The Bank Millennium Group’s goal in 2019 is to blend the effective execution of the transaction involving the Euro Bank acquisition with sustaining robust organic growth and retaining a high level of innovation.
After obtaining all the necessary consents and finalizing the transaction, Bank Millennium assumes that it will conduct the legal and operational merger with Euro Bank in the second half of 2019. The full operational merger will be preceded by migrating all data of Euro Bank clients and products to Bank Millennium’s platform. Bank will operate under the Millennium logo.
The Bank presumes that its major targets specified in the organic growth strategy for the 2020s will be achieved at least in line with the magnitude of its intentions or may undergo significant acceleration thanks to the merger. The first group consists of tasks for the micro and corporate segment in which the plan is to maintain the high pace of growth despite the anticipated slight economic slowdown in Poland. A database of 1.4 million new clients forming the basis for offering the Bank’s current products will be added in the retail segment to augment the current rapid growth in client and product numbers. Thanks to the merger there should be a particularly high amount of acceleration in the sales of consumer loans. First, the current portfolio will double in size in a single moment; and second, the Bank will acquire Euro Bank’s competences in extending these loans to new clients. The Bank is also getting poised to ratchet up its exposure to mortgage loans, driven both by the acquired portfolio and by maintaining the fast clip of sales of new loans. To support business development in this area, last year the Bank launched a project to set up a mortgage bank. The plan calls for obtaining the pertinent licenses and launching operational business in 2019 whereby the Bank Millennium Group will gain the capability of issuing covered bonds.
The execution of the growth strategy relating to investment products will hinge on capital market trends and the method and consequences of implementing the MiFID2 regulation, which may precipitate continuation of the unfavorable trend seen on this market since last year. The Bank is also positioning itself in 2019 to face the challenges related to the full-scale implementation of the PSD2 payment services directive. Operating in the face of greater exposure to competition posed by other banks and players moving into payment services will depend to a greater extent on the effectiveness of maintaining relations with clients whose expectations are on the rise and require more extensive personalization of services while leveraging the latest solutions and digital techniques. Retaining a leading position in the quality of services and their digitization continues to be an unwavering goal of the Bank Millennium Group and will have the necessary backing in 2019 and subsequent years in the form of the indispensable investments focused on innovation.
Effectively combining the merger with sustaining rapid organic growth should enable the Bank to achieve or surpass its major mid-term targets under the 2020 strategy, including in particular the reduction of its cost/income ratio to 40%, generation of net profit totalling PLN 1 billion and generation of ROE that would place the Bank among the top three leading banks in Poland.