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2018 Financial and Social Report

Millennium Goodie

Bank Millennium together with Millennium Goodie have been offering innovative smartshopping platform goodie since 2016. The platform, based upon mobile app and web site, constitutes a state-of-the-art open ecosystem of sellers, shops, commercial centres and customers. Using geo-location solutions, it provides users with the best, personalised promotional offers, offering also many additional benefits.

2018 has been a year of particularly strong development of the goodie smartshopping platform. The total number of app downloads reached the level of 900 thous., including as many as 790 thous. installations in 2018 only. At the end of the year, the goodie mobile app and web site presented 1150 brand names of traditional stores, internet shops and restaurants, informing about 2500 offers, discounts and sales. In goodie other consecutive loyalty programmes were launched for the first time allowing to set up, in total, 36 loyalty cards in commercial malls throughout Poland. Intense marketing campaigns including events in individual malls generated, in total, 400 thous. registered cards.

The breakthrough came with the launch of cashback service i.e. return of part of the money spent on online purchases. During merely four months nearly 10 000 people benefited from it with 59 000 transactions being made. The newest goodie function is loyalty card virtualisation. It is a way to conveniently collect all loyalty cards held into a single app.

Millennium Leasing

Millennium Leasing sp. z o.o., a subsidiary company of Bank Millennium, was established in 1991 and is one of the longest operating companies on the leasing market in Poland. Its activities cover financing of all fixed assets: motor cars and delivery vans, machines and equipment as well as equipment for majority of industries, heavy duty transport means (including: road, rail, water and air transport), and real estate.

The value of leasing agreements disbursed in 2018 amounted to the total of 3.5 bn PLN marking increase by 15% y/y. According to data of the Polish Leasing Association, the company is ranked 9 among leasing companies in Poland in terms of value of all leased items, with 4.9% market share. The scale of operation is illustrated by conclusion of more than 211 thous. agreements to the total of 31.6 bn PLN. As on 31 December 2018 the value of capital committed into active leasing agreements reached 6.5 bn PLN, i.e. increased by 13% y/y.

Millennium Leasing, as a socially responsible organisation, has been promoting awareness building and financial viability actions under energy efficient business operation. In 2018 the Company continued its programme „Leasing Eko Energia”, promoting energy efficient business in Poland. Company customers, when choosing assets to be financed from a broad range of energy efficient machines and equipment, could obtain a flexible bonus growing through years, at the level of up to 5%, depending upon the term of financing.

In 2018 Millennium Leasing also offered service Autokomfort+, introduced in 2016, which facilitates convenient, fast and economic maintenance of vehicles of up to 3.5 t of carrying capacity. This service provides customers with access to wholesale purchase of spare parts and maintenance and repair services at attractive, nationwide fixed discount also in authorised car repair garages.

In order to ensure comprehensive protection against risk connected with leased items, via broker intermediation, the company provides customers with a choice of services offered by leading insurance firms.

Services are sold by leasing advisers in 67 outlets located throughout Poland and supported by active cooperation with banking advisers in retail branches and in corporate banking network of Bank Millennium.

Investment funds Millennium TFI

Millennium Towarzystwo Funduszy Inwestycyjnych S.A. manages, at present three funds: Open Investment Fund with separate subfunds (Millennium FIO), Specialist Open Investment Fund with separate subfunds (Millennium SFIO) and non-public Closed Investment Fund Millennium Dividend dedicated for Bank Millennium Private Banking customers. Within open funds the Company offered, in 2018, participation units in 12 investment subfunds offering investment options covering investment strategies of various levels of risk.

In the last year, after very good 2017, the Company had to face a drop of value of assets it managed by more than 762 mln PLN, both due to drop in market value of capital market assets and negative balance of net inflows. Total value of assets managed by Millennium TFI amounted to, as at the end of December 2018, 4.22 bn PLN i.e. it decreased by 14.9% relative to the value as at the end of December 2017.

Year 2018 was extremely difficult for investors and asset management firms – majority of asset classes generated negative or very low rates of return and it had an negative impact upon rates of return generated by investment funds. In addition, turbulences on the Polish capital market triggered a decrease in investors’ confidence and significant outflows from investment funds in Q3 and Q4 2018.

Rates of return on investments in participation units in subfunds separated within Millennium FIO were negative except for Deposit subfund recording rate of return, as on the last day of valuation i.e. 28 December 2018 amounting to 0.73%. Among the Millennium SFIO separated subfunds, all recorded negative rates of return during 2018. Results were poorer due to, primarily, bearish market of equities listed on the WSE, accompanied by a drop of corporate bonds prices, as well as drop of emerging markets’ assets.

The Company’s investment fund offer, within 2018, remained unchanged. However, it is worth noticing that in view of the planned launching of the PPK (Employee Capital Programme), the Company, as from 2.01.2019, established a new umbrella fund Millennium PPK incorporating 6 target date subnfunds.

Brokerage activity – Millennium DM

Brokerage activities are performed, in the Bank Millennium Group, by a company Millennium Dom Maklerski S.A., offering broad range of brokerage services including, in particular, relative to execution of orders to purchase or disposal of financial instruments on the ordering party’s account, purchasing or disposal on own account of financial instruments, maintaining securities accounts and monetary accounts for purpose of servicing the former, investment advisory services, advisory services for entrepreneurs relative to capital structures and strategies as well as mergers, divisions, and acquisitions of enterprises, offering financial instruments, rendering services under performance of contracts on investment and service sub-issues, preparation of investment, financial analyses and other recommendations in the area of financial instruments.

In 2018 trading by Millennium DM on the equities market amounted to more than 3bn PLN, and this, according to the Stock Exchange data, provided the company with market share at 0.8%. As on 31 December 2018 Millennium DM serviced 25 thous. investment accounts, acted as market maker and issuer market maker for Stock Exchange listed companies and BondSpot listed corporate bonds.

In 2018 Millennium DM, as intermediary, cooperated in two public calls for subscription for shares of Warsaw Stock Exchange listed companies. Millennium DM intermediated also in purchase of shares in Konsorcjum Stali S.A. announced by the Company.

In 2018 Millennium DM also rendered analytical and advisory services to external customers and to companies from the Capital Group. The most important services included: provision of investment advice on insurance capital funds of one of the leading domestic insurers, due-diligence of investment funds and insurance associations cooperating with the Capital Group and analyses regarding sectors as well as public and non-public companies.