The goal of the Bank Millennium Group for 2019 will be a combination of effective implementation of the Euro Bank acquisition transaction with continued solid organic growth accompanied by high innovation level.
As regards the acquisition transaction, after obtaining all the approvals, the Bank assumes the closing of the legal merger in the 3rd quarter of 2019 year, which will enable an effective merger of the organisational structures of both banks. The full operational merger is planned by the end of the year and will be preceded by the migration of all the customers and products of the acquired bank to the platform of Bank Millennium. After the merger the Bank will operate under Millennium logo.
The planned Euro Bank acquisition transaction is the biggest transaction of such scale with Bank Millennium’s participation in 20 years. Despite this, the Bank intends to conduct the merger in a way interfering to the minimum extent with its current operations.
Thus, Bank Millennium assumes that the main goals specified in the organic growth strategy for the year 2020 will be implemented in at least the same assumed scale or will be considerably accelerated thanks to the merger. The first group includes tasks for the micro and corporate segment, where it is planned to maintain a high pace of growth despite an expected slight economic slowdown in Poland. In the retail segment the currently fast increase in the number of customers and products will be supplemented by the base of 1.4 million new customers providing the basis for the penetration of the present Bank products. Particularly high acceleration thanks to the merger should take place in consumer loan sales. First of all, there will be an initial doubling of the present portfolio, and secondly the Bank will acquire the competences of Euro Bank in granting such loans to new customers. The Bank is also preparing to increase its exposure in terms of mortgage loans, both thanks to the acquired portfolio and also by maintaining a high rate of selling new loans. In order to support business development in this area, the Bank started last year the project of setting up a mortgage bank. The obtaining of suitable licenses and starting its operations is planned for 2019, thanks to which the Bank Millennium Group will gain the possibility of issuing covered bonds.
The Bank’s task for the coming quarters will also include the effective implementation of the process of utilising the complementary network of branches, mainly in small towns, where Bank Millennium has not been present so far. It is initially estimated that the Euro Bank network (based mainly on the franchise model) will add over 200 of such towns totalling 4.5 million residents. At the same time the process of closing overlapping branches will take place in order to achieve full synergy effects.
The implementation of the growth strategy in the investment product area will depend on capital market trends and the manner and consequences of implementing the MiFID2 regulation, which may cause continuation of the last year’s negative trend on this market. The Bank is also preparing in 2019 year for challenges related to the full implementation of the PSD2 payment system directive. Operating in conditions of more openness to competition, from banks and players getting involved in payment services, will more and more depend on the effectiveness in maintaining relations with customers, whose expectations are growing and require more personalisation of services with the use of state-of-the-art solutions and digital technologies. Bank Millennium intends to meet these challenges by maintaining the highest standards in these areas. Keeping leadership position in quality and digitalization remains the Group’s target and will be supported in 2019 and following years by needed investments on innovations.
An effective combination of the merger project with maintaining a fast pace of organic growth should enable the Bank to reach or exceed the adopted main medium-term goals of the 2020 strategy.