mobile banking solutions, both for private as well as business Customers, which made their daily relations with the Bank that much easier.

In 2012 Bank Millennium was again recognised and awarded by Consumers and independent experts in prestigious service quality rankings. These awards confirmed the significant progress, which we have made in the last years as regards the quality of relationship with our Customers.

Together with the Q3 2012 results Bank Millennium also announced the updated Group strategy for the years 2013-2015 with key medium-term targets. We will be attaining these targets coming from strong foundations, which provide the Bank with future growth potential, and with ambition running high to further improve results and market position. The strategy assumes continuation of sustainable growth, keeping high levels of all operational safety parameters, notably: a strong capital base, safe level of liquidity, effective risk management, permanent cost control and optimised processes. It is our aim to quickly improve operational profitability and efficiency, supported by sales of innovative products in the most valuable business areas, relying on advanced distribution channels, in mutually beneficial, long-term and partnership-based relationship with Customers from all segments.

The variable macroeconomic environment in 2013 as well as the possibility that some adverse economic factors appear on the domestic market make us go about implementing the 2013 plan with particular caution. Yet we still want to continue along the path of sustainable growth, running our business in a transparent and ethical way, creating value for Shareholders, Customers and Employees.


Sincerely yours, 

Boguslav Kott

Bogusław Kott

Chairman of Bank Millennium Management Board

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