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2018 Financial and Social Report

Business model

Bank Millennium operates according to a business model predicated on five pillars:

We are the most customer-focused bank that is constantly developing. We want to be the most personalized bank operating on a mass scale.

We are the leader in digital banking by offering high quality services blended with an extensive reach.

We are growing the fastest among banks in acquiring clients with whom we hold the main relationship. Moreover, we added four new drivers (investments, consumer loans, microbusinesses and SMEs and corporates) to our 2018-2020 strategy to complement our current sustainable growth driver (acquiring current accounts).

We have the leading cost effective business model built by harnessing the most sophisticated technology that is flexible when it comes to changes and the Bank’s growing size.

We have a flexible operating model, an organizational culture that facilitates rapid response and digital and data analysis competences.

The firm’s values form the foundation of our business model: building relations based on trust, a passion for quality and innovation, employee development and promoting collaboration and the ever constant ambition to aim higher.

Value creation model

The Bank Millennium Group’s capital poises it to grow its business as it simultaneously creates value for its Stakeholders.

The Bank Millennium Group’s capital...

Shareholder equity

Assets, Loans and Liabilities

  • PLN 8,384 million – own funds (including net profit)
  • PLN 72,075 million – total liabilities
  • PLN 52,712 million – net loans
  • PLN 80,459 million – total assets

Employees, their knowledge, values and attitudes that make it possible to grow the company.

  • 6,270 – number of employees
  • 100% of the employees have been trained on our Code of Ethics
  • 41 – average number of training hours per employee

Culture of rapidly responding to change (agility), sophisticated infrastructure and IT systems, digitization and optimization of processes making it possible to develop innovative products and offer high quality services, organization’s cost effectiveness.

  • +34% y/y – users of the mobile banking application and mobile Millenet
  • +173% r/r – sales of urban transport tickets through the mobile application
  • 61 – NPS for retail clients
  • 46.5% – cost/income ratio

Investments in modern technological solutions and innovations, the bulk of IT development is in-house, internal start-up goodie, internal UX Design team.

  • Nearly 60% of capital expenditures are for IT development
  • 293 – number of IT employees
  • 75% – employees holding a university education
  • Market’s digital leader according to the report entitled Deloitte EMEA Digital Banking Maturity 2018

Quality of relations with the environment, Bank reputation, transaction safety, enhancing the society’s financial awareness.

  • NPS 61 for retail clients (the highest on the market in the research done by ARC Rynek i Opinia)
  • 78% of our clients maintain their main relationship with the Bank
  • 47% of our clients recommend the bank to others
  • 33,000 children trained in the fundamentals of finance
  • Nearly 7,000 beneficiaries of our employee volunteering programs

Direct and indirect environmental impact and its minimization.

  • -32% – reduction of CO2 y/y

… support business development through:

  • Process optimization and digitization
  • Marketing products and banking services making everyday life easier
  • Facilitating access to non-banking services
  • Designing the goodie smart shopping platform
  • Creating a work culture to facilitate rapid response to changes
  • Organic growth and acquisition (Euro Bank)

... and create value for Stakeholders:

Banking for all – no physical, infrastructural and digital obstacles 36% are mobile app users

72% of the branches are accessible to disabled persons

100% of the ATMs are accessible to disabled persons

Non-banking digital functionalities, e.g. e-administration 36% are mobile banking users

86% are internet banking users

High quality of service 61 – NPS for retail clients

On the podium in all the categories in “Newsweek’s Friendly Bank” ranking (1st place for “Mobile Banking”, 2nd place for “The Bank For the Everyone” and 3rd place for “Internet Banking” and “Mortgage Banking”)

1st in the financial sector and in TOP 10 best Polish brands in Customer Experience according to market research published by KPMG

Ethical sales 100% of the employees have been trained on our Code of Ethics
HR awards, employee turnover ratio Distinction as the Sound Employer of the Year 2018

4% – employee turnover ratio

Education and development 41 – average number of training hours per employee

16% – employees who were promoted in 2018

Respect for diversity 87% – returns to work following maternity leave

59% are women holding managerial positions

Profitability 9.6% – Return on Equity (ROE)
Earnings for shareholders -0.8% – share price decline in 2018 (the best performance in the banking sector and versus other indices)
Low risk 21.7%-TCR (total capital ratio)
High standards of ESG management Member of the Respect Index on the Warsaw Stock Exchange (WSE), adherence to the Best Practices of Companies Listed on WSE and Corporate Governance Principles
Ethical cooperation 82% of all invoices paid within a range up to 30 days
Responsibility in the supply chain 100% of newly-executed contracts have a clause obligating suppliers to apply the principles of the Bank Millennium Group’s Code of Ethics
Employee volunteerism 441 volunteers engaged in social campaigns

6,987 beneficiaries in volunteer campaigns

Financial education 33,000 children participated in workshops
Promotion of Culture PLN 797,983 – sponsoring of culture
Expenditures for social purposes PLN 426,855 – Bank Millennium Foundation’s expenditures on social goals
45%*- effective tax rate

* In 2018 banking tax grew by 5.4% yearly (higher assets) and income tax grew by 8.2% (higher income). When summing both taxes (PLN 463 million) and VAT paid by the Bank (PLN 30 million), effective tax rate reached 40% of operating profit. If adding other obligatory payments for public purpose (BFG contribution and KNF costs), effective tax rate increases to 45%. While the cut of obligatory reserve remuneration, done by NBP since January 2018, decreased operating profit of the Bank in 2018 by PLN 17 million. 

Additionally, Bank Millennium has joined the SKOK turnaround process supported by the Polish Financial Supervision Authority (KNF) and the Bank Guarantee Fund (BFG). Conveyance of SKOK Piast supported efforts to ensure stability of the national financial system and to ensure safety for all clients of financial institutions in Poland. On the basis of decision of the Polish Financial Supervision Authority on 17 October 2018, Bank Millennium took over management of the assets of Cooperative Credit Union SKOK Piast.

Minimizing the environmental impact -32% – reduction in CO2 emissions y/y