Letter from the Chairman of the Management Board

After the merger, Bank Millennium Group, with Head Offices in Warsaw, Wrocław and Gdańsk, serves 2.6 million active retail customers. By expanding the branch network with Euro Bank’s branches it has increased its presence in many new smaller towns. Record-high sales of cash loans and the merger effect brought doubling of the value of the consumer loans portfolio to PLN 15.1 billion. Customers’ deposits reached PLN 81.5 billion and loans stood at PLN 69.8 billion. The Group finished the year with a significant liquidity surplus and strong capital ratios.

The Group’s consolidated net profit totalled PLN 561 million. Were it not for one-off cost and provisions mainly for integration with Euro Bank and legal risk of the portfolio of FX mortgage loans, it would have been PLN 889 million (+17% y/y).

Despite huge commitment to the process of merging with Euro Bank, the last 12 months brought double-digit organic growth and further business development – i.a. record high sales of mortgage loans – PLN 4.2 billion (+26%y/y) and cash loans – also PLN 4.1 billion (+28% y/y). We are growing faster than planned, which is a good forecast as regards strategy implementation in 2020, the last year of its validity.

Without taking advantage of digital potential and focusing on positive customer satisfaction, the excellent results and effective merger would not have been possible. Consumers see and highly appreciate it. In the customer behaviour and preference survey by Bain&Company advisory company we had the highest NPS among Polish banks; in the Banking Stars competition we won the title of “Customer Relationship Star”; in KPMG’s TOP 100 brands report we became the leader in “Customer Experience” of the Polish financial sector and among first ten best brands in Polish economy. In 2019 the Bank offered entirely new online banking service and entirely new banking app as well as aligned its services to the requirements of PSD2. Next year it is planning further development of open banking, including aggregation of accounts and information about accounts in other banks in the mobile app and the Millenet system.

In 2020 economic growth will be slowing down gradually and according to our forecasts it will be down to 3.2%. Despite the slowdown, Poland’s economy will remain one of the fastest-growing among EU countries. This will be supported by a still good situation on the labour market, social transfers as well as reduction of income taxes. Although inflation will be highest since 2012 (3.4% y/y according to forecasts), due to poor prospects regarding CAPEX projects, the Monetary Policy Council shall strive to stabilise interest rates. In these circumstances the overriding goal of the Bank will still be strong organic growth, profitability improvement and fast pace of customer acquisition. Apart from cost synergy, we will be integrating as a team and harmonising processes.

Joao Bras Jorge

Chairman of the Management Board of Bank Millennium