Corporate banking

Due to the sustained pandemic situation, in 2021 the Bank continued to focus on reacting to new needs of businesses, connected with the changed situation relating to their operation.

In 2021 Bank Millennium together with Bank Gospodarstwa Krajowego was implementing 3 guarantee programmes to secure loans to businesses: De minimis guarantee programme, programme of guarantees from the Liquidity Guarantee Fund and Biznesmax guarantee programme. SMEs and larger companies could get them under special terms and the application process uses digital channels and qualified signature.

Loans with de minimis guarantee are dedicated to entrepreneurs from the SME segment. Throughout 2021, the programme operated on changed rules facilitating companies’ access to the loan and its repayment – the guarantee period was extended, the amount limit was increased, the commission to BGK for granting the guarantee for first valid year was abandoned. Moreover, it became possible to secure with a de minimis guarantee also the repayment of a foreign currency loan, which had been unavailable before. This condition will apply until the end of the BGK program.

We are also continuing the implementation of the guarantee programme introduced in 2020 from the Liquidity Guarantee Fund, the so-called liquidity guarantees. It is part of the government’s anti-crisis shield and its aim is to support financial liquidity for medium and large business entities. Liquidity guarantees for loans sustained high coverage of up to 80%, a higher amount of the loan covered by the guarantee – up to 200 million PLN as well as increased total amount of the guarantee – up to PLN250 million. Moreover, a guarantee may also be used for foreign currency loans.

Businesses could also use reverse factoring secured with a guarantee of repayment of the granted limit within the liquidity guarantees programme of Bank Gospodarstwa Krajowego – up to PLN250 million, with maturity up to 24 months as well as guarantees up to 27 months, covering up to 80% of the limit amount.

Biznesmax guarantees in the formula valid at the Bank pertain first of all to financing companies focused on environmentally friendly projects. The programme was changed at the beginning of 2021 to better meet the new needs of companies. In addition to the available investment loans in PLN, it also became possible to finance the company’s current operations, also as part of an overdraft facility granted for a period of 36 months. The most important element of the program is, apart from the lack of commission for BGK during the entire duration of the guarantee – regardless of the period of validity of the guarantee – also the possibility of applying for a partial refund of interest paid on the loan granted.

From January Bank Millennium enabled submitting applications for support as part of Financial Shield 2.0 through its internet banking service. Application submission was simple and intuitive. In order for every eligible entrepreneur to be able to conveniently apply for subsidy, the Bank made the application available both in Millenet for Companies as well as in internet banking for individuals, the latter being used also by sole traders. The entire process was fully online. Checking the application status and confirmation of granting or refusing a subsidy, prepared on the basis of a decision received by the Bank from the Polish Development Fund, are also enabled online.

In the second quarter of 2021, the bank introduced a process in electronic banking enabling entrepreneurs to settle subsidies received under the PFR 1.0 Shield. Customers who benefited from the subsidy received in electronic banking preliminary calculations prepared by PFR of the amount that is subject to redemption and the amount required for repayment. Also using electronic banking, customers had the opportunity to confirm the settlement calculated by PFR or apply for a different amount. The final decisions of PFR are presented in electronic banking along with the repayment schedule. The bank has implemented a process, convenient for customers, of automatic repayment according to the schedule. The Millenet electronic banking system also allows early repayment of all or part of the subsidy that has not been written off.

Because it was necessary for entrepreneurs to submit an application for remission as part of Shield 2.0, we enabled in Millenet a functionality for Businesses to submit a statement on the settlement of a subvention.

Bank Millennium support clients through educational initiatives and distributing information.
about important changes affecting the conduct of business activity. We publish a monthly newsletter presenting macroeconomic information, discussing tax changes and describing new product and system solutions. We also organize educational webinars, an example of which can be a training webinar carried out in December, dedicated to employees of financial departments of local government units. It was devoted to good practices improving the security of digital processes as well as methods of counteracting fraud attempts. The Bank’s experts in the field of transactional banking and fraud risk, based on examples of methods used by criminals, showed how to identify fraud attempts to avoid financial losses.

Other educational activities focused on two communities supported by the Bank – financial directors and family businesses. As part of the CFO Club, the bank’s experts appeared at face-to-face and online meetings, sharing knowledge in the field of tax changes, legal regulations in the field of sustainable development, the impact of macroeconomic changes on business development, as well as soft skills necessary in the position of financial director. On the other hand, the meetings as part of the Family Business Forum were an opportunity for the Bank’s experts to present our experience in the field of customer analytics and building customer experience in digital channels.

Bank Millennium provides trainings for employees of the corporate banking sales network presenting the possibilities of obtaining financing  for enterprises from public programmes, including the National Recovery Plan, and the Multiannual Financial Framework or the so-called EU funds. The training concerned both the general program assumptions, the latest financial perspective for 2021-2027, as well as specific competitions announced in 2021, enabling obtaining subsidies for investments planned among the Bank’s Clients. The training discussed the issues of innovation, financing the implementation of new products and services, support for conducting research and development works in enterprises. These trainings are both information for relationship managers about the programmes, along with the criteria and parameters for financing new investments, as well as support for them in interviews with clients about investments, in particular in the field of financing innovations, green investments, digitalisation.

Corporate banking employees also took part in the „Financing of investment projects” training series, improving their competences in the analysis of their clients’ investment projects.

We also regularly provide sales employees with knowledge about the current macroeconomic situation and its impact on the markets and activities of companies. We do this in the form of monthly webinars conducted by experts from the Bank’s Macroeconomic Analysis Office. This information is supplemented by industry analyses made available on the intranet.

Employees also take part in trainings on new solutions for corporate banking clients, as exemplified by webinars devoted to the Financial Shield 2.0 on applying for and redeeming subsidies in Millenet for Companies, a webinar on the document exchange module in Millenet, solutions in the field of payment terminals or a series of trainings devoted to solutions that customers can use as part of Millennium Leasing customer e-service.

Relationship Managers and credit analysts in the area of corporate banking took part in a webinar conducted by a law firm specialising in the renewable energy sector. The meeting was devoted to discussing the specifics of financing transactions in the PV sector, taking into account the legal and regulatory environment of the industry.

Despite limited market demand for financing, the volume of all credit products – loans to finance current needs, investment loans, leasing, trade finance products and products with participation of EU funding increased in 2021 by 3% vs. the previous year to reach the level of PLN19.5bn net.

After a record year in 2020, also in 2021 the Bank posted record-high growth rates in the factoring area. Realised factoring turnover stood in that period at PLN27.2bn, i.e. +17.1%. In terms of realised turnover value, the Bank was ranked 6th among the factoring institutions associated in the Polish Factors Association, with a 7.5% market share. Factoring assets as of the end of 2021 reached the highest level in history and were PLN3.14bn.

For another year businesses could also enjoy reverse factoring secured with a guarantee of repayment of the granted limit within the programme of liquidity guarantees from Bank Gospodarstwa Krajowego. The great interest in the programme among Bank Millennium’s clients is confirmed by the very high, 16% share of the Bank in factoring financing offered to businesses under this programme in Poland.

In trade finance 6.3% growth was posted in commission income on guarantees and LCs, with a stable value of the portfolio of active guarantees and letters of credit, which reached the level of PLN937 million at the end of the year. There was an 83% increase in the value of new/increased limits and new one-off guarantees and letters of credit granted outside the limits.

In the 4th quarter of 2021, systems for handling guarantees and letters of credit were adapted to the new SWIFT standards in terms of changes in messages regarding guarantees and stand-by letters of credit, which increases the automation of the processes of handling these products.

On our trade finance platform, customers’ interest in electronic orders to provide guarantees and open a letters of credit is growing. At the end of the year, 91% of orders to grant a bank guarantee and open a documentary letter of credit within the line were submitted by customers electronically. Almost every third guarantee had the form of an e-guarantee, i.e. electronic form of guarantee with the guarantor’s qualified electronic signature.

Corporate banking clients have access to a comprehensive offer of transactional banking products for companies, supported by an efficient and ergonomic internet banking system, mobile app and solutions based upon web service technology and SWIFT network. With respect to transactional products and services the Bank offers solutions in support of the management of receivables collection, payment settlements, liquidity management. The high quality of offered remote services led to a consistent growth of the transactional activity of Clients.

2021 was characterized by a further solid increase of 18% in the balance of funds accumulated on current accounts; at the same time, the balance of deposits increased by 38%, which in total gave an increase of 24%. Transaction activity in the field of domestic transfers was higher by 6%, and in the field of FX transfers it remained at a similar level as in 2020. We observed a recovery in the volumes of closed cash deposits in 4Q, they were 14% higher than in the same period of the previous year. At the same time, interest in payment cards increased significantly – the number of cards in 2021 increased by 27%.

The high balance on current accounts and the threefold increase, by a total of 1.65%, of the NBP’s key interest rates significantly improved the interest result by 46% (including deposits by 42%), at the same time net commission income significantly improved by 32%.

In early 2021 a new type of business account (settlement account) – the so-called FNDR account, was introduced. From 1 January 2021 CIT taxpayers (joints stock companies, limited liability companies, limited joint-stock partnerships, limited partnerships) may benefit from a tax preference consisting among others in write-offs to a “fund established for investment purposes”. Thanks to the FNDR account clients had the opportunity to benefit from tax relief and claim the amount of write-offs up front as tax deductible expenses.

Bank Millennium’s POS payment terminal offer was also made available on special price terms in cooperation with PayTel.

In the second quarter, using the synergy with Millennium Goodie Sp. z o.o., the payment cards offer was expanded with a modern and innovative solution – goodie gift eCards. A gift eCard is a type of financial bonus in the form of a secure virtual payment card available in the goodie application, which can be used for paying in traditional and online stores. The recipient during the activation of the eCard on his phone will see an animation with dedicated wishes, logo or other message and graphics tailored to the occasion.

For all payment cards issued to corporate banking customers, we have launched the possibility of adding them to the following external wallets: Google Pay, Apple Pay, Garmin Pay, Fitbit Pay. Adding a card to your favourite wallet ensures that payments are made without having to remember about the card in plastic form.

In line with the trend of increasing the use of electronic banking channels, another year was recorded in which the use of electronic banking channels increased.

In 2021, the functions of electronic banking enabling the secure exchange of electronic documents were significantly expanded, which further increased the Bank’s ability to support businesses in a remote way.

Customers can use a dedicated module designed to exchange contracts concluded in electronic form. It enables two-way sending of documents by the bank as well as by the customer, with the possibility for each party to add their comments. The customer as well as the bank may endorse or reject the documents sent, until both parties have negotiated wording to the satisfaction of each of them. The module enables attaching documents containing a qualified signature and each document version sent to the customer bears the bank’s electronic seal.

At the end of the year, the function was enriched with a qualified validation and maintenance service of electronic signatures carried out in cooperation with Asseco Data Systems. The qualified maintenance service provides in the long term the legal and technical protection of the evidential value of a qualified e-signature or seal linked to a specific electronic document. The integration of services with the circulation of documents in electronic banking significantly increases the comfort of concluding contracts in an electronic version, because it eliminates the need to use additional software to verify signatures.

In Q4 2021 57% of agreements were signed with the use of an electronic signature.

The Bank was also working on the development of support tools for electronic banking users. Corporate banking customers have been given the opportunity to contact
technical and substantive support consultants for electronic banking via chat.  Businesses can get online support this way when using the system and navigating it, selecting the best solution and service. During the chat the customers can additionally activate the service of co-browsing with the consultant, which improves customer support greatly.

The functionality of the MillenetLink service has also been expanded, which is a channel for direct data exchange between customers’ ERP systems and electronic banking. In addition to the most commonly used SEPA transfers in EUR, the service now supports other types of cross-border transfers available at the Bank. New services have also been added to enable customers to manage prepaid cards in an automated manner (e.g. card funding, balance verification).

Together with Millennium Leasing, the function of electronic service of leasing products was also developed; it is already used by almost 90% of joint customers (Bank and Millennium Leasing). The module of electronic leasing service, which contains a wide range of functions, has been additionally enriched with a set of reports containing complete data on leasing contracts, instalments, invoices and insurance of the customer’s products concluded with Millennium Leasing.

Wspólnie z Millennium Leasing rozwijano również funkcję elektronicznej obsługi produktów leasingowych, z której korzysta już niemal 90% klientów wspólnych (Banku i Millennium Leasing). Moduł elektronicznej obsług leasingu, który zawiera szeroki wachlarz funkcji dodatkowo wzbogacono o zestaw raportów zawierających kompletne dane dotyczące umów leasingowych, rat, faktur i ubezpieczeń produktów klienta zawartych z Millennium Leasing.

The Treasury Department offer includes a broad range of products: spot FX transactions, deposit products, FX risk management instruments (fx forward, fx swap, options) and interest rate risk management instruments (FRA, IRS, CIRS). Solutions offered by the Bank enable exporters and importers to hedge against FX risk and, thereby, properly calculate costs and prices. Customers also can hedge against the risk of deterioration of financial results due to adverse future changes of market interest rates. The proposed solutions facilitate the determination of the fixed cost of financing and inflow of interest without requiring any changes to be introduced to already existing loan or leasing agreements.

The bank enabled customers to conclude currency exchange transactions in electronic banking (in the desktop version and in the mobile application) 24 hours a day, 5 days a week. The services are available from Monday 0:00 till Friday 23:00 hrs in the electronic millennium Forex Trader FX platform, which is embedded in the Millenet for Companies online system.

The app allows monitoring current levels of FX rates for 16 currency pairs simultaneously and enables concluding FX transactions on all currency pairs available in Bank Millennium’s FX rates table, including the Chinese yuan. It provides easy and quick access to history of transactions with the possibility of exporting data to a spreadsheet. The platform has a clear and intuitive interface based on HTML5 technology. In December 2021, we expanded the functionality of the Millennium Forex Trader FX platform with conditional orders, which were made available to clients at the beginning of January 2022.

In 2021, a significant increase of 26% in the foreign exchange turnover of corporate banking clients was also recorded on the FX platform.

Bank Millennium provides custodial services on the basis of an individual permit issued by the Securities and Exchange Commission (now the Polish Financial Supervision Authority). The Bank is a direct participant of the deposit and settlement systems such as the National Depository of Securities (kdpw_stream), NBP Register of Securities (RPW), Euroclear Bank SA/NV (Brussels) and Clearstream Banking Luxembourg.

Custody Department customers include domestic and foreign financial institutions (global custodial banks, banks – depositaries of global depositary receipts, investment banks, asset management institutions, insurance companies, collective investment institutions, investment funds) and other legal persons actively participating in capital and money market transactions, requiring comprehensive and customised service and advanced ICT and infrastructural solutions.

In terms of the number of domestic and foreign clients entrusting us with their assets, the Bank holds one of the top spots in Poland. The total value of assets on securities accounts of customers as of 31 December 2021 reached PLN32.7bn. As of the end of 2021 the Bank maintained 13148 securities accounts and deposit accounts and performed depositary function for 22 Investment Funds.

With respect to financing obtained on the international market, last year the Bank continued its collaboration and management of agreements concluded with International Financial Institutions including, primarily, the European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB), which, as of 31 December 2021, covered as follows:

• agreement concluded with the EBRD in August 2018 on a medium term loan in the amount of PLN300 million, granted by the EBRD under the PolGEFF (Polish Green Energy Financing for Leasing) project. Millennium Leasing is the borrower under this agreement, on the basis of a guarantee issued by Bank Millennium. Loan proceeds will be used by ML to finance leasing agreements connected with the purchase of machines and equipment contributing to the transformation of the Polish economy in the direction of the so-called ‘green economy’ including, in particular, in the area of energy and resource efficiency, renewable energy, water management and waste management. The loan will be paid back in full in August 2023, while its active balance at end of 2021 was PLN200 million.
• agreement concluded with the EBRD in November 2017 (by the former Euro Bank) on a medium term loan in the amount of PLN40 million (with the option of expansion to 100 million PLN), granted by the EBRD under the PolGEFF (Polish Green Energy Financing for Leasing) project. Funds from the loan have been made available to the Bank’s retail clients with the allocation for the implementation of purchases connected with the replacement or upgrading of the standard of selected equipment or installation, whose purpose is to reduce the consumption of energy (electric power or heat energy) and/or water in the housing real estate owned by them. The last loan instalment will be paid in November 2022.
• loan agreement concluded in December 2016 with EIB, in the amount of EUR100 million with Millennium Leasing being the borrower and allocated for supporting activities in the area of financing leasing agreements concluded with companies from the SME sector. The loan was disbursed in four tranches in the period between June and December 2018. The loan balance at year-end 2021 was EUR33.3 million.

The Bank also continued projects connected with the multiyear process of strengthening the base of credible counterparties and partners on the interbank market, including, in particular, in the segment of instruments involving medium and long-term liquidity management in FX. One of the important aspects of the activities in the area was managing the portfolio of agreements with domestic and foreign banks (including agreements of ISDA and GMRA types) whose form requires regular adjustment to a changing regulatory environment and market standards. A considerable part of the activity was also connected with the finalisation of Brexit, broadly understood compliance issues (including growing demands in the KYC/AML area and sanctions), as well as with continuation of work involved with the planned issue of debt instruments meeting the MREL criteria.

Irrespective of the above activities, in the past period the Bank performed, on an on-going basis, all other tasks connected with the overall carrying out of international operations, in areas of implementing various objectives including, inter alia, processing payments and settlements, current financing of own needs and those of Bank clients, processing foreign trade transactions, participating in international money and FX market transactions, operating on the capital market. The achievement of these objectives was supported, to a large extent, by an almost thirty-year long process of developing the Bank’s cooperation with its foreign partners and counterparties. The Bank maintains ongoing contacts and relations with selected reputable correspondent banks and their units located in all important countries in terms of the structure of turnover of Polish foreign trade and non-trade transactions.

In parallel to medium-term financing obtained on the international market, in several recent years the bank has successfully carried out senior debt issues denominated in PLN in the form of bonds placed among institutional investors on the domestic market (in 2014 at the nominal value of PLN500 million, in 2015 PLN300 million and in 2017 PLN300 million), and subordinated debt (PLN700 million in December 2017 and 830 million in January 2019).