Retail banking

In 2019, the sale of savings and checking accounts increased by 15% compared to the previous year, exceeding 495 thousand accounts (from November 11, sales were carried out in a combined network of banks). The key product driving the acquisition of new customers was Konto 360°, invariably one of the most frequently opened personal accounts in Poland. In 2019, the number of Konto 360° accounts in the Bank’s portfolio exceeded 1.5 million, out of which most were opened by customers who had no prior personal accounts in Bank Millennium.

The promotion of Konto 360° accounts in 2019 was supported by:

• successive stages of advertising campaigns in TV stations and cinemas;
• promotional activities using the goodie shopping app and in cooperation with external Internet portals – more than 21% of personal accounts were acquired online;
• new editions of the “Lubię to polecam” recommendation program, in which attractive prizes were available for recommending Konto 360° or Konto 360° Student accounts. By December 31, more than 670 thousand customers were registered in the program.

Additionally, in the period from September to, a promotional campaign for Konto 360° Student accounts was executed in schools and universities. These activities, as well as the option to open Konto 360° Junior accounts in the internet banking system encountered great interest among young customers and parents.

The year 2019 was full of challenges in the management of the deposit base. Despite the unfavourable market environment with low interest rates, competition from other banks, real estate market and retail treasury bonds, as well as additional tasks related to the acquisition of Euro Bank, the Bank managed to take advantage of the funds of individuals growing on the market. The amount of deposits of retail clients, including acquisition, increased by PLN 13.9 billion (+28% y/y) up to PLN 63.7 billion. Acquisition of deposits from SKOK Piast and Euro Bank, combined with an organic growth of Millennium customer deposits, allowed the Bank to increase its market share by 1.1 pp up to 7.26% in November 2019. Despite the dynamic growth of its deposit portfolio, the Bank still managed to improve its profitability to 0.56% (up from 0.52% at the end of 2018), reducing the cost of financing by 4 bps.

Following a thorough rebuilding of the basic savings products offering in 2017 and 2018, in 2019 the Bank focused on taking over the deposit portfolios of the acquired banks, improving the profitability of its liabilities, and in the context of acquiring new volumes on actively promoting and marketing the Konto Oszczędnościowe Profit savings account with attractive interest rates for new funds. It enjoyed unfaltering interest among customers, as a result of which the funds accumulated on Konto Oszczędnościowe Profit accounts increased by more than 1/3. Addressing the growing market need to deposit surplus funds in foreign currencies, the Bank continued the offering of promotional interest rates on savings accounts in euro and US dollars, driving an increase in the funds deposited there by over 30%.

The Bank consistently implemented the strategy of offering a diversified portfolio of investment products, which consisted of its own solutions as well as products provided by external partners. Depending on the customer segment, the offer consisted of structured products, investment funds, unit-linked insurance products or bonds.

The Bank developed an attractive offering of savings and investment products providing customers with diverse vehicles for investing funds. In early 2019 it introduced Millennium TFI investment plans to its offering. At present, three plans are available with different potential profit and risk levels. In each of the plans, money is invested in Millennium TFI funds. The Bank does not charge any handling fees for the purchase of fund units and the minimum investment amount is PLN 500. The new offering is available to customers in each segment and in the mass client segment it constitutes the main portion of the investment offer.

The Bank also launched regular promotional campaigns, offering promotional fees for the purchase of fund units. It also continued the strategy of rewarding the customers for using remote channels, by reducing the handling fees for the purchase of fund units by an additional 50%.

To ensure compliance with the law, the Bank sent out ex-post reports presenting costs incurred by customers who held investment products in 2018. The Bank also took ongoing action to align its activity with UKNF’s positions on the acceptance of the so-called performance incentives.

Since the beginning of 2019, the Bank’s retail lending activity continued to increase; organic sales of cash loans at Bank Millennium reached PLN 4.1 billion (+28% y/y) (Euro Bank data from 9th of November 2019). This was driven by a competitive product offering and attractive promotions targeted at new customers and selected market segments. As a result, the high rate of sales was maintained for the entire year. Another important factor was the quick pace of growth of loan sales through electronic channels (48% y/y), in particular in the mobile channel (141% y/y). Excellent sales and the merger effect brought doubling of the value of the consumer loans portfolio to PLN 15.1 billion.

In 2019, cash loan sales were supported by:

• “PLN 100 of instalment for each PLN 5,000 of a loan” offer for loans in the amounts of PLN 5,000, PLN 10,000 or PLN 15,000 granted for 60 months, with monthly instalments known in advance in the amount of PLN 100, PLN 200 or PLN 300, respectively.
• continuation of the offer for financial sector employees

Clients interested in a favourable transfer of debts outstanding in other banks to Bank Millennium were able to use a debt consolidation loan as part of special offers with repayment insurance, lower interest rates and without any commission on the transferred amounts. The debt consolidation loan was supported by:

• promotional offer with a 5.7% interest rate if optional insurance is used or 6.7% for uninsured loans.
• further development of consolidation loan sales through telephone channels

The year 2019 may be described as a year of stable growth and a continuing attractive offer. The Bank continued to pursue the strategy of developing a competitive offering and sales process. The growth of sales was supported by the following campaigns:

• “Overdraft for PLN 0” offering for new customers, allowing them to use the product during the first year without any additional costs – the commission for launching the limit is PLN 0. These terms are among the most attractive on the market.
• 7-day interest-free period, during which the overdraft may be used without any interest expenses in each settlement month.

According to the NBP data, as at the end of 2019 the Bank Millennium’s market share was 7.2%.

As a result of intensive marketing activities, in 2019, the Bank set another sales record for credit cards. Impresja and Alfa cards remain the flagship products, offering their holders a 5% refund of purchases made with the cards’ Partners. Organic growth supported by the merger with Euro Bank translated into growth of the credit card portfolio by 101 thousand (+28%) compared to the end of December 2018.

The number of debit cards also increased as the numbers of personal accounts rose and with a significant contribution of cards taken over from Euro Bank. At the end of 2019, the Bank’s debit card portfolio contained 2.86 million cards, increasing by 701 thousand (+32%) y/y.

In Q3 2019, Bank Millennium’s market share in terms of the volume of cards issued was 6.7% for credit cards and 7.2% for debit cards. In terms of the value of the transactions made with cards, the share was at 8.6% for debit cards and 6.9% for credit cards.

During the first 3 quarters of 2019, the growth rate of both the credit card and debit card portfolios at Bank Millennium was higher than the market average, while the operational merger with Euro Bank strengthened the Bank’s position even more.

In 2019, Bank Millennium maintained its high position on the mortgage loan sales market. Their sales reached the solid value of 4.2 billion PLN (+26% y/y) (Euro Bank data from 9th of November 2019). This growth was well above the 17% rate, at which the market grew over the same period. This resulted in the sixth place on the ranking of mortgage lending, with a market share of 7.3%.

The excellent relations with sales partners (financial intermediaries) contributed to the best sales result over this channel in the Bank’s entire history (PLN 3.1 billion). Total sales in 2019 reached the highest result in the Bank’s history for lending activity in PLN.

In the first quarter of 2019, the Bank modified its mortgage loan offer by lowering margin and in the second quarter of the year it additionally modified the rules for adopting a commission for increased risk until an entry is made in the land and mortgage register. Both changes were very well received by customers, which were confirmed by the results of the Bank’s lending activity.

In 2019, the Bank implemented a large-scale training program on product features and the lending process. It used this opportunity to reiterate how details of the offering should be provided to customers in a clear, accurate and transparent manner. The training exercise reached a group of more than 1000 individuals, both employees of the Bank’s own sales network, as well as external sales partners.

In 2019, the Bank continued to offer special terms to customers holding a CHF loan, such as currency conversion, partial and full repayment of the loan. It continued to negotiate the terms governing exchange rates and loan parameters after the currency conversion or partial repayment, taking a case-by-case approach to the customer’s situation and expectations.

In 2019, the Bank continued to offer life and property insurance in bank outlets and in remote channels. An important share in bancassurance revenues was contributed by the distribution of insurance linked to credit products, in particular cash loan insurance. In 2019, customers were able to take advantage of special offers, including the promotions entitled “Up to PLN 200 cash-back for TPL and MOD insurance” or “Cinema Tickets for Car Insurance”. As a result of the merger of Bank Millennium and Euro Bank, customers of the combined Bank were able to use a broad range of insurance products offered by Millennium in cooperation with several insurance companies.

Prestige is an offer for affluent customers with assets from PLN 100 thousand to PLN 1 million or customers making monthly payments of at least PLN 10,000 to their account. Private Banking is addressed to the most affluent individual customers with assets exceeding PLN 1 million, who expect high quality of service and financial product offering tailored to their individual needs. To those customers, the Bank offers a broad range of investment and unit-linked insurance products, domestic and foreign investment funds, investment programs, structured products and closed-end investment funds available through subscription. Private Banking customers can benefit from the Millennium MasterCard® World/Elite™ credit cards with access to the World MasterCard Reward program, World/Elite Privileges Programme partnership program, an insurance bundle and Assistance and Concierge packages.

As at 31 December 2019, Bank Millennium had about 38.2 thousand active Prestige customers and 4.3 thousand active Private Banking customers.

Biznes is an offer addressed to individuals running sole proprietorship businesses, partnerships and commercial law companies with annual revenues up to PLN 5 million.

In 2019, the Bank achieved the highest level of acquisition of accounts for Biznes clients, posting a 97% y/y increase in business account sales. The increase in the number of new clients by more than 22 thousand was possible as a result of:

• utilization of the capacity to open business accounts in the Millenet internet banking system for the Bank’s current retail clients running a business – 23% of the accounts were opened online.
• launch of a special offer entitled “Bonus for Your Business”
• increase in the level of cross-selling of business accounts in the Bank’s outlets.

The Bank offers a broad range of transaction banking and credit products to Biznes clients, in particular an attractive leasing offer as well as modern internet and mobile banking services.

As at 31 December 2019, Bank Millennium had above 89 thousand active Biznes segment customers.

2019 was a year of intensive development of electronic banking, providing modern, innovative solutions on the Polish market, such as:

Automatic payments for motorways – the Bank was the first bank in Poland to offer Autopay, automatic payment for motorways operated by Blue Media, in its mobile app. Our clients may travel a motorway without having to stop at toll gates. Toll payments are collected automatically from an account or a credit card specified by the customer, after exiting the motorway. Several vehicles may be registered in the service, including company cars, and an invoice can be downloaded directly in the Bank Millennium application, after each trip or once a month. The Autopay automatic payment system covers the A1 motorway from Nowa Wieś to Rusocin and the A4 motorway from Krakow to Katowice. The service continues to be developed and soon it will be available on other motorways as well.

Apple Pay – users with iOS operating system devices may now use the Apple Pay service to make quick and convenient payments anywhere contactless payments are accepted. The service is available for debit and credit Visa and Mastercard cards.

New generation banking – in March the Bank launched the new Millenet internet banking system and the new edition of its mobile app, which constitute the new generation of banking activity. The technologies and solutions used for its development are new on the Polish market and, together with the unique design, offer our customers a completely new digital experience. The new application and Millenet contain offers tailored to individual needs of customers and their unique ways of managing their finances. New sections offer easier access to the functions that are used most frequently, which the customer may manage, based on preferences. For example, the “Collection” add-on makes it easier to monitor payments from many sources to a specific goal, for example when collecting money for a gift or a class trip from several persons.

Access to e-administration – in 2019 important changes were also made aimed at supporting e-administration and government programs in the Millenet system. Among other things, the Bank provided:

• the possibility to apply for family benefits in the Family 500+ and Good Start 300+ programs based on the new assumptions. Starting on 1 July 2019, the 500+ benefit is also given to the first and each successive child, without the income criterion. On this occasion, the Bank prepared a special promotion: clients applying for the 500+ benefit may be eligible for a bonus up to PLN 300 and additional rewards. Applying for the benefits is simple and intuitive. After logging in, an appropriate document must be filled out in the MilleUrząd tab and confirmed with an SMS code/ approved in the mobile application.
• possibility of paying taxes via Millenet directly on the Twój e-PIT website. Customers with a tax underpayment can now pay the due amount to the tax office without having to leave the tax website. All the transfer data (details of the appropriate tax office, payment amount, type of return) are filled out automatically. Millenet users can additionally log into the Twój e-PIT website without stating their tax ID details.

POS payment terminals for Biznes clients – the Bank in collaboration with a card acquirer PayTel S.A. extended its offering for Biznes segment customers to include a comprehensive POS terminal rental service, including acceptance of payments and maintenance of the terminals. Within the service, the Bank offers a broad choice of stationary and mobile terminals capable of being integrated with fiscal cash registers. The terminals offer support for BLIK and contactless payments, acceptance of VISA and Mastercard cards, also with the DCC option (Dynamic Currency Conversion, or payment in the card currency) and additional services such as CashBack or sale of mobile prepaid credits.

Temporary blockade of cards in the mobile app and unblocking of passwords in Millenet – among new solutions, customers may use convenient, temporary blocking of payment cards in the application (the blockade may be turned on and off any number of times) and quick fully-online unblocking of passwords to the Millenet system without a need to contact the hotline.

In 2019, Bank Millennium adapted its services to the requirements of the EU PSD2 directive. It introduced a new method of activating electronic channels (including the mobile application) and additional safety measures for logging in and authentication of operations. The account opening and activation process conducted in a branch has also been adapted to the requirements of the directive. In order to prepare clients for the change, the Bank conducted numerous profiled communication and education campaigns in the banking system, on its website and by text messages. Information was also provided through the hotline and in branches. As a result, the changes were very well received by customers and the implementation process was exceptionally smooth.

In March, the Bank as one of the first market players published the documentation and testing environment and then a production interface for open banking using the PolishAPI standard. Then, as the first payment institution on the Polish market it received a release from the obligation to maintain an emergency interface. That confirmed the highest quality of the production API and satisfaction all the requirements regarding account access and initiation of payments under PSD2 and regulatory technical standards RTS for individual and corporate customers.

Additionally, in order to develop open banking-based services, the Bank launched a pilot for the account aggregation and account information function for accounts held in other banks in its mobile application and internet system. The name of the new service is Finanse 360º.