BRE Bank maintains a high stable income level: PLN 724.1 million in Q3PLN 72.5 million of net profitCost discipline: the cost/income ratio fell to 51.5%Provisions: the responsible approach - problem of FX options solvedQ4 will see higher planned costs but with effective use of the PZU dividendMaintained High Income Level
BRE Bank closed Q3 with a net profit of PLN 72.5 million compared to the loss of PLN 61.6 million in Q2. The income level improved despite difficult market conditions: income totalled PLN 724.1 million in Q3 compared to PLN 714.8 million after Q2.
High Net Interest and Commission Income
The net interest income (PLN 412 million) improved by 13% year on year (but it was down by 4.5 % quarter on quarter). “The net interest margin remained stable. It is an effect of our conservative approach,” said Mariusz Grendowicz, the CEO of BRE Bank.The net commission income (PLN 163 million) improved by 20% year on year (and by 2.9% quarter on quarter). It was largely driven by the growing number of payment card transactions. “The cross-selling ratio improved considerably as a result of the BREnova project,” said Mariusz Grendowicz.
The Bank’s results included a one-off transaction in Q3: the profit on investment securities grew by PLN 20 million due to the sale of land by BRE.locum, our subsidiary.
Costs under Control
“BRE Bank is an increasingly effective organisation. Our cost/income ratio fell to 51.5% after Q3,” said the CEO of BRE Bank. He added that administrative costs fell by 2.5% year on year. Another success is the reduction of personnel costs by almost 17% year on year. “The difficult HR decisions made earlier this year have produced tangible results today,” said Mariusz Grendowicz. He added that BRE was so far an exception on the market as it created employee bonus provisions this year.Marketing expenses grew (by 4% year on year) driven by previously planned spending on marketing campaigns. “Due to seasonal expenses, Q4 will be more difficult. But we will also book ca PLN 90 million of the PZU dividend in Q4. We will not use the dividend to the Bank’s profit on a one-off basis but use it rather to reduce future costs,” explained Mariusz Grendowicz.
Provisions: The Responsible Approach
“We can openly say that the problem of provisions related to FX options is over. We announced this in mid-2009. Thanks to the responsible approach to the issue, the net provisions for derivative instruments were positive at PLN 7 million in Q3. Naturally, there can still be individual cases, yet we will not see provisions on the same scale as in the last quarters,” said BRE Bank’s CEO. The portfolio of cash loans sold to non-BRE clients remains of key importance in retail banking (the provisions of the segment totalled PLN 126 million, down by 0.3% QoQ). But this was only one product (out of several hundred products offered by the Bank) which we withdrew quickly and admitted that we made a mistake.
Growing Deposit Base
BRE Bank’s deposit base grew by 1.5% in Q3. Retail deposits alone grew by PLN 1.2 billion quarter on quarter. “It was a growth by 5.7%, while the entire sector grew by 0.5%,” said Mariusz Grendowicz. The loan portfolio of BRE Bank decreased by 3.5 %, yet taking into account the effect of PLN appreciation, the decrease was 0.8%.
Clients trust us
The number of clients grew considerably in Q3. BRE Bank’s retail banking serves 3.1 million clients. The trust in BRE Bank is reflected by received awards: mBank was named “The Best Bank for SMEs” by Forbes, MultiBank was awarded in the “Newsweek Friendly Bank ranking” and BRE Bank was named “The Leader of Polish Transition” by Forbes. A recent poll by Homo Homini demonstrates that mBank has been spontaneously indicated by Poles as one of the most trusted banks next to the market’s biggest players: PKO BP and Pekao SA.
GDP +1.5 %
According to the forecast of Ryszard Petru, BRE Bank’s Chief Economist, Poland’s GDP will grow by 1.5% in 2009 and inflation will fall in 2010. The NPL ratio will remain low, although it will increase insignificantly due to growing unemployment.
While BRE Bank carries out the policy of high credit risk provision, the Bank maintains a high income level; which, combined with cost optimisation, makes BRE Bank one of the most effective financial institutions. BRE is a reliable and safe institution: our capital adequacy ratio has remained stable above 10%.
BRE Bank closed Q3 with a net profit of PLN 72.5 million compared to the loss of PLN 61.6 million in Q2. The income level improved despite difficult market conditions: income totalled PLN 724.1 million in Q3 compared to PLN 714.8 million after Q2.
High Net Interest and Commission Income
The net interest income (PLN 412 million) improved by 13% year on year (but it was down by 4.5 % quarter on quarter). “The net interest margin remained stable. It is an effect of our conservative approach,” said Mariusz Grendowicz, the CEO of BRE Bank.The net commission income (PLN 163 million) improved by 20% year on year (and by 2.9% quarter on quarter). It was largely driven by the growing number of payment card transactions. “The cross-selling ratio improved considerably as a result of the BREnova project,” said Mariusz Grendowicz.
The Bank’s results included a one-off transaction in Q3: the profit on investment securities grew by PLN 20 million due to the sale of land by BRE.locum, our subsidiary.
Costs under Control
“BRE Bank is an increasingly effective organisation. Our cost/income ratio fell to 51.5% after Q3,” said the CEO of BRE Bank. He added that administrative costs fell by 2.5% year on year. Another success is the reduction of personnel costs by almost 17% year on year. “The difficult HR decisions made earlier this year have produced tangible results today,” said Mariusz Grendowicz. He added that BRE was so far an exception on the market as it created employee bonus provisions this year.Marketing expenses grew (by 4% year on year) driven by previously planned spending on marketing campaigns. “Due to seasonal expenses, Q4 will be more difficult. But we will also book ca PLN 90 million of the PZU dividend in Q4. We will not use the dividend to the Bank’s profit on a one-off basis but use it rather to reduce future costs,” explained Mariusz Grendowicz.
Provisions: The Responsible Approach
“We can openly say that the problem of provisions related to FX options is over. We announced this in mid-2009. Thanks to the responsible approach to the issue, the net provisions for derivative instruments were positive at PLN 7 million in Q3. Naturally, there can still be individual cases, yet we will not see provisions on the same scale as in the last quarters,” said BRE Bank’s CEO. The portfolio of cash loans sold to non-BRE clients remains of key importance in retail banking (the provisions of the segment totalled PLN 126 million, down by 0.3% QoQ). But this was only one product (out of several hundred products offered by the Bank) which we withdrew quickly and admitted that we made a mistake.
Growing Deposit Base
BRE Bank’s deposit base grew by 1.5% in Q3. Retail deposits alone grew by PLN 1.2 billion quarter on quarter. “It was a growth by 5.7%, while the entire sector grew by 0.5%,” said Mariusz Grendowicz. The loan portfolio of BRE Bank decreased by 3.5 %, yet taking into account the effect of PLN appreciation, the decrease was 0.8%.
Clients trust us
The number of clients grew considerably in Q3. BRE Bank’s retail banking serves 3.1 million clients. The trust in BRE Bank is reflected by received awards: mBank was named “The Best Bank for SMEs” by Forbes, MultiBank was awarded in the “Newsweek Friendly Bank ranking” and BRE Bank was named “The Leader of Polish Transition” by Forbes. A recent poll by Homo Homini demonstrates that mBank has been spontaneously indicated by Poles as one of the most trusted banks next to the market’s biggest players: PKO BP and Pekao SA.
GDP +1.5 %
According to the forecast of Ryszard Petru, BRE Bank’s Chief Economist, Poland’s GDP will grow by 1.5% in 2009 and inflation will fall in 2010. The NPL ratio will remain low, although it will increase insignificantly due to growing unemployment.
While BRE Bank carries out the policy of high credit risk provision, the Bank maintains a high income level; which, combined with cost optimisation, makes BRE Bank one of the most effective financial institutions. BRE is a reliable and safe institution: our capital adequacy ratio has remained stable above 10%.
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