Corporate banking

The year 2016 was marked by a stable credit base, given difficult market conditions, resulting from moderate needs for company financing, as enterprises continue to have limited demand for banking product financing, which results from their good liquidity and possibility to cover a substantial part of current needs without recourse to credit funds. The volume of Corporate Banking credit products went up in 2016 by 0.6% up to PLN 14,301 million.

Bank Millennium has a comprehensive offer of credit products out of which the relationship manager selects products best suited to the client’s needs, i.e. loans for funding current financial needs, investment loans, leasing, trade finance products or products co-financed with EU funds.

In accordance with the plan of further strengthening of the Bank’s position in financing medium-sized companies the Bank plays an active role in financing clients belonging i.a. to capital and economic groups. The main product in implementing this task is the umbrella loan. This is a joint credit limit for enterprises, which form a group of related entities. The umbrella loan has functioned at the Bank for over a year now and is very popular among clients, as reflected in a steadily increasing number and value of granted loans.

Bank Millennium is actively involved in financing with EU funds. It offers among others the loan for technological innovations, which is one of the most popular SME programmes in the current EU perspective.

For almost 4 years the Bank has also actively participated in the national de minimis guarantee programme. In March 2016 – thanks to the use of funds  under the Innovative Economy Operational Programme the existing guarantee programme was expanded by free (for the client) „guarantees for innovation”. The „guarantee for  innovation” programme was run on a pilot basis and ended on 25 January 2017.

In 2016 Bank Millennium had a factoring turnover of 14.6 billion PLN. The business growth rate was 8.8%. In 2016 Bank Millennium moved from 5th to 4th place in the ranking of factoring institutions associated in the Polish Factors Association with a 9.2% share in this market. Factoring assets at the end of 2016 stood at PLN 1.93 billion.

In 2016 the Bank established cooperation with a specialised external entity, thanks to which we receive on an-going basis information about the occurrence of negative events regarding counterparties. As shown by statistics published by the Polish Factors Association the highest growth rate in terms of realised turnover comes from factoring without recourse. Bank Millennium is also moving in this direction. In 2016 over a half of its turnover value was realised this way.

In 2016 the amount of new limits granted by Bank Millennium for guarantees and letters of credit went up by 36% and stood at PLN 540.3 million.

A definite majority (80%) of guarantees and LC orders is realised through an e-platform and for letters of credit this ratio exceeds 95%. The number of clients with access to the on-line Trade Finance service went up by 16%.

The flexibility and broad functionality of the on-line Trade Finance module offered by Bank Millennium was appreciated (for the third time in a row) by the Global Finance magazine. The services available in it have been awarded in the ranking: „The 2016 World’s Best Corporate/Institutional Digital Banks In Central & Eastern Europe”, as the best in „The Best Trade Finance Services” category.

Client service in the Corporate Banking segment is provided through an extensive sales network covering the entire country. Clients have at their disposal Relationship Managers (being the first line of contact with the clients, taking care of them and looking for new solutions) and Consultants working in 31 Corporate Centres, supported by Product Advisors. They are very well trained professionals supporting clients in purchasing, sales and investment policy and current operation of accounts.

Thanks to a unique Bank Millennium development programme the Bank’s RMs regularly take part in training and knowledge sharing ending with specialist certification. Together with a team of product specialists they guide the Bank’s clients in adjusting products to individual company needs. Knowing the organisational specificity and business profile of enterprises in cooperation with various bank units they prepare new solutions attractive for the clients.

Our clients’ operations are conducted by Consultants. Bank Millennium runs a special development programme for them, thanks to which our services are constantly adjusted to current corporate client needs. This increases client satisfaction with banking services, as evidenced in annual satisfaction surveys.

Corporate banking clients can use modern tools, such as:

• user-friendly Millennium for Corporates internet banking system (with the „Trade Finance” module and Millennium FX Trader platform),
• mobile banking, i.e. access to accounts and banking operations and FX transactions through the mobile application,
• dedicated host to host communication

They have also unlimited use of all Bank branches. Cash management – apart from an extensive branch network – is also effected through the services of cooperating companies and a nightdrop network. There has been launched a payment machine service enabling the automatic settlement of regular and one-off payments for bank clients from the local government segment. Client payments are also possible in all Polish Mail branches.

The system logging process is secured by additional one-off passwords, supplied in a text message or generated by a special hardware token.  This guarantees the highest security level and is also simple and reliable in use. No computer connection is required and indeed it can be used irrespective of the client’s device or internet browser.

June brought the expansion of the scope of insurance for all corporate cards. Attractive changes were introduced for clients in the „Pakiet Podróżny” accident insurance. The card management module in the internet channel was enhanced by the pre-approval process and a number of other improvements. The number of card transactions in 2016 went up by 7%.

In the second half of the year the critical process was the update of FATCA statuses (Foreign Account Tax Compliance Act). Bank Millennium has met all the requirements of the new regulations, thus fulfilling all the compliance principles. We have also completed the adjustment to the EU Sepa end-date regulation by implementing the BIC application with IBAN.

2016 was also another year of consistent growth in the number of processed transactions and transactional products used by corporate clients. There was posted a 21% growth in the number of foreign transfers and 9% growth in the number of domestic transfers. The volumes of funds deposited on current accounts went up by 16%, thus improving the ratio of current funds to the total deposit volume by 7%.

The year 2016 was a continuation of intensive improvements in Millenet for Corporates.

The system has been enhanced by a module enabling the attachment and sending of documents required in the credit process. With this tool the client no longer has to personally deliver the documents to the branch or RM, but he prepares them and signs them on his own. It is enough to scan and attach the documents and then send them to the Bank. Thus transferred documents reach in real time the team which operates credit products. In addition, based on a signed statement, the clients do not have to manually sign all the documents. It is just enough to attach them in pdf, excel or word file and they will be included in the credit analysis process.

The solution met with great interest – at the end of 2016 it was used by 20% of loan clients and there is an upward trend.

In response to client needs Bank Millennium has also provided the possibility of importing payment orders to a file in the XML format. The new function allowed clients to adapt to EU regulations in the framework of SEPA changes and facilitated the data exchange process.

Yet another change in order to meet market expectations was to enhance Millenet by the possibility of creating  JPK_WB reports on clients demand in the format required by the Ministry of Finance. This service is a considerable improvement for entrepreneurs who must provide to tax audit authorities files in this particular format.

In order to increase service quality the „Virtual Advisor” function was launched. This solution allows a Bank employee to indicate on the user screen the elements of the Millenet system, which are being explained. This increases the effectiveness of support provided to the user and allows to be faster in solving any problems.

In March 2016 there was activated the SMS notification service. Clients can now receive text messages about the most important events connected with Bank services, e.g. debiting the account or card operation.

In 2016 the mobile banking application for entrepreneurs was enhanced by new functions.

In May Bank Millennium made available to corporate clients a mobile version of the Millennium Forex Trader platform. This is a modern and technologically advanced solution which enables comfortable access to the FOREX market and currency exchange directly in the mobile application. This offer meets the expectations of corporate banking clients who are increasingly turning to mobile solutions and gives them with the possibility of currency exchange and purchase at the most convenient time. It is among others thanks to such solutions that in 2016 the number of mobile banking users went up by 60%.

Bank Millennium was awarded for its activities in the area of electronic banking for business clients by „Global Finance” independent magazine in a ranking of Best Digital Banks 2016. The Bank was awarded in two categories: „Best Mobile Banking Application for Corporates in Central & Eastern Europe” and „Best Trade Finance Services in Central & Eastern Europe”.

Through the services of its Treasury Department Bank Millennium provides Bank clients with access to a broad portfolio of financial instruments. In 2016 the growth rate went up by 28%. The offer of the Treasury Department for Corporate Banking Clients covered a broad array of products: spot foreign exchange transactions, deposit products, FX volatility risk management instruments (FX forwards, FX swaps, options) and instruments to manage interest rate volatility (FRA, IRS and CIRS transactions).

The solutions offered by the Bank enable both importers and exporters to hedge FX risk, and thereby to calculate their costs and prices correctly. Clients may also hedge the risk of deterioration in their financial performance as a consequence of adverse movements in market interest rates in the future – the proposed solutions make it possible to set a fixed cost of funding and interest income without any amendments to existing credit facilities or lease agreements.

In 2016 the Treasury Department continued its efforts to sell actively the Millennium Forex Trader transaction platform, through which Corporate Banking clients enter, on their own, into spot and forward foreign exchange transactions and foreign exchange swap transactions as part of the integrated Millenet transactional platform. At the end of 2016 the Bank’s platform was actively used by 2,000 clients.

Bank: Millennium offers custody services based on an individual permit granted by the Securities and Exchange Commission. Bank Millennium is a direct participant in depository and clearing systems such as Central Securities Depository of Poland (KDPW), the NBP’s Register of Securities and international clearing houses like Euroclear Bank SA/NV and Clearstream Banking Luxembourg etc.

The Custody Department’s clients are domestic and international financial institutions (global custody banks, custodian banks of global depository receipts, investment banks, asset management institutions, insurance companies, investment fund institutions, investment funds) as well as other legal persons actively participating in the capital market and money market operations who require comprehensive and customized service.

Bank Millennium is one of the leaders in Poland in terms of the number of domestic and international clients who entrust their assets to us for custody purposes. As at 31 December 2016, the value of assets on clients’ securities accounts stood at PLN 41.5 billion. At the end of 2016 the Bank operated 12,583 securities accounts and acted in the capacity of the custodian for 85 investment funds.

Last year the parameters for the functioning of the international loan market, including in particular syndicated loans that in the past formed a major source of stable funding in foreign currencies for the Bank did not undergo significant change. Therefore, no new agreements were concluded in this area. The servicing and management of the hitherto and new agreements concluded with international financial institutions were nevertheless continued, especially with the European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB). As of 31 December 2016 those included the following:

• Agreement concluded with EIB in December 2016 for granting a loan in the amount of 100 million EUR intended for increasing the possibility of the Bank’s financing SMEs (including in the form of leasing).
• Agreement concluded with EBRD in December 2015 concerning a medium-term loan for EUR 50 million extended by EBRD under the PolSEFF Leasing project (Polish Sustainable Energy Financing Facility for Leasing). The funds from this loan will be made available to the Bank’s clients using funding in the form of leasing (through Millennium Leasing), intended for investments to enhance the energy efficiency of operated machinery and equipment and to reduce the costs of utilised energy. The final loan repayment will be made in December 2020.
• Agreement concluded with EBRD in December 2013 concerning a medium-term loan for the equivalent of EUR 75 million intended to increase Bank Millennium’s ability to fund SME sector clients in selected regions of the country. This loan was originated in CHF in two tranches with the final maturity for the various tranches falling in December 2018 and December 2019.
• Global Loan concluded with EIB in December 2010 for EUR 100 million in support of the bank’s actions to fund investments implemented by the small and medium enterprise sector. The loan shall be repaid in 2017-2019 (depending on the date of paid-in tranche).

Last year the Bank continued projects related to the process (continued for many years) of strengthening the base of credible counterparties and partners on the interbank market, especially in the segment of instruments related to managing medium and long-term liquidity in foreign currencies. One of the important aspects of activities in this area was to manage the portfolio of agreements with domestic and foreign banks (including ISDA and GMRA), which must be regularly adjusted to variable regulations and market requirements. At the same time the Bank took measures related to the gradual implementation of the EMIR Regulation (European Market Infrastructure Regulation) and its applicability to activities related to executing transactions pertaining to the various categories of derivatives on the OTC market.

Irrespective of the above activities, last year the Bank carried out on an on-going basis all other tasks connected with its overall international activities, in various areas involving, inter alia, current financing of the Bank’s own and its clients’ needs, servicing of foreign trade transactions, participation in international money market and currency operations, capital market activities. Achieving the above objectives resulted largely from the process of development of the Bank’s cooperation with its foreign partners and counterparties, over more than 25 years. The Bank maintains contacts with nearly a thousand correspondent banks and their units located in all countries significant in terms of the structure of Poland’s foreign trade and non-trade transactions.

In parallel to arrangement of mid-term funding in the international market Bank Millennium has in recent years successfully issued PLN denominated debt in the domestic market (in 2014 with the nominal value of PLN 500 million and in 2015 year PLN 300 million).

However, in 2016 a company from Bank Millennium Group issued 5 series of 2-year unsecured bonds with the total nominal value of PLN 124 million as a private placement offer. These bonds are held by individual investors.