ING Bank Śląski S.A.

ING Bank Śląski S.A.
Financial Results for 2Q 2008
Warsaw – 13 August 2008
www.ingbank.pl
Information for investors
Some statements contained in this presentation represent future predictions and forecasts. Such
statements are based on the current views and assumptions of the Bank Management Board and they
incorporate known and unknown types of risk and some degree of uncertainty. The actual results,
achievements and occurrences may considerably vary from the data presented in these statements
due to such elements as: (I) the general economic conditions, (II) the FM results (III), the frequency and
severity of insured loss cases, (IV) the level and trends of the mortality and incidence rate, (V) the
duration of specific conditions, (VI) the interest rates, (VII) the FX rates, (VIII) general competitive
factors, (IX) amendments to laws and regulations, and (X) changes in the policy of the government
and/or statutory authorities. ING Bank Śląski shall not assume the obligation of updating any items of
information being speculations as to the future, presented herein.
2
Table of contents
1.
Introduction to financial results and market position of the Bank
2.
Business development
3.
Financial results for 2Q 2008
3
Strategic targets of ING Bank Śląski
- consistent execution of strategic targets in 2008
Acquisition of new clients
and increase of volumes:
Increase of number of both retail clients (+277,000) and wholesale clients (+756)* during the year
Increase of Bank total deposits volume by PLN 9 bn (+23%) to the level of PLN 47.5 bn during the year
86,000 new Direct Current Accounts’ owners in the first half of 2008
Lending products sales
intensification:
Increase of total lending exposure to the level of PLN 20.5 bn, i.e. by PLN 4.9 bn (+32%) annually
Increase of PLN denominated mortgage loans volume up to the level of PLN 3.00 bn, by PLN 1.3 bn (+79%y/y)
Increase of total lending exposure to wholesale clients up to the level of PLN 14.9 bn, i.e. 26% annually
Maintaining high quality
of customer service:
Implementation of further modules of Front-End application in the Bank’s branches
(II Q 2008)
Migration of strategic client services to ICBS application
Development of simple and
honest product offer:
Implementation of CHF denominated mortgage loans offer
(II Q 2008)
Improvement of lending products for corporate clients (guarantee line, Fast Track)
Translation of business
activities into Bank’s
financial results:
Increase of the number of Self-banking areas in the Bank branches up to 248 as at the end of June
Further three subscriptions of ILU (structured deposits)
Increase of gross result in 1H 2008 by 23.1% comparing to 1H 2007
Increase of gross result after deduction of one-off events by 10.8%
Increase of core operating effectiveness ratios: ROA, ROE, C/I
REINFORCEMENT OF MARKET POSITION and INCREASE OF SHAREHOLDER’S VALUE
* Net growth as compared to the end of 2007
4
Major business achievements of the Bank
- increase of deposits volume by PLN 9.2 billion y/y & loans volume by PLN 4.9 billion y/y
30.06.07
31.12.07
31.03.08
30.06.08
Change
30.06.08/
31.12.07
Total deposits
38,489
43,620
44,772
47,478
9%
23%
Total retail clients deposits
23,835
27,450
29,508
30,477
11%
28%
Total wholesale clients deposits
14,654
16,170
15,264
17,001
5%
16%
Total funds entrusted by retail clients *
32,046
34,967
34,993
34,906
0%
9%
TFI assets distributed by ING Bank Ślaski S.A.
8,211
7,517
5,486
4,429
-41%***
-46%***
Total loans
15,580
17,361
18,958
20,521
18%
32%
Total volume of loans to retail clients
3,740
4,574
4,994
5,651
24%
51%
PLN-mortgage loans volumes **
1,689
2,366
2,645
3,015
27%
79%
11,840
12,787
13,964
14,870
16%
26%
in PLN million
Total volume of loans to wholesale clients
* including TFI assets
** excluding ING Mortgage Bank
*** in the IH 2008 repurchase of TFI assets amounted to PLN 1,896 million, whereas decrease of the value of TFI assets amounted to PLN 1,191 million.
5
Change
30.06.08/
30.06.07
ING Bank Śląski financial performance
1-2Q 2007
in PLN million
1-2Q 2008
Change
Total operating income *
1,059.2
1,206.0
+ 13.9%
Result before risk costs
380.3
450.8
+ 18.5%
Risk costs
33.0
58.2
+ 76.4%
Gross profit
413.3
508.9
+ 23.1%
Net profit**
335.2
407.5
+ 21.6%
Cost/Assets (%)
2.6%
2.5%
- 0,1 p.p.
C/I (%)
64.1%
62.6%
-1,5 p.p.
ROE (%)
20.5%
23.7%
+3,2 p.p.
* Including share in net profits of affiliates recognized by equity method
** Net profit for the shareholders of the parent entity
6
Market position of ING Bank Śląski
- household market
Volumes and share in the household loans market:
Volumes and share in the household deposits market:
Household deposits - volumes (in PLN mln)
Bank
Bank
Market
29,000
Household loans - volumes (in PLN mln)
6,500
335,000
Market
400,000
9.4%
9.4%
2.0%
26,000
1.9%
5,500
300,000
9.4%
300,000
1.9%
9.2%
23,000
1.9%
265,000
8.9% 9.0%
4,500
8.8%
8.7%
8.8% 8.6%
200,000
1.8%
20,000
230,000
3,500
1.8%
2.1% 1.9%
1.9%
2.1%
ING Bank Śląski
Market
ING Bank Śląski
III
VI
20
08
IX
00
7
XI
I2
VI
III
IX
XI
I2
00
6
VI
100,000
III
00
8
III
2,500
VI
2
IX
00
7
XI
I2
VI
III
20
06
IX
XI
I
VI
195,000
III
17,000
Market
* The data on the curves represent the market share of ING Bank Śląski (stand-alone data) as at the end of subsequent quarters according to NBP classification
7
Market position of ING Bank Śląski
- wholesale market
Volumes and share in the wholesale loans market:
Volumes and share in the wholesale deposits market:
Wholesale deposits - volumes (in PLN mln)
Bank
20,000
Market
Bank
230,000
16,000
Wholesale loans- volumes (in PLN mln)
Market
280,000
6.3%
15,000
8.3%
18,000
209,000
14,000
13,000
8.3%
16,000
7.8%
8.3%
8.0%
5.8% 5.6%
188,000
220,000
5.8%
12,000
5.9%
7.7%
11,000
14,000
250,000
6.0%
5.8%
167,000
8.3%
10,000
190,000
5.6%
5.5%
7.9%
12,000
8.2%
9,000
146,000
7.7%
ING Bank Śląski
7,000
130,000
III
III
VI
20
08
IX
XI
I2
00
7
VI
III
IX
XI
I2
00
6
125,000
VI
160,000
8,000
10,000
III
5.4%
VI
IX
6
00
I2
I
X
III
VI
ING Bank Śląski
Market
IX
I2
XI
7
00
III
08
20
VI
Market
* The data on the curves represent the market share of ING Bank Śląski (stand-alone data) as at the end of subsequent quarters according to NBP classification
8
Table of contents
1.
Introduction to financial results and market position of the Bank
2.
Business development
3.
Financial results for 2Q 2008
9
Retail Banking
- increase of core products sales
Retail Banking
Number of retail clients went up by 276,600 net annually (including 67,500 in 2Q 2008) to the level of PLN 2.41 million.
Number of small business segment’s clients went up to the level of PLN 163,800 (by 24,700 y/y and by 11,000 in 2Q 2008)
Number of retail clients current accounts in 2Q 2008 went up to the level of 1.22 million
Beginning from 7th of January 2008 85,800 Direct Current Accounts have been opened.
Increase of structured deposits assets value (ILU & ILT) by PLN 296 million q/q (+31%) and PLN 646 million y/y (+108%).
Total lending exposure of retail customers up to the level of PLN 5.7 billion. Increase by PLN 657 million (+13%) q/q and by PLN
1.9 billion (+51%) y/y.
Increase of PLN denominated mortgage loans volume by over PLN 370 million (+14%) in the 2Q 2008 to the level of nearly PLN
3 billion. Annual increase by PLN 1,326 mln, i.e +79%
Implementation of CHF denominated mortgage loans offer – PLN 71 million debt volume in June 2008.
Lending to small businesses went up by PLN 119 million (+13%) in the second quarter 2008 and by PLN 344 million (+48%) as
compared to the second quarter 2007 to the level of PLN 1 067 million as at the end of June 2008.
Increase of the number of electronic payments in 2Q 2008 by 14% up to 14.1 million. Share of electronic payments in total
operations amounted to 96% during the covered period.
Increase of ING BankOnLine users in 2Q 2008 by 84,000 up to the level of 962,000.
Total number of branches as at the end of June 2008 reached 430, including 100 new type branches.
10
Client base
- total number of retail clients equaled to 2.41 million
Increase of number of retail clients in the second quarter to the level of 2.41 million:
- net increase by 276,600 during the year and by 67,500 during the second quarter.
- increase of the number of clients from small business segment up to the level of 163,800 (by 24,700 y/y and by
11,000 in the 2Q 2008).
Number of retail clients:
+13%
+3%
2.04
2.09
2.13
129.4
127.5
2.21
128.1
98.3
31.12.2006
31.03.2007
30.06.2007
30.09.2007
2.34
2.26
125.4
113.8
31.12.2007
102.8
31.03.2008
Number of clients (in million)
Gross increase of clients number (in thousands)
11
2.41
30.06.2008
Funds Entrusted
- volume of funds entrusted maintained at the level of nearly PLN 35 billion
The value of retail funds deposited within the Bank remained at the level of nearly PLN 35 billion.
OKO Saving Accounts volumes increased in 1H 2008 by PLN 1,708 mln, including PLN 261 million in 2Q 2008.
TFI assets outflow amounted to PLN 1.9 bn in 1H 2008.
Increase of ILU & ILT (structured deposits) assets volumes by PLN 427 billion in the first half of 2008.
Increase of term accounts volumes by 25% during 1H 2008 (by 5% q/q).
Portfolio of funds entrusted by retail clients (in PLN million):
+9%
30,728
32,046
6,780
8,211
3,632
611
3,265
3,509
597
3,545
33,513
8,281
3,319
640
3,702
16,440
16,184
17,572
31.03.2007
30.06.2007
30.09.2007
Sav ing accounts
Current accounts
Change
30.06.2008/ 30.06.2008/
30.06.2007
31.03.2008
0%
34,967
7,517
3,522
816
4,020
34,993
34,906
5,486
4,429
-19%
-46%
4,196
947
3,826
4,411
1,243
4,024
+5%
+26%
+31%
+108%
+5%
+14%
+1%
+29%
19,092
20,539
20,800
31.12.2007
31.03.2008
30.06.2008
ILU & ILT (structured deposits)
Term accounts and deposits
12
TFI assets
Current accounts
- 86,000 Direct Current Accounts as at the end of June 2008
Beginning from 7th of January 2008 - 85,800 Direct Current Accounts have been opened.
Increase of current accounts number up to the level of 1,222,800 (+33,000 net and as compared to March 2008).
Increase in the number of small business current accounts up to the level of 161,900 (by 9% q/q).
Current accounts volumes increased annually by PLN 479 million (+14%).
Number of active current accounts
(in thousands):
Volume of current accounts
(in PLN million):
Number of active small business
current accounts (in thousands):
+14%
+12%
+19%
+3%
4,020
1,093.9 1,122.0
1,153.9
1,189.8 1,222.8
1,039.7
31.12.2006 30.06.2007 30.09.2007 31.12.2007 31.03.2008 31.06.2008
+5%
+9%
127.6
135.8
137.3
141.8
148.8
161.9
31.12.2006 30.06.2007 30.09.2007 31.12.2007 31.03.2008 31.06.2008
13
3,545
30.06.2007
3,702
30.09.2007
31.12.2007
3,826
31.03.2008
4,024
30.06.2008
Saving accounts
- 1.56 million OKO Saving Accounts opened and PLN 20.8 billion funds collected
The number of PLN denominated OKO saving accounts went up by 52,000 q/q (+4%) and by 234,000 y/y (+20%) up to
the level of 1.40 million. The total number of OKO saving accounts reached the level of 1.56 million (increase by 4% q/q
and 20% y/y).
Saving accounts balances in 2Q 2008 exceeded the level of PLN 20.8 billion (increase by 1% q/q and by 29% y/y).
Volume of Saving Accounts of the retail segment
(in PLN million):
Saving Accounts of the retail segment
(in thousands):
+20%
1,236
1,155
127
1,301
1,375
142
1,437
148
1,503
154
1,560
+1,447
158
15,450
1,036
31.12.2006
1,108
1,167
31.03.2007
30.06.2007
30.09.2007
31.12.2007
PLN denominated saving accounts
20,800
+1,388
119
1,289
+261
+1,520
135
1,233
+1%
+29%
+4%
1,349
1,401
31.03.2008
30.06.2008
16,184
31.12.2006 30.06.2007
FX denominated saving accounts
14
3 kw. 2007
4Q 2007
1Q 2008
2Q 2008
30.06.2008
Term investment deposits and structured deposits
- PLN 1.5 bn invested in term deposits and structured deposits
Noticeable increase of clients interest in term investment deposits and structured deposits, as an alternative form of
investing capital in the period of strong equity market fluctuations.
Increase of structured deposits assets value (ILU & ILT) by PLN 296 million q/q (+31%) and PLN 646 million y/y (+108%).
New subscriptions of ILU proceeded in the second quarter 2008.
Increase of the volume of term deposits by PLN 215 million q/q (+5%) and PLN 902 million y/y (+26%). Implementation of
eLokata, a new deposit product for affluent clients (attractive interest rate – 6% for 12 months)
Volume of structured investment deposits
(in PLN million):
Volume of term accounts and deposits
(in PLN million):
+26%
+108%
+5%
+31%
4,196
1,243
3,662
3,509
3,319
4,411
3,522
947
816
544
597
640
31.12.2006 30.06.2007 30.09.2007 31.12.2007 31.03.2008 30.06.2008
15
31.12.2006 30.06.2007 30.09.2007 31.12.2007 31.03.2008 30.06.2008
Loan portfolio for retail segment clients
- growth of retail loan portfolio by 51% y/y
Growth of loans granted to retail segment clients in the first quarter by PLN 657million (+13%) and more than PLN 1.9
billion y/y (+51%), mainly resulting from the increase of PLN mortgages volume by PLN 370 million q/q (+14%) and by
PLN 1.3 million y/y (+79%).
Increase in volume of retail loans by PLN 1,077 mln during 1H 2008, comparing to PLN 500 mln in 1H 2007.
Implementation of CHF denominated mortgage loans offer – PLN 71 million debt volume in June 2008.
Increase in volume of cash loans (+41% q/q and +210% y/y) as well as loans granted to SME segment (+13% q/q and
+48% y/y).
Loan portfolio for retail segment clients (in PLN million):
+13%
+51%
4,994
4,574
4,220
3,740
3,240
558
118
622
201
586
1,154
31.12.2006
PLN mortgages
399
138
579
213
723
302
304
530
265
325
256
552
265
811
364
218
566
238
798
1,689
2,037
2,646
30.06.2007
30.09.2007
31.12.2007
31.03.2008
Credit cards
Ov erdraf ts
1067
948
2,366
Loans to SME
5,651
71
260
428
527
283
Cash loans
16
Inactiv e porf olio
3,015
30.06.2008
FX mortgages
Change
30.06.2008/ 30.06.2008/
30.06.2007
31.03.2008
-8%
-31%
+41%
0%
+210%
-9%
+7%
+33%
+13%
+48%
+14%
+79%
Mortgage loans
- PLN mortgage loans – the main force driving the increase of credit activity
Increase of PLN mortgages portfolio value by PLN 370 million (+14%) q/q up to the level of nearly PLN 3 billion.
Further development of Loan Xpress project; expansion to new cities and distribution channels, implementation of new
credit goals (purchasing estate from developer)
Implementation of CHF denominated mortgage loans offer – sales volume at the level of PLN 154.2 million
PLN mortgage loans in retail segment
(in PLN million)*:
Sales volume of new mortgages
(in PLN million):
+54%
+14%
+79%
+370
3,015
+280
1 220
CHF
+329
154
PLN
+347
1,689
1,066
1,154
31.12.06 30.06.07
791
3Q 07
4Q 07
* Excluding ING Mortgage Bank. Including loans secured by mortgages
17
1Q 08
2Q 08
30.06.08
1H 07
1H 08
Cash loans
- over 3 times increase of cash loans volume annually
Good results in terms of cash loans sales. Increase by PLN 124 million q/q (+41%) and PLN 290 million y/y (+210%).
Increase of volume of cash loans by PLN 172 million in the first half of 2008, comparing to PLN 20 million in the first half
of 2007.
Continuation of prescoring actions and modification of prescoring offer (increase of maximum amount and extension of
maximum loan tenor)
Volume of cash loans (in PLN million):
+210%
+41%
428
304
256
218
118
31.12.2006
138
30.06.2007
30.09.2007
31.12.2007
31.03.2008
30.06.2008
18
Small business
- dynamic growth of volumes in the small business segment
Growth of loan exposure in the second quarter by PLN 119 million (+13%) as a result of a prescoring campaign. Annual
increase by PLN 344 million (+48%).
Total value of funds deposited on small business accounts increased by PLN 98 million q/q (+3%), annual increase by
PLN 478 million (+18%).
Volume of total loans granted to small business
(in PLN million):
Volume of small business deposits
(in PLN million):
+13%
+18%
+48%
+119
1,067
+137
723
+75
2,614
69
+13
586
31.12.2006 30.06.2007
3Q 2007
4Q 2007
1Q 2008
2Q 2008
30.06.2008
19
2,942
81
2,659
3,276
79
+3%
3,039
98
3,137
79
74
1,615
1,483
1,302
1,306
1,243
1,279
1,377
31.12.2006
30.06.2007
30.09.2007
1,583
31.12.2007
Term accounts and deposits
Saving accounts
Current accounts
1,630
1,670
1,311
1,388
31.03.2008
30.06.2008
Retail branches network
- 100 new type branches were opened as at the end of June 2008
In the second quarter of 2008 the Bank opened 14 new type branches, thus expanding the number of such branches to
100 as of June 2008
Continuation of self-banking areas implementation in traditional branches. 148 out of 330 traditional branches were
operating on self-banking basis as at the end of June 2008.
Number of self-banking areas:
Number of the Bank’s branches:
404
361
350
31
430
248
375
75
20
415
86
100
46
170
100
125
86
330
330
329
329
329
330
62
75
148
38
23
84
46
1Q 2007
2Q 2007
3Q 2007
Traditional branches
4Q 2007
1Q 2008
2Q 2008
New type branches
47
20
3
31
7
16
1Q 2007
2Q 2007
3Q 2007
In the traditional branches
20
4Q 2007
1Q 2008
2Q 2008
In the new type branches
Wholesale Banking
- noticeable increase of lending
Wholesale Banking
Growth of the number of corporate clients observed in all segments – up by 194 q/q total and by 756 clients y/y
- to the level of 12,742 as at the end of June 2008.
Increase of wholesale deposits volume by 11% q/q and by 16% annually to the level of PLN 17 billion.
The total value of wholesale loans portfolio increased to the level of nearly PLN 14.9 billion (+6% q/q
and +26% y/y).
Increase of total Asset Based Lending volume up to the level of PLN 1,116 million (+18% q/q and +160% y/y).
Revenue on FM products sales amounted to PLN 157.5 million in the first half of the year with a simultaneous
favourable change in the revenue structure.
Strong third position on mid-term commercial bonds issuance market and forth on the short-term.
ING Securities was no.2 player on the equities trading market with a share of 12.3%.
21
Client base
- stable growth of wholesale client base
The number of corporate clients went up by 756 y/y and 194 q/q.
Growth of the client base (Mid sized-.companies and Mid corporates) by 183 in the second quarter 2008 and by 726
firms annually.
Number of wholesale clients*:
+756
Change (number of clients)
+194
12,548
12,742
12,142
12,309
631
638
644
655
616
625
11,127
11,361
11,511
11,671
11,904
12,087
31.12.2006
30.06.2007
30.09.2007
31.12.2007
31.03.2008
30.06.2008
11,986
11,743
Mid-sized companies and Mid corporates
Mid corporates
* Including effects of client base resegmentation
** Data base of Strategic clients was updated and inactive clients were removed.
22
30.06.2008/
31.03.2008
30.06.2008/
30.06..2007
+11
+30
+183
+726
Cash Management
- growth of wholesale clients deposits volume by 1.7 billion in the second quarter
Increase of Strategic clients deposits by 17% q/q and 21% y/y.
Increase of the deposits volume of Mid-sized companies and Mid corporates by 5% during second quarter 2008 and by
10% annually.
Volume of wholesale deposits (in PLN million):
Cash
Management
+16%
+11%
16,170
14,067
7,827
6,240
14,654
14,534
7,858
7,676
6,797
6,859
Change
17,001
15,264
8,978
8,170
7,192
7,095
9,539
7,462
31.12.2006 30.06.2007 30.09.2007 31.12.2007 31.03.2008 30.06.2008
Mid-sized companies and Mid corporates
23
30.06.2008/ 30.06.2008/
31.03.2008 30.06.2007
Strategic clients (capital groups)
+17%
21%
5%
10%
Lending
- the value of total wholesale lending portfolio increased by PLN 2.1 bn in 1H 2008
Increase of lending exposure to Strategic clients by PLN 659 million q/q (+9%) and by PLN 1,728 million y/y (+28%).
Continuation of 2007 growth trends in Mid corporates and Mid-sized companies segments. Increase of total lending
exposure by PLN 248 million q/q (+4%) and more than PLN 1.3 billion y/y (+23%).
Volume of loans for wholesale clients (in PLN million):
Lending
+26%
+6%
13,964
11,840
Change
14,870
30.06.2008/ 30.06.2008/
31.13.2008 30.06.2007
12,787
12,182
10,733
7,257
7,916
+9%
+28%
+4%
+23%
6,567
6,188
6,225
5,652
5,957
6,219
6,706
6,954
4,967
31.12.2006
30.06.2007
30.09.2007
31.12.2007
31.03.2008
30.06.2008
5,765
Mid-sized companies and Mid corporates
24
Strategic clients (capital groups)
Asset Based Lending
- increase of the value of ABL agreements by 160% y/y
Value of ABL agreements amounted to PLN 1,116 million as at the end of June 2008, i.e. increase by 18% q/q and
+160% y/y.
Dynamic development recorded especially in the area of leasing (+26% q/q and 150% y/y) and factoring (+28% q/q
and +118% y/y)
Value of ABL agreements (in PLN million):
ABL
Change
+18%
+160%
1,116
30.06.2008/ 30.06.2008/
31.03.2008 30.06.2007
945
759
579
+150%
+28%
+118%
+5%
+205%
461
560
387
430
302
286
+26%
232
131
168
353
369
31.03.2008
30.06.2008
117
121
61
105
77
121
173
31.12.2006
30.06.2007
30.09.2007
85
255
Commercial mortgages*
31.12.2007
Factoring
*Included in ING Bank Śląski consolidated balance sheet
25
Leasing
Financial markets income
- increase of the result on own operations and operations with clients
In the first half of 2008 financial market result was 92% higher than in the first half of 2007.
Result from operations with clients (almost 66% share in all financial markets result) – increase by 62%.
Financial markets result (in PLN million):
Financial
Markets
products
+92%
+130%
271.8
+15.7%
145.8
93.3
+202%
126.0
52.4
141.3
40.9
78.7
78.0
30.9
24.4
178.5
110.3
63.3
6.6
23.5
33.9
85.1
+62%
53.6
56.7
55.3
54.3
-20.4
1-2Q 2007
93.3
1Q 2007 2Q 2007 3Q 2007 4Q 2007 1Q 2008 2Q 2008
1-2Q 2008
Operations with clients
26
Proprietary trading
ING Securities
- no.2 player on equities trading market
As at the end of the second quarter 2008 ING Securities was no.2 player on the equities trading market with a share of
12.3%. The Company was no. 5 player on the futures trading market with a share of 5.1%.
The number of Internet brokerage accounts went up by 4% q/q and totalled more than 13,000.
Net profit of ING Securities for the second quarter 2008 totalled PLN 6.3 million as compared to PLN 18.2 million in 2Q
2007 (-65.4%) resulting from the situation on the capital market.
ING Securities market share in equities trading
(second quarter of 2008):
DM Banku
Handlowego
13.26%
12.30%
ING SECURITIES
11.82%
DM BZ WBK
9.52%
IPOPEMA
9.10%
UNICREDIT CAIB
27
Table of contents
1.
Introduction to financial results and market position of the Bank
2.
Business development
3.
Financial results for 2Q 2008
28
ING Bank Śląski financial performance after 2Q 2008
- increase of core values
1-2Q 2007
in PLN million
1-2Q 2008
Change
Result on interest*
473.6
606.3
+ 28.0%
Result on fees and commissions
455.6
422.5
- 7.3%
Total operating income **
1,059.2
1,206.0
+ 13.9%
Total costs
679.0
755.2
+ 11.2%
Result before risk costs
380.3
450.8
+ 18.5%
Risk costs
33.0
58.2
+ 76.3%
Gross profit
413.3
508.9
+ 23.1%
Net profit ***
335.2
407.5
+ 21.6%
Balance sheet total
53,203.1
60,527.1
+ 13.8%
Equity
3,621.9
3,977.6
+ 9.8%
ROA (% )
1.4%
1.5%
+ 0,1 p.p.
ROE (% )
20.5%
23.7%
+ 3,2 p.p.
C/I ratio (% )
64.1%
62.6%
- 1,5 p.p.
Revenue/Assets ratio (%)
4.0%
4.0%
-
Cost/Assets ratio (%)
2.6%
2.5%
- 0,1 p.p.
* Including swap points
** Including the share in net income of affiliated companies presented using the equity method
*** Net profit for shareholders of the dominant entity
29
Total income per income statement categories
– almost 14–percent income growth, as one of the major factors improving effectiveness
Increase of result on interest, mainly due to increase of swap transactions income and lending activity growth.
Increase of result on fees and commissions as compared to the first quarter 2008, despite decrease of income on
distribution of mutual fund participation units and income on brokerage activity.
Growth of income from remaining activities mainly due to clients operations scale growth on the financial markets and
sale of the MasterCard Incorporated shares (PLN income 25.3 million).
Total income per income statement category (in PLN million)*:
Change
+13.9%
1,206.0
1,059.2
177.2
+19.9%
+36.2%
538.2
130.0
422.5
- 7.3%
79.7
606.3
+28.0%
581.2
521.1 538.7
61.6
50.3
474.7
80.9
455.6
473.6
+7.5%
2Q 2008/
1Q 2008
624.7
96.2
+18.9%
+91.3%
233.3
231.0
213.3
207.1
215.4
+4.0%
-7.7%
222.3
236.1
237.4
246.1
262.8
293.2
313.1
+6.8%
+31.9%
1Q 08
2Q 08
-1.4
1-2Q 2007
1-2Q 2008
1Q 07
Result on interest
2Q 2008/
2Q 2007
2Q 07
3Q 07
4Q 07
Result on fees and commissions
Remaining activities
* Total income per income statement category was denominated. The category ”Result on interest” includes swap points. The category ”Remaining
activities” includes the share in the net profit of affiliated entities presented using the equity method
30
Total income per business lines
Maintaining of Retail Banking segment income at the stable level in the 1H 2008 as compared to 1H 2007 due to:
increase of FM income and decrease of deposit-lending activity.
Growth of Wholesale Banking income mainly due to the significant increase of financial market products sales.
Growth of income from remaining activities mainly due to own operations.
Total income per business lines (in PLN million):
Change
+19.9%
+7.5%
+13,9%
+13.9%
581.2
1,206.0
1,059.2
170.3
+76.8%
96.3
356.4
412.2
606.5
623.5
1-2Q 2007
1-2Q 2008
Retail
538.2 521.1 538.7
474.7 88.5
55.3 41.1 54.4
9.6
299.6 306.9 299.8 285.6 284.4 339.1
Wholesale
31
4Q 07
1Q 08
+99.0%
-2.2%
+17.7%
+19.2%
+10.5%
203.8
+2.8%
3Q 07
-7.6%
81.8
+15.6%
2Q 07
2Q 2008/
2Q 2007
624.7
183.3 173.1 184.5 179.5 208.3
1Q 07
2Q 2008/
1Q 2008
2Q 08
Own operations
Total costs
Growth of personnel costs in the first half of the year by 11.5% comparing to 1H 2007.
Growth of other costs (y/y) mainly due to strategic projects implementation aimed at further streamlining of processes and
optimization of sales structure.
Total costs (in PLN million):
Change
+11.2%
+13.0%
+6.1%
2Q 2008/
1Q 2008
2Q 2008/
2Q 2007
+11.1%
+19.7%
+0.9%
+6.4%
755.2
679.0
+10.9%
352.5
355.2 355.3 366.5
335.1 343.9
391
172.0
179.5
154.6
171.9
175.7
1Q 07
2Q 07
3Q 07
180.5
326.5
1-2Q 2007
388.7
364.2
+11.5%
1-2Q 2008
Personnel cost
156.6
185.2
205.8
198.7
181.3
182.9
4Q 07
1Q 08
2Q 08
Other operating cost
32
Financial result
Improvement of result before risk costs, both quarterly (+9.9%) and annually (+33.2%) due to dynamic increase of
Bank’s revenue.
Increase of gross result by 37.5% q/q.
One-off events -Securitisation of corporate lending portfolio and MasterCard Incorporated shares sales
Result before risk costs (in PLN million):
+33.2%
Gross result (in PLN million):
+9.9%
+44.5%
Net result (in PLN million):
+39.3%
+37.5%
+34.6%
233.8
236.0
214.7
203.1
294.6
249.8
177.2 183.5
209.4
214.3
203.9
198.1
173.7
167.4 167.8
119.4
123.9
1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08
1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08
33
97.5
1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08
Assets, equity and profitability ratios
Stabilisation of Bank’s assets value at the level of nearly PLN 61 billion. Increase of core effectiveness ratios as
compared to 1Q 2008.
Decrease of equity comparing to March 2008, due to dividend payout (amounted to PLN 152.2 mln) and updating the
valuation of financial assets available for sale.
Assets (in PLN million) / ROA :
Equity (in PLN million) / ROE :
+13.8%
+9.8%
+0.5%
60,234
53,203
53,247
-0.9%
60,527
52,011
3,622
3,820
3,839
4,014
3,978
23.7%
1.4%
1.4%
1.2%
30.06.07
30.09.07
Assets
31.12.07
1.5%
20.5%
21.1%
30.06.08
30.06.07
30.09.07
1.3%
31.03.08
Equity
ROA
34
18.9%
31.12.07
20.0%
31.03.08
30.06.08
ROE
Bank assets
Growth of lending activity share (to 34%) in the structure of assets due to 11.6% q/q growth of loan portfolio.
Diversification of the portfolio due to faster increase of households lending.
Increase of securities share in the structure of assets to the level of 47% due to the allocation of deposits from interbank
market to investment assets.
Structure of assets:
Gross loans for clients (in PLN million):
53,203
53,247
52,011
60,234
60,527
3%
2%
3%
2%
2%
28%
29%
32%
30%
34%
+36.7%
+11.6%
20,775
18,613
31%
33%
33%
15,195
16,007
33%
29%
31.03.2008/
31.12.2007
16,941
31.03.2008/
31.03.2007
42%
47%
34%
Change
23%
5%
3%
4%
3%
15%
3%
30.06.07
30.09.07
31.12.07
31.03.08
30.06.08
Other
Loans and cash loans granted
Securities
Deposits with other banks
Cash within the bank
14,860
12,012
11,403
4,162
4,603
4,928
5,358
5,915
30.06.07
30.09.07
31.12.07
31.03.08
30.06.08
35
+34.7%
+10.4%
+42.1%
13,255
11,033
Households
+12.1%
Corporates
Bank liabilities
Increase of amounts due to clients share in the structure of Bank’s liabilities due to increase of deposits base by over
PLN 2.6 billion.
Visible increase of wholesale deposits volume by 12.3% q/q.
Growth of retail deposit base by 2.2% q/q.
Structure of liabilities:
Clients deposits (in PLN million):
53,203
53,247
52,011
60,234
60,527
10%
7%
6%
10%
4%
4%
9%
9%
5%
10%
+24.3%
37,545
76%
86%
75%
17,544
15,561
7%
7%
7%
7%
30.06.07
30.09.07
31.12.07
31.03.08
30.06.08
Other liabilities
44,045
31.03.2008/
31.12.2007
38,866
79%
7%
Change
46,686
42,901
76%
+6.0%
16,430
18,458
+12.3%
+18.6%
+2.2%
+28.4%
15,568
21,984
23,298
30.06.07
30.09.07
25,356
27,616
28,228
31.03.08
30.06.08
Amounts due to other banks
Amounts due to clients
Equity
Households
36
31.03.2008/
31.03.2007
31.12.07
Corporates
Capital adequacy
– Bank posses enough capital for further development of credit action
As at the end of June 2008 solvency ratio amounted to 11.22%.
Decrease of solvency ratio at the beginning of the year resulting from:
- Implementation of Basel II rules: operational risk requirements of PLN 274.2 million, application of standard method
to credit risk calculation in wholesale banking (Bank will implement advanced calculating method since August
2009)
- Further growth of lending activity, resulting in increase of Loans to deposits ratio.
Loans to deposits ratio:
Solvency ratio:
25%
2,372
2,500
+4.0 p.p.
2,316
20%
40.5%
41.2%
30.06.07
30.09.07
39.5%
+2.2 p.p.
42.3%
44.5%
2,000
15%
15.70%
10%
1,792
1,819
13.41%
13.12%
1,519
11.15%
11.22%
1,500
5%
0%
1,000
31.12.06 30.06.07
Operational risk
31.12.07 31.03.2008 30.06.08
Capital requirement
Solvency ratio
37
31.12.07
31.03.08
30.06.08
Credit portfolio and impairment write-offs
Further drop of the share of impaired portfolio in the total portfolio.
Maintaining cautious credit policy stance towards impaired credit portfolio – as the end of June impairment portfolio
coverage ratio was at the level of 78.4% (decrease of the ratio because of sale of the part of portfolio on which full
reserve was created).
Share of impaired portfolio in the total loan
portfolio:
3.8%
3.3%
3.0%
2.9%
Impairment write-offs (in PLN million) /
Impaired portfolio coverage ratio:
1.8%
88.9%
86.6%
89.6%
87.4%
78.4%
66.3
96.2%
96.7%
97.0%
97.1%
98.2%
58.6
38.4
26.7
43.0
-26,7
15.6
-66.3
4.5
-0.4
2Q 07
3Q 07
4Q 07
Share of non-impaired portfolio
1Q 08
2Q 08
2Q 07
3Q 07
4Q 07
1Q 08
2Q 08
Impairment write-offs related to sales of part of retail lending portfolio
Impairment write-offs
Impairment portfolio coverage ratio
Share of impaired portfolio
38
ING Bank Śląski results
- Profit & Loss statement in quarterly layout
ING Bank Śląski P&L statement in quarterly layout (consolidated, analytical):
39