Subsidiaries’ activity

In 2021, the goodie app, downloaded already by more than 2.7 million people, saw further records in users’ interest in online shopping and goodie cashback programme. During the past 12 months, more than 4.4 million online transactions were made in goodie with cashback (+66% y/y) amounting to over PLN 593m (+90% y/y). More than PLN12m was accrued to the goodie cashback user accounts (+42% y/y).

4Q 2021 was an exceptional period for goodie cashback. The cashback service recorded huge increases in the value of transactions and reached almost PLN208 million (+70% y/y). The number of transactions made was also growing steadily, reaching nearly 1.3 million in this period. This resulted in accrual of more than PLN3.8 million cashback on Users’ accounts.

It should be noted that the above results were achieved despite the entry into force as of 1 July 2021 of the new rules for VAT taxation of e-commerce as regards import of the so-called small consignments from outside Europe. This change had a significant impact on the transaction rate on the e-commerce platforms offering sale of goods from China and available in goodie cashback.

The popularity of the goodie cashback service was also growing among Bank Millennium’s customers – initially available only in the Bank Millennium mobile application, in 4Q 2021 it was also launched in Millenet internet system.   The goodie cashback service was featured several times in the Bank Millennium TV commercials.

Significant results in 2021 were also driven by the sale of gift e-Cards, the number of which increased 90% y/y.

In June 2021, the goodie application was integrated with Huawei Mobile Services. This means that the app is now available at AppGallery, both for the latest Huawei smartphones with HMS and older GMS models.

A part of www.goodie.pl website was significantly changed with regard to cashback – thus, goodie cashback online users enjoy a more friendly and clearer interface.

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

The value of leasing agreements launched by the company in 2021 totalled PLN3.88 billion, i.e. 56.6% more than in 2020. As at 31 December 2021, the value of capital involved in active leasing agreements amounted to PLN6.74 billion, i.e. 6.4% above the level at the end of 2020.

In 2021, the company achieved a significant increase in leasing market share, reaching 5.1% share compared to 4.1% in 2020.

Millennium Leasing experienced the largest increase in sales in 2021 in the group of means of transport, and so — heavy transport increased by 84% and light transport — by 63.2%.

As a socially responsible organisation, Millennium Leasing promotes activities to help run an energy-efficient business. Therefore, the company encouraged customers to use ecological solutions within the MilleSun photovoltaic equipment financing programme. The product is implemented under a simplified procedure, and an additional facilitation in obtaining financing is the possibility for the customers to choose an authorised Millennium Leasing supplier.

In 2021, the company began offering customers the possibility of concluding a leasing agreement with a BGK guarantee, thanks to which entrepreneurs from the SME sector may use financing on more attractive terms, including: with regard to margins, financing amount, agreement term and required collateral. BGK guarantee may cover up to 80% of the financing of the leasing transaction, with the maximum agreement period of 10 years. Funds covered by the guarantee constitute state aid from the Pan-European Guarantee Fund — an instrument implemented by the European Investment Fund to protect the European Union economy from the effects of the COVID-19 pandemic.

In 2021, Millennium Leasing continued the possibility of signing documents with electronic signatures, which was introduced in 2020. In addition, the company actively promoted the electronic agreement service (eBOK) among its customers. At the end of 2021, as many as 75% of customers were already using electronic invoicing.

The company actively promoted the MilleFlota service among its customers, which allows for convenient, fast and cost-effective servicing of vehicles up to 3.5 t. Under the programme, customers can purchase parts and services at attractive (and fixed throughout Poland) prices, also at Authorised Service Stations, and furthermore receive a special fleet discount.

Millennium Leasing services are sold by leasing advisors in 78 branches throughout Poland. Moreover, the company actively cooperates with banking advisors in retail branches and in the corporate banking service network of Bank Millennium. This allows the company to offer entrepreneurs a full range of financial services, including both leasing and banking products.

Millennium TFI S.A is a licensed financial institution operating since 2001 as an entity creating and managing investment funds. At the end of the year 2021, the company managed customer assets worth PLN5.2 billion and Millennium TFI funds had around 150 thousand participants.

The main goal of Millennium TFI’s activity is delivering to Clients an attractive and effective investment solutions and  providing  professional  investment customer  service. The fund  managers  and whole investment team are professionals with long years of experience and excellent insight into financial markets.

During the year 2021, Millennium TFI has achieved significant growth of assets under management of 14.7%, much stronger than the market average (+7.5%).

Simultaneously Millennium  TFI has managed to face up the threats related to COVID-19 pandemic. Millennium funds carried out all transactions of the participants without  any  problems,  while maintaining  the  full liquidity of portfolios throughout the period. The  operational continuity of the company was also maintained. The transition to the remote work of the employees took place without disturbances for the operational processes.

In the first half of 2021, Millennium funds recorded significant increase in assets of a total value of PLN664 million, as a consequence of a conducive macro-economic environment and high risk appetite. In the second half of the year, the value of AUM increased till September and since then has systematically decreased due to capital market turbulences. At the end of the year, the assets under management reached the level of PLN5.2 billion – representing the growth of PLN671 million.

In 2021 most of Millennium investment sub-funds with equity component (equity and balanced sub-funds) has brought participants positive and competitive rates of return, even above +20% for selected equity strategies. On the other hand, the bond sub-funds have realized negative or close to zero rates of return, which were significantly impacted by rising interest rates and elevated inflation.

Millennium TFI S.A. currently manages three umbrella funds: the Open-End Investment Fund with 6 separate sub-funds investing on the Polish market (Millennium FIO), Specialist Open-End Investment Fund with 6 separate sub-funds investing on the global markets (Millennium SFIO) and Millennium PPK Specialist Investment Fund with 8 target date sub-funds. In 2021 Millennium TFI offered participation  units  in  20  investment  sub-funds  with different investment strategies and different risk levels.

The company’s broad offering includes also various savings products based on the investment funds it  manages. Its  most  popular  products  include  the  Millennium  Investment  Plan  and  Individual Retirement  Accounts (IKE).  Millennium  TFI currently  manages  IKE programs for 34 thousand customers, with the total asset value of  PLN400 million.  At  the  end  of  2021,  the  total  value  of  assets  invested  in  various  savings  products  was approximately PLN1 billion.

The brokerage activity in the Bank Millennium Group is run by Millennium Dom Maklerski S.A.. It renders a broad range of brokerage services, especially the execution of buy or sell orders for financial instruments for the principal’s account, buying and selling financial instruments for its own account, running securities accounts and cash accounts to serve them, investment advisory services, advisory services concerning capital structure and strategy as well as combining, splitting and acquiring businesses, offering financial instruments, rendering services to perform firm and standby underwriting agreements, preparing investment and financial analyses and other recommendations related to financial instruments.

In 2021, Millennium DM’s turnover on the equity market was PLN3.5 billion, giving the company 0.6% market share according to the Warsaw Stock Exchange’s data. As at 31 December 2021 Millennium DM had provided services to 24.7 thousand investment accounts and acted as a market maker and as an issuer’s market maker for 8 companies listed on the Warsaw Stock Exchange.

In 2021, Millennium DM also acted as an intermediary, carried out a buyback of public company and new issue of shares for a company listed on the Warsaw Stock Exchange. Moreover, as a member of a distribution consortium, Millennium DM also participated in several new issues of shares.

In 2021, Millennium DM also provided analysis and consulting services to external clients as well as group companies. The most relevant of these included: investment advisory service related to unit-linked insurance funds for one of the leading domestic insurers, due diligence of investment funds and insurance companies cooperating with the capital group, as well as research related to specific sectors, public and private companies.

The Management Boards of Bank Millennium and Millennium DM decided to integrate the brokerage business and transfer it to the Bank. Therefore, on May 10, 2021, the Division Plan of Millennium Dom Maklerski was published. The division plan was examined by an expert appointed by the court, who issued an unqualified opinion on August 9, 2021. In connection with the decision to integrate brokerage services, Bank Millennium S.A. submitted an application to the Polish Financial Supervision Authority for an extension of the license to conduct brokerage activities. The end of the procedure is expected in 2022.

Millennium Bank Hipoteczny Spółka Akcyjna (“MBH”) was established through an act of incorporation by Bank Millennium S.A. on 9 July 2020, after the decision of the Polish Financial Supervision Authority of 16 June 2020 allowing to set up the Bank. The purpose of establishing the Bank and its mission is to ensure to the Group a stable and long-term financing of mortgage loans in the form of covered bonds secured by mortgage receivables (business reserved in Poland exclusively for mortgage banks).

On 20 May 2021 the Polish Financial Supervision Authority licensed MBH to start its activities, which in fact took place on 14 June 2021. Since the beginning of its operations MBH has focused on conducting the first and more transfers of mortgage loans granted by Bank Millennium, which will become the basis for the issuance of covered bonds secured on such loans. The first transfer of mortgage loans from Bank Millennium was conducted on 15 October 2021. The transfer of the first pool of mortgage loans to MBH’s balance sheet means the start of obtaining interest revenues from the clients. Preparations also started for the second transfer planned to be finalised in the 2nd quarter 2022. At the same time MBH started work on the preparation of the first covered bond issue. As part of this process the first prospectus is being prepared, as is the rating of the first issue. After the prospectus has been approved by the PFSA and the rating has been assigned, MBH will implement the first covered bond issue.

These activities will be conducted by MBH on a cyclical basis. The next pools of mortgage loans originated by Bank Millennium under the rules for mortgage banks will be covered by the process of determining the mortgage lending value (MLV) of the properties and then will be transferred to MBH and (after performing a change in the mortgages) the amount of receivables will be increased in the collateral register for covered bonds thus enabling subsequent issues of covered bonds.  Only mortgage loans to individuals for housing purposes will be transferred to MBH. MBH will not originate mortgage loans on its own.