Financial and
ESG report 2020

Summary of consolidated Group results in 2020

Bank Millennium S.A. Capital Group’s (the ‘Bank’, the ‘BM Group’) consolidated 2020 net profit amounted to PLN23 million and was substantially below this in the previous year. Direct and indirect impact of COVID-19 pandemic (i.a. lower economic activity in parts of the year, an impact of the unprecedented 140bp base interest rate cut in 1Q20-2Q20) and substantial extraordinary negative P&L items were the main burdens on our results. In particular, PLN677 million provisions against legal risk related to FX-mortgage portfolio originated by Bank Millennium, were the main burden on our results this year.

The provision balance stood at PLN924 million at YE20. Adjusted for the provision cost, BM Group would report net profit of PLN637 million in 2020 overall. Full year net profit adjusted for all extraordinary items stood at PLN709 million, down 23% y/y. Adjusted ROE of 7.8% compared against 10.6% in 2019. It is worth to remind however that the y/y comparability of 2020 P&L was distorted due to the merger of Euro Bank (acquired on the 31st of May, 2019). 

While the 2020 net profit was admittedly well below our aspirations, we are convinced that the initiatives started and related costs endured will pay-off going forward. We swiftly responded to revenue headwinds and as a result our cost growth in 2020 overall (+2% y/y including D&A) was slower than this of revenues (+3%). In 4Q20, HR costs were down 17% y/y and down 10% q/q and we expect the positive momentum to continue in 2021.  

Additionally, we increased risk buffers (NPL/DPD90+ coverage ratios at 66%/119% vs. 62%/106% at YE19 respectively; abovementioned provisions against legal FX-mortgage related risks at 6.7% of YE20 portfolio ex-Euro Bank) while our capital ratios remained strong (consolidated TCR/T1 of 19.5%/16.5% respectively against regulatory requirements of 14.1%/11.3%).  

Moreover, we shortened the timeline of implementation of merger synergies with Euro Bank. Combined with new efficiency improvement initiatives, this resulted in a 15% reduction of our distribution network (702 outlets vs. 830 at YE19 with 124 or 21% of own branches closed in the period) and 14% reduction of active FTEs to 6.6k. As a result, net synergies became tangible (PLN100 million pre-tax in 2020), recurrent and should double in 2021. 

Bar all the negative impacts of the COVID-19 pandemic, we see 2020 as a year accelerating our transformation for a new era in banking. We firmly stood by our customers during the pandemic, as a result strengthening further our relations with them. As a result, cross-sell ratios increased in many categories. We also won new customers despite the challenges brought by the pandemic. The number of active customers increased by 61 thousand to 2.63 million at the end of the year. Origination of mortgage loans reached a new record level of PLN7.2 billion (disbursements PLN6.7 billion, +57% y/y) and a new record high market share (12.2%). Origination of cash loans dropped y/y to PLN4.6 billion but the Bank maintained its market share at the high level of 10.7%. Digitalisation process accelerated significantly, both at the front- and back-end. 


active customers

PLN7.2 billion

mortgage loans reached 


record high market share

Key points of Group BM results in 2020:

Reported results under the impact of COVID-19 pandemic and significant one-off/extraordinary items 

  • Reported net profit of BM Group in 2020 amounted to PLN23mndown 96% y/yfull year net profit adjusted for extraordinary items stood at PLN709mn, down 23% y/y 
  • Reported ROE at 0.2% while C/I ratio at 49.0% 
  • Adjusted ROE at 6.4% while adjusted C/I ratio at 46.7% 
  • Additional PLN677mn (pre-tax) provisions against legal risk related to FX-mortgage portfolio originated by Bank Millenniumthe provision balance stood at PLN924mn at YE20, an equivalent of 6.7% of the portfolio  
  • Additional provisions against refund of fees on earlier repaid consumer loans (‘small TSUE’) of PLN107mn (pre-tax) 
  • Significant loss of interest income as a result of interest rate cuts (PLN223mn or 8% compared to annualised 4Q19 level) 
  • Provisions against expected impact of COVID-19 pandemic totalling PLN133mn (pre-tax) 

Solid operating results despite the pandemic:

3.3% y/y
NII (pro-forma)
6.7% y/y
Net fee income
3.1% y/y
Operating income
4.6% y/y
Operating profit pre-provision

Euro Bank integration – acceleration and combined with other efficiency initiatives yielding tangible and recurrent net synergies

  • Shortened timeline of implementation of merger synergies with Euro Bank  
  • Integration costs in 2020 totalled PLN67mn pre-tax compared with PLN116mn in 2019  
  • 15% reduction of our distribution network (702 outlets vs. 830 at YE19 with 124 or 21% of own branches consolidated in the period) 
  • 14% reduction of active FTEs to 6.6k  

High quality of assets and high liquidity maintained

NPL ratio
83 bp
Cost of risk
Low loan/deposit ratio

Solid capital position and lower regulatory buffers

  • TCR (Group) at 19.5%, CET1 at 16.5% over 5pp above regulatory minimum levels  
  • PFSA lowered FX-buffer to 3.35% (Group) 

Retail banking


active customers (+61k y/y)


digital customers (+12% y/y)


active mobile customers (+18% y/y)


issued debit cards (+145k y/y)

PLN mortgage loans up 22.4% y/y; record disbursements (PLN6.7bn, up 57% y/y) and market share in originations at 12.2% from 7.3% in 2019

Cash loans up 1.5% y/y despite lower disbursements (down 7% y/y); maintained market share in originations (10.7%)

Corporate banking

up 37% y/y

Deposits at current accounts

+1.1% y/y

Loan book (ex-leasing)

+10% y/y

Origination of factoring

Growing number and volume of transactions

Quality and innovations

  • One of the best NPS ratios * (53among banks in Poland  
  • Best bank in Customer Experience category in KPMG’s survey  
  • The Best Consumer Digital Bank in Poland for 2020’ in World’s Best Digital Banks ranking by Global Finance magazine  
  • 2.2mn downloads of goodie app, the Bank’s smartshopping platform 

*Internal customer satisfaction and loyalty surveys 3/04-29/05, 25/08-30/09, 27/11-18/12; 

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