poland – the eu front runner in terms of growth performance bre - bre bank – best – in - class...
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Poland – the EU front runner in terms of growth performance
BRE - BRE Bank – best – in - class financial services’ provider in Poland
Tel Aviv, Dec 12, 2010
Przemysław GdańskiBRE Bank Management Board Member Head of Corporate Banking
3
Poland - the largest from EU new member states in terms of area and population is located at the heart of Europe at the crossroads of major communication corridors, became the EU front runner in terms of growth performance in 2009 as the global crisis wreaked havoc to European economies.
With exports to GDP ratio at about 40% it can be classified as a relatively closed economy, which in times of the crisis turned out to be a blessing rather than a curse. Relatively smaller dependence (as compared to its regional peers) on foreign trade reduced the impact of foreign demand shock.
Key macroeconomic data – features of Polish economy
2009
Area (Sq. Km) 312 679
Population (mn) 38.2
GDP Growth (%) 1.7
Inflation Rate (%) 3.5
Exports volume (% of GDP) 38.9%
Source: StatOffice.
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Poland – the EU front runner amid the global recession…
Poland’s GDP (% YoY)
Source: StatOffice, European Commission interim forecast (Sep’10), BRE forecast.
European Commission GDP forecasts (%
YoY)
0,0
1,0
2,0
3,0
4,0
5,0
6,0
7,0
2005 2006 2007 2008 2009 2010F 2011F 2012F
BRE forecast 2009 2010F
Germany -4,7 3,4Spain -3,7 -0,3France -2,6 1,6Italy -5,0 1,1Netherlands -3,9 1,9Euro area -4,1 1,7POLAND 1,7 3,4UK -4,9 1,7
EU27 -4,2 1,80,0
1,0
2,0
3,0
4,0
5,0
6,0
7,0
2005 2006 2007 2008 2009 2010F 2011F 2012F
BRE forecast
5
-40
-20
0
20
40
09-07 03-08 09-08 03-09 09-09 03-10 09-10
Exports, %YoY Imports, %YoY
-10
-5
0
5
10
15
20
08-08 01-09 06-09 11-09 04-10 09-10
Retail sales, %YoY
-15
-10
-5
0
5
10
15
20
25
08-08 01-09 06-09 11-09 04-10 09-10
Industry, %YoY Construction, %YoY
\
Exports and imports (% YoY)
…currently notes dynamic rebound…
Production in industry and construction (% YoY, wda*)
Retail sales (% YoY)
One-off effects of harsh winter
* wda – working day adjusted.
Source: NBP, StatOffice.
Foreign trade increase stimulates Polish industry
Public investment sustains growth in construction sector
Gradual stabilization on the labour market supports retail sales
6
…based on recovering external demand from Germany
Exports of Poland and Germany (% YoY)
Source: Bloomberg, NBP, Eurostat.
Strong trade relations between Poland and Germany
Germany – the main recipient of Polish exports
Rebound in Germany boosted Polish economy
-40
-30
-20
-10
0
10
20
30
40
01'01 01'02 01'03 01'04 01'05 01'06 01'07 01'08 01'09 01'10
German exports Polish exports
7
2,0
3,0
4,0
5,0
6,0
7,0
8,0
07-09 11-09 03-10 07-10 11-10
220
240
260
280
300
320
340
360
Poland (%), LA Germany (%), LA Spread (bp), RA
Financial markets have confidence in Polish assets
Sou
rce:
NB
P, M
inF
in, B
loom
berg
.
Poland-Germany 10Y T-bond spread (bp)
0
50
100
150
200
250
300
12-06 06-07 12-07 06-08 12-08 06-09 12-09 06-10
40
60
80
100
120
140
03-07 10-07 05-08 12-08 07-09 02-10 09-10
Non-residents’ participation in Polish T-bond market (PLN
bn)
Non-residents’ participation in Polish equity market (PLN
bn)
2,0
4,0
6,0
8,0
10,0
12,0
14,0
05-07 12-07 07-08 02-09 09-09 04-10 11-10Poland Greece Germany Ireland Hungary
10Y T-bond yields (%)
8
25,6
6,8
6,7
6,3
5,7
4,1
3,6
2,6
2,6
2,6
0,3
0 10 20 30
Germany
France
Italy
UK
Czech Rep.
Netherlands
Russia
Hungary
Sweden
Spain
Israel
Poland’s trade with Israel is rather limited …
Main recipients of Polish exports
(EUR bn, 2009)
30,1
9,1
7,1
6,1
5,6
5,0
4,3
3,6
3,4
2,6
0,2
0 10 20 30 40
Germany
Russia
Italy
Netherlands
China
France
Czech Rep.
Belgium
UK
Slovakia
Israel
Main suppliers of Polish imports (EUR bn, 2009)
Source: Eurostat.
9
10,5
16,5
47,1
9,0
16,8 Chemicals andrelated products
Manufacturedgoods classifiedchiefly by materialMachinery andtransportequipmentFood and liveanimals
Others
35,1
7,0
22,6
26,5
8,8 Chemicals andrelated products
Manufacturedgoods classifiedchiefly by material
Machinery andtransportequipment
Miscellaneousmanufacturedarticles
Others
Source: Eurostat.
Main export goods:
vehicles
ships, boats
electrical machinery and equipment
Main import goods:
chemical products
arms, ammunition
electrical machinery and equipment
… and characterized with the following structure
Polish exports to Israel - decomposition (%, 2009)
Polish imports from Israel - decomposition (%, 2009)
10
Israeli investors’ engagement in Poland is low
FDI inflow to Poland - decomposition (EUR bn,
2008)*
Source: NBP.
Poland’s liabilities resulting from FDI (EUR bn, 2008)
1,6
1,6
1,3
1,1
0,6
0,5
0,5
0,4
0,4
0,3
0,04
0,0 0,5 1,0 1,5 2,0
Germany
Netherlands
Luxembourg
Sweden
France
Cyprus
Austria
Iceland
USA
UK
Israel
22,0
18,1
12,5
10,0
7,1
5,3
4,4
4,3
4,1
3,8
0,1
0 5 10 15 20 25
Netherlands
Germany
France
Luxembourg
USA
Sweden
UK
Italy
Austria
Belgium
Israel
Possible underestimation due to investment through companies registered in other countries.
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Summary
Poland – the only EU country without recession in 2009
Poland enjoys strong rebound, so far based mainly on external demand from Germany
Polish assets enjoy strong confidence of financial markets
Small trade volume between Israel and Poland
Limited FDI inflow from Israel to Poland – room for improvement
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BRE’s strong market position
By Total Assets
By Total Loans
By Total Deposits
3rd
3rd
4th
62,0 55,045,0 43,0 41,0
84,0
135,0
167,0
127,0
83,0
55,0
35,0 33,0 27,0 2833,0
PKO
BP
Peka
o
BRE
Mille
nniu
m
BZ W
BK
ING B
SK
Kred
yt B
ank
GE B
PH
131,0
101,0
48,039,0 33,0 26,0 24,0 20,0
45,0
Estimated position as of Q3 2010 (consolidated data)
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BRE Bank Group – universal financial services’ provider for financial institutions, corporate customers, HNWI, retail clients
ADVISORY SERVICES AND FINANCING SUUPORTED
BY EU FUNDING
TRANSACTIONALBANKING
RISKMANAGEMENT
STRUCTERED AND MEZZANINEFINANCING
COMPREHENSIVE WEALTHMANAGEMENT
INVESTMENTBANKING
BROKERAGESERVICE
FINANCING OF COMMERCIAL REAL ESTATE
FACTORING
LEASING
TRADITIONALDEPOSITS
FINANCING CURRENTAND INVESTMENT
ACTIVITIES
TRADE FINANCE
BRE Bank Group
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A leading universal bank in Poland… …with a differentiated value proposition
Multi-brand, multi-channel approach attracting both young and affluent customers
Leading in internet banking
Physical network of retail branches, financial centres and mobile agents
Open-architecture “Investment Fund Supermarket” and insurance supermarket
Continuous product innovation
BRE Bank at a glance
One of the largest universal banking groups in Poland serving over 3.5M retail and 13,000 corporate customers
Strong Corporate and Investment banking business with 3rd/4th largest corporate deposit/loan portfolio in Poland
Dynamically growing Retail Banking business with 3rd/6th largest retail loan/deposit portfolio in Poland
Retail Banking
Corporates &
Markets
Long-standing client relationships across large, medium-sized and small companies
Exclusively dedicated corporate branch and office network
Strengths across corporate and investment banking services
Innovative integrated transactional banking platform
Total assets (PLN B)
Loans(PLN B)
Deposits(PLN B)
PKO BP
Pekao
BRE Bank
ING BSK
BZ WBK
Millenium
Kredyt Bank
BHW
GE BPH
BGZ
Source: BRE Group 3 Q 2010 consolidated financial statements, 3 Q 2010 consolidated financial statements of the banks, Rzeczpospolita
167
135
84
62
55
45
43
41
36
27
127
83
55
33
33
35
27
13
28
19
131
101
45
48
39
33
26
24
14
20
16
Strong Corporate and Investment Banking BusinessExclusively dedicated physical distribution
networkIntegrated and advanced sales approach
Leading, comprehensive ‘one-stop shop’ product offering in Poland
13 thousand customers covered by 200 relationship managers in branches and headquarters
Renowned corporate banking internet platform iBRE
The best integrated bank corporate platform of 2009 in CEE(a)
New customer relationship management (“CRM”) system supports cross selling and upselling activities
Analysis of clients’ potential requirements
Planning and monitoring of sales activities
Transactional banking services available through MultiBank branches (appeal to SMEs)
Transactional banking innovative and tailored products
Short term and long term financing fourth largest corporate loan portfolio
Largest specialized mortgage bank (BRE Bank Hipoteczny)
Leasing No 2 with 9% market share (BRE Leasing)
Factoring market share ~14% (Polfactor)
Securities sales and trading leading market making positions (eg IRS/FRA, FX)
Debt origination market shares in non-government debt >20%
Structured and mezzanine finance services
Trade Finance Products
Brokerage a leader in brokerage and investment advisory (DI BRE)
Corporate Banking
Investment Banking
(a) Highest award in the „World’s Best Internet Bank“ (Global Finance) in the category of “the best integrated bank corporate platform of 2009” in CEE region
Source: Company data
17
Advisory services Advisory services and suportand suport
Transaction Banking - fully fledged product range well fitting to dynamic & expanding companies
Accounts
Liquidity managementZero / target balancing
Pooling
Mass payments identification and
reconciliation
Direct debit
Physical cash processingCash Deposits / transports
LCY and FCY payments (incl.SEPA); individual and
mass payments
Cards incl. prepaid
Cash disbursements
Postal order and other settlements
Sh
ort
term
fin
an
cin
g
(rece
ivab
le
dis
cou
nti
ng
).
Receivable managementDisbursements management
Dep
osi
ts
(in
cl
au
tom
ate
d
O/N
)
Electronic/internet baking (iBRE)
Reporting/intergration services
18
Transaction Banking - comprehensive catalogue of products & services satisfying the most complex businesses
Account Management Products Integrated Bank Account Agreement Current Accounts – LCY / FCY accounts Pay-roll accounts Escrow accounts Fiduciary accounts iBRE Account Management module
Concentration / Consolidation Products BRE Balancing – zero-balancing services BRE Pooling - notional BRE Pooling – physical International (X-border) Pooling with Commerzbank iBRE Liquidity Management and planning module iBRE Depo Plus – micro deposits management
Disbursements Management Products LCY Payments FCY Payments SEPA Payments BRE Mass Payments BRE Payroll Payments MT101 – Request for Transfer BRE Cards - Business Payment Cards Pre-paid Cards Physical Cash disbursements Cheques iBRE Banking, iBRE Cash, iBRE Cards - modules
Receivables Management Products BRE Collect – identification of incoming payments BRE Mass Collect – identification of bill payments / mass pymts BRE Collect Plus – identification, matching and reconciliation of incoming payments BRE Direct Debit – B2B and B2C direct debit BRE Direct Debit Consent Management EBPP with Retail Banking BRE Cash– 5 different models of cash collection services iBRE Collections and Direct Debit modules Cash Management reporting system – tailor made transaction reporting following individual needs
(Short Term) Financing Products Invoice Discounting (factoring) iFactoring – iBRE Invoice.net iBRE Trade Finance
(Short term) Investments Products BRE Auto-overnight LCY / FCY deposits Longer term deposits iBRE Deposit module
19
Transactional Banking Services
Account management LCY and FCY payment management Cash Management orders management
Other Banking Services
Letters of credit, bank guarantees, collections Treasury Custody services Information management Customized reporting & analyses Electronic invoices and debt discount
iBRE – Internet financial platform aggregating all financial services, within one access channel
iBRE – universal, integrated solution facilitating management of entire company’s financials
20
Treasury*
FX Spot FX forward FX Swap IR SWAP Real-time quoting
eDeposits Tenor declared by the client Current and customized rates
iBRE – universal, integrated solution facilitating management of entire company’s financials
21
BRE’s products & services in practice – x’border client case
Foreign conglomerate
Subsidary 1 Subsidary 2 Subsidary 3
Polish client Leading comapny
of the group
Subsidary 1 Subsidary 2 Subsidary 3
Subsidary 2
Subsidary Subsidary
Bo
rde
rB
ord
er
One of the leading logistic companies operating in over 100 countries with its headquarter in Western Europe’s country and subsidaries in Poland.
Group Revenue : ca. EUR 30 bn
Revenue in Poland: PLN 3 bn
One of the leading logistic companies operating in over 100 countries with its headquarter in Western Europe’s country and subsidaries in Poland.
Group Revenue : ca. EUR 30 bn
Revenue in Poland: PLN 3 bn
22
BRE’s products & services in practice – x’border client case (continued)
Client’s expectations: cash collections and withdrawals invoices’s and pay-roll and
payments (LCY and FCY) consolidation of financial means of
the group enabling effective management of group liquidity
automated financial data exchange between the company and the bank
guarantees credit and pre-paid cards
BRE Bank solutions offered to the client: cash operations – cash collections and withdrawals iBRE-internet based transactional system domestic, international payments and additional, complex cash management solutions international cash pooling comprehensive, fully automated financial data exchange – client’s financial system itegrated with iBRE platform comprehensive Trade Finance solutions wide range of payment and credit cards incl. pre-paid cards
23
Selection of awards and distinctions 2010
iBRE platform - the winner in five categories of prestigious international contest „World Best Internet Banks 2010” run by Global Finance magazine:
Best Corporate/Institutional Internet
Bank Central & Eastern Europe
Best Corporate/Institutional Internet
Bank Poland
Best Integrated Corporate Bank Site
Central & Eastern Europe
Best Consumer Internet Bank - mBank
Czech Republic
Best Integrated Consumer Bank Site –
mBank and Multibank Central &
Eastern Europe