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Our Performance
Strong growth of profitability
* Compound average growth rate
- 2014 net profit at PLN 651 million: +21.5% y/y
- ROE improved yearly from 10.6% to 11.8%
- Cost-to-income decreased strongly by 4.1 p.p. yearly to 50.2%
Solid core income yearly growth
* Pro-forma data: margin from all derivatives hedging FX denominated loan portfolio is presented in interest revenue (hedging derivatives) and NII, whereas in accounting terms part of this margin (PLN 10.9 million in 2014 and PLN 50.8 million in 2013) is presented in Result on Financial Operations.
- Net interest income up 15.3% y/y, despite lower than expected market interest rates
- Net commissions up 3.9% y/y
Very solid asset quality, externally proven by AQR
* Coverage of gross impaired loans by total provisions (including IBNR)
- Impaired loans ratio at 4.2% - the lowest in the last 6 years
- High coverage ratio of impaired loans by provisions at 71%
Stable liquidity and stronger capital ratios
- Loans-to-deposits* ratio at comfortable 92% level
- Loans to stable sources of funding** at 88.4%
- TCR*** at 15.2% and CET1 *** at 14.5%
* Deposits include Bank's debt securities sold to individuals and repo transactions with customers.
** Stable sources of funding : deposits plus all debt securities issued (including subordinated debt) and medium-term funding from financial institutions.
*** Calculated in accordance with CRR/CRD4 rules and with partial IRB approach (on mortgage and revolving retail loans) but under regulatory constraint.
Our Performance
* Compound average growth rate
- 2014 net profit at PLN 651 million: +21.5% y/y
- ROE improved yearly from 10.6% to 11.8%
- Cost-to-income decreased strongly by 4.1 p.p. yearly to 50.2%
* Pro-forma data: margin from all derivatives hedging FX denominated loan portfolio is presented in interest revenue (hedging derivatives) and NII, whereas in accounting terms part of this margin (PLN 10.9 million in 2014 and PLN 50.8 million in 2013) is presented in Result on Financial Operations.
- Net interest income up 15.3% y/y, despite lower than expected market interest rates
- Net commissions up 3.9% y/y
* Coverage of gross impaired loans by total provisions (including IBNR)
- Impaired loans ratio at 4.2% - the lowest in the last 6 years
- High coverage ratio of impaired loans by provisions at 71%
- Loans-to-deposits* ratio at comfortable 92% level
- Loans to stable sources of funding** at 88.4%
- TCR*** at 15.2% and CET1 *** at 14.5%
* Deposits include Bank's debt securities sold to individuals and repo transactions with customers.
** Stable sources of funding : deposits plus all debt securities issued (including subordinated debt) and medium-term funding from financial institutions.
*** Calculated in accordance with CRR/CRD4 rules and with partial IRB approach (on mortgage and revolving retail loans) but under regulatory constraint.
Strategy
- Sustainable value creating growth in retail and corporate
- Consolidating platform in key areas: digital, risk and analytics
- Continue building operational efficiency
- Strong liquidity and capital allowing stable dividend policy
Sustainable value creating growth in retail and corporate
- Significant acceleration of net Client growth through increased network effectiveness and optimized footprint, digital channels and acquisition of mass affluent.
- Increasing market share of retail Customer funds to above 6%.
- Value creating growth in corporate, loans market share of 4% while increasing profitability, reducing cost of risk, further strengthening position in specialized finance (leasing, factoring).
Consolidating platform in key areas: digital, risk and analytics
Transforming digital channels to powerful engagement platforms: omnichannel, mobile payments. maximizing customer value through usage of advanced business analytics.
Continue building operational efficiency
Profitability preservation due to focus on high margin products.
Strong liquidity and capital allowing stable dividend policy
* Subject to KNF recommendations and regulatory environment
Strategy
- Significant acceleration of net Client growth through increased network effectiveness and optimized footprint, digital channels and acquisition of mass affluent.
- Increasing market share of retail Customer funds to above 6%.
- Value creating growth in corporate, loans market share of 4% while increasing profitability, reducing cost of risk, further strengthening position in specialized finance (leasing, factoring).
Transforming digital channels to powerful engagement platforms: omnichannel, mobile payments. maximizing customer value through usage of advanced business analytics.
Profitability preservation due to focus on high margin products.
* Subject to KNF recommendations and regulatory environment
Awards & Achievments
Bank Millennium Service Quality Star
Thanks to positive opinions of its customers, Bank Millennium has again been ranked among the friendliest companies and was awarded the title of 2014 Service Quality Star. The awarded companies from several dozen sectors include those, which to the greatest extent respond to today’s market needs and are most often recommended by customers for 2014. Bank Millennium received this prestigious title for the third time already (previously in 2013 and 2011).
Bank Millennium in Newsweek ranking top 2
Bank Millennium came 1st in the "Internet Banking" category in Newsweek’s latest "Friendly Bank” ranking. Bank Millennium also took the high 2nd place in the "Traditional Banking” category and was classified 2nd in "Mortgage Banking”.
The 13th annual Newsweek Ranking was based on a service quality audit carried out by means of the "mystery shopping” method and an assessment of the attractiveness of offers of largest banks in Poland.
Bank Millennium one of the best banks for deposits and investments
Bank Millennium was ranked 2nd on the list of "Best banks for deposits and investments”, prepared by the Comperia.pl financial comparison website. Authors of the list evaluated extensiveness and flexibility of savings and investment solutions in Polish banks. The top three on the list are banks, which offer particularly generous interest rates on deposits and savings accounts and offer a broad range of products and services to customers.
Bank Millennium 1st place of the Savings Account
Bank Millennium’s Savings Account took the first place in the ranking prepared by Expander. The ranking assessed 13 accounts and the main evaluation criterion was the value of interest rate. The winner was Bank Millennium’s special offer (4% for the new funds) prepared for Konto 360º Account.
Bank Millennium The best macroeconomic forecasts
Macroeconomic Research Bureau of Bank Millennium was placed 1st in the ranking of forecasters of Polish financial institutions prepared by "Parkiet" daily in 2014. Macroeconomic part covers i.e. inflation, labour market, money supply, balance of payment and domestic demand (production, retail sales, GDP, investments, consumption). Ranking of financial market indicators includes forecasts of EURPLN, USDPLN, reference rate, WIBOR 3M, 2Y Bond, 5Y Bond, WIG20 in a perspective of 1 months, 1 quarter, and 2 quarters. Forecasts were collected from ca. 24 institutions.
Results by segments
Retail
Business
+24%
cash
loan portfolio
231.000
new current
accounts
+10.2%
retail
deposits
- Record cash loans sale of PLN 589 million in 4Q and 2.1 billion in entire year, portfolio grew 24% y/y
- 231 thousand new current accounts thanks mainly to Konto 360º campaign
- Very solid growth of retail deposits at 10.2% y/y
Companies
Business
+13%
loans
growth
2.3 PLN
billion
leasing
+30%
factoring
- Total loans to companies grew by 13% yearly, outperforming average market growth
- Leasing new asset financing at PLN 2.3 billion; 18% yearly growth
- Factoring yearly turnover of PLN 12.1 billion gives 30% yearly growth, more then double of entire market growth (+13%)
Results by segments
+24%
cash
loan portfolio
231.000
new current
accounts
+10.2%
retail
deposits
- Record cash loans sale of PLN 589 million in 4Q and 2.1 billion in entire year, portfolio grew 24% y/y
- 231 thousand new current accounts thanks mainly to Konto 360º campaign
- Very solid growth of retail deposits at 10.2% y/y
+13%
loans
growth
2.3 PLN
billion
leasing
+30%
factoring
- Total loans to companies grew by 13% yearly, outperforming average market growth
- Leasing new asset financing at PLN 2.3 billion; 18% yearly growth
- Factoring yearly turnover of PLN 12.1 billion gives 30% yearly growth, more then double of entire market growth (+13%)
Consolidated financial statements
Synthetic P&L account
| (PLN million) | 2013 pro-forma | 2014 pro-forma | 4Q 2013 pro-forma | 3Q 2014 pro-forma | 4Q 2014 pro-forma |
|---|---|---|---|---|---|
| Net interest income* | 1.270,8 | 1.465,0 | 345,7 | 377,1 | 354,0 |
| Net commission income | 588,7 | 611,7 | 147,4 | 150,9 | 142,2 |
| Other non-interest income ** | 146,8 | 138,9 | 30,2 | 35,4 | 44,6 |
| Operating Income | 2.006,4 | 2.215,6 | 523,3 | 563,4 | 540,8 |
| General and administrative costs | -1.035,2 | -1.056,1 | -261,3 | -264,9 | -263,6 |
| Depreciation | -54,3 | -55,3 | -12,6 | -13,1 | -15,5 |
| Total operating costs | -1.089,6 | -1.111,4 | -273,8 | -278,0 | -279,1 |
| Net provisions | -234,1 | -265,5 | -63,2 | -61,7 | -64,0 |
| Operating profit | 682,7 | 838,7 | 186,3 | 223,7 | 197,7 |
| Pre-tax profit | 680,6 | 838,5 | 185,9 | 223,7 | 197,5 |
| Income tax | -144,8 | -187,5 | -42,8 | -50,5 | -39,8 |
| Net profit | 535,8 | 650,9 | 143,0 | 173,2 | 157,7 |
(*) Pro-forma data. Margin from all derivatives, including those hedging FX denominated loan portfolio, is presented in Net Interest Income, whereas in accounting terms part of this margin (PLN 50.8 million in 2013 and PLN 10.9 million in 2014) is presented in Result on Financial Operations.
(**) includes FX results, results on financial operations (pro-forma) and net other operating income and costs
Business segments results
| (PLN million) | Retail segment | Companies segment | Treasury, ALM and other | ||||||
|---|---|---|---|---|---|---|---|---|---|
| 2013 | 2014 | change | 2013 | 2014 | change | 2013 | 2014 | change | |
| Net interest income | 952,2 | 1138,5 | 19,60% | 320,6 | 321 | 0,10% | -52,8 | -5,3 | - |
| Net commission income | 457,8 | 475,9 | 4,00% | 126,5 | 132,3 | 4,60% | 4,4 | 3,5 | -21,50% |
| Other income * | 95,7 | 87,5 | -8,60% | 31,5 | 50,7 | 60,70% | 70,4 | 11,6 | -83,50% |
| Total operating income | 1505,7 | 1701,8 | 13,00% | 478,6 | 503,9 | 5,30% | 22,1 | 9,8 | -55,60% |
| Total operating expense ** | -827,2 | -841,6 | 1,70% | -196,7 | -207,9 | 5,70% | -65,7 | -61,9 | -5,80% |
| Cost/Income | 54,90% | 49,50% | -5,5 p.p. | 41,1% | 41,20% | 0,1 p.p. | - | - | - |
| Pre-provisions income | 678,5 | 860,2 | 26,80% | 281,9 | 296,1 | 5,00% | -43,6 | -52,1 | - |
| Net provisions | -121,8 | -126 | 3,40% | -110,7 | -139,1 | 25,60% | -1,6 | -0,4 | -75,30% |
| Pre-tax income | 556,7 | 734,2 | 31,90% | 171,2 | 157 | -8,30% | -47,3 | -52,7 | - |
(*) including FX income
(**) without impairment charges
Balance sheet
| ASSETS (PLN million) | 31.12.2013 | 30.09.2014 | 31.12.2014 |
|---|---|---|---|
| Cash, balances with the Central Bank | 3.412 | 1.705 | 2.612 |
| Loans and advances to banks | 1.519 | 1.710 | 2.384 |
| Loans and advances to customers | 41.765 | 43.847 | 44.142 |
| Amounts due from reverse repo transactions | 242 | 382 | 156 |
| Debt Structure | 8.673 | 11.731 | 10.176 |
| Derivatives (for hedging and trading) | 629 | 482 | 502 |
| Shares and other financial instruments | 4 | 8 | 10 |
| Tangible and intangible fixed assets | 204 | 192 | 213 |
| Other assets | 566 | 599 | 544 |
| Total Assets | 57.017 | 60.658 | 60.740 |
| LIABILITIES AND EQUITY (PLN million) | 31.12.2013 | 30.09.2014 | 31.12.2014 |
|---|---|---|---|
| Deposits and loans from banks | 2.349 | 2.087 | 2.037 |
| Deposits from customers | 45.305 | 47.434 | 47.591 |
| Liabilitities from repo transactions | 115 | 314 | 60 |
| Financial liabilities at fair value through P&L and hedging derivatives | 1.505 | 1.778 | 2.020 |
| Liabilities from securities issued | 701 | 1.749 | 1.739 |
| Provisions | 67 | 97 | 99 |
| Subordinated liabilities | 623 | 631 | 640 |
| Other liabilities | 989 | 912 | 789 |
| Total Liabilities | 51.653 | 55.002 | 54.975 |
| Total Equity | 5.363 | 5.656 | 5.765 |
| Total Liabilities and Equity | 57.017 | 60.658 | 60.740 |
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