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FIRST INVESTMENT BANK Q1, 2019
CONFIDENTIAL
2CONFIDENTIAL
Table of contents
Section 1 Macro environment 3
Section 2 Banking system overview 10
Section 3 Fibank profile 15
Section 4 2018 Q4 Results and profitability 27
Section 5 Management and corporate governance 36
Section 6 Capitalization & leverage 39
Section 7 Funding and liquidity 44
Section 8 Appendix 47
3
MACROENVIRONMENT
SECTION 1
4CONFIDENTIAL
Country profile
Source: National Statistical Institute, Bulgarian National Bank, Ministry of Finance
• Full name: Republic of Bulgaria• Memberships: European Union (since 2007),
NATO (since 2004)• Population: 7.2 M• Capital: Sofia• Area: 110,994 sq km (42,855 sq miles)• Official language: Bulgarian• Traditional religion: Orthodox Christianity• Monetary unit: Bulgarian Lev (plural: Levs,
code: BGN)• A currency board arrangement was established
in 1997 through the Bulgarian National Bank Act.• Fixed Exchange rate: EUR 1 = BGN 1.95583
(BGN 1 EUR 0.51)• Main tax rates:
• corporate tax rate of 10%;• personal income tax rate of 10%;• Value Added Tax Act (VAT) rate of 20%;
• Main exports: Ferrous and non-ferrousmetals, petrol products, foods and drinks,textiles, machines and equipment
• Payment Systems: RINGS, TARGET2 BNB, BISERA, BISERA7EUR, BORICA, SEPA, ESROT, CENTRAL DEPOSITARY
FRANCE
SPAIN
SWITZ.
ITALY
ANDORRA
PORTUGAL
MONACO
Madrid
Lisbon
Rabat
Gibraltar (U.K.)Algiers
Balearic
Islands
MOROCCO
TUNISIA
MALTATunis
Tripoli
Cairo
Valletta
LEBANON
ISRAEL
CYPRUS
IRAQ
SYRIANicosia
Beirut
Damascus
AmmanTel Aviv-Yafo
JORDAN
TURKEY
Crete
COMMONWEALTH OF
INDEPENDENT STATES
ROMANIA
BULGARIA
HUNGARY
Sofia
GREECE
AUSTRIA
ALB.
SLOVENIA
CROATIA
BOSNIA-
HERZEGOVINASERBIA
KOS.
MACE-DONIA
MONT.
Mediterranean Sea
ALGERIA
LIBYA EGYPT
SAUDI ARABIA
Red
Sea
BLACKSEA
Bulgarian economy had strong results over past few years with high growth and low unemployment
KEY DRIVERS OF THE BULGARIANECONOMY
INFLATION & UNEMPLOYMENT DECREASED SINCE 2012
HICP & Unemployment(%, 2012-2018)
BULGARIAN GDP
GROWTH ABOVE EU
AVERAGE
GDP real growth(%, 2012-2018)
Source: International Monetary Fund; European Commission; Bulgarian Ministry of Finance; National Statistical Institute; Bulgarian National Bank
CONFIDENTIAL
5
2.3%
20182018
3.1
• In q1, 2019, the country's economyreported a real annual growth rate of 3.5%for the period (2011: 3.1%), influenced bythe improving external environment on aglobal scale, as well as the growingeconomic activity in the countries of theEuropean Union. The main driver of theeconomy was private consumption growingby 4.5% for Q1 (2018: 5%), due to higherinternal demand and positive dynamics inthe labor market;
• The unemployment rate declined to4.5% at the end of q1 2019, driven byemployment in trade, agriculture,hospitality industry and education;
• The current account remained positive,at the amount of BGN 654.3 М, or 1,1% ofGDP in q1, 2019.
3.5
q1, 2019q1, 2019
2.8%
Going forward, the economy is expected to continue strong growth anywhere between ~3-4% p.a.
KEY DRIVERS OF THE BULGARIAN ECONOMY
• Future GDP growth is hoveringaround 3-4% being driven by strongnet exports and privateconsumption. The positive outlook isalso supported by expectedacceleration of EU fundsabsorption
6
• Unemployment rate is expected tocontinue the decline from previousyears, but at a lower pace. The trendis driven by the recovery in domesticdemand
• The inflation rate is expected togradually increase to 1.8% in 2021due to strong domestic demand, higherprices for utilities and recovering energyprices
UNEMPLOYMENT EXPECTED TO FURTHER DECREASE & INFLATION TO INCREASE
HICP & Unemployment(%, 2016-2021F)
GDP GROWTH EXPECTED TO CONTINUE AT
ATTRACTIVE LEVELS
GDP real growth(%, 2016-2021F)
Source: International Monetary Fund; European Commission; Economist Intelligence Unit; Bulgarian Ministry of Finance
CONFIDENTIAL
7CONFIDENTIAL
Bulgarian Economic Overview
Growth of Real GDP, Consumption and Investments
Macroeconomic indicators 2013 2014 2015 2016 2017 2018 q1, 2019
GDPEUR M 42, 010 42, 824 45, 288 48, 128 51, 662 55, 181 12, 606
Growth, % 0.9 1.8 3.5 3.9 3.8 3.1 3.5
Current accountEUR M 535.6 530.6 (15.4) 1,244.0 1, 578,2 2,547.5 654.3
% of GDP 1.3 0.1 0.0 2.6 3.1 4.6 1.1
FDIEUR M 1, 384 347 2, 399 1, 003 2, 314 1, 744 (254.4)
% of GDP 3.3 0.8 5.3 2.1 4.5 3.2 (0.4)
Budget deficit/ surplus % of GDP (0.4) (5.4) (1.7) 0.2 1.1 1.0
Bulgaria Current Ratings
Source: Bulgarian National Bank, National Statistical Institute, Ministry of Finance
Date Outlook Rating
26 May 2017 Stable Baa2
30 November 2018 Positive BBB-
16 November 2018 Stable BBB
8CONFIDENTIAL
Macro environment: Key indicators historic development
Indicators 2013 2014 2015 2016 2017 2018 q1, 2019
Gross domestic product (BGN million) 82,166 83,634 88,571 94,130 98,361 107, 925 24, 656
Gross domestic product, real growth (%) 0.9 1.3 3.6 3.9 3.6 3.1 3.5
- Consumption, real growth (%) (1.9) 2.2 3.8 3.3 4.5 5.0 4.5- Gross fixed capital formation, real
growth (%)0.3 3.4 2.7 (6.6) 3.8 10.2 2.5
Export (% of GDP) 50.5 49.2 48.4 48.0 52.2 49.6 68.0
Inflation at period-end (%) (1.6) (0.9) (0.4) 0.1 2.8 2.7 3.6
Average annual inflation (%) 0.9 (1.4) (0.1) (0.8) 2.1 2.8 3.1
Unemployment (%) 11.8 10.7 10.0 8.0 7.1 6.1 5.0
Current account (% of GDP) 1.3 1.2 0.0 2.6 6.7 4.6 1.1
Trade balance (% of GDP) (7.0) (6.5) (5.8) (2.0) (1.5) (4.1) (0.4)Foreign exchange reserves of BNB (EUR
million)14,426 16,534 20,285 23,899 23,662 23,510 25,027
Foreign direct investments (% of GDP) 3.3 0.8 5.3 2.1 4.5 3.2 (0.4)
Gross external debt (% of GDP) 87.9 91.9 74.0 71.1 65.5 60.4 57.1
Public debt (% of GDP) 9.7 15.3 13.2 15.0 12.3 11.1 10.2
Consolidated budget balance (% of GDP) (1.8) (3.7) (2.8) 1.6 0.8 -
Exchange rate of USD (BGN for USD 1) 1.42 1.61 1.79 1.86 1.63 1.71 1.74
Source: National Statistical Institute, Bulgarian National Bank, Ministry of Finance
9CONFIDENTIAL
Mid-term macro forecast
Spring forecast 2019, Ministry of Finance
2017 2018 2019F 2020F
GDP real growth, % 3.6 3.1 3.9 3.9
- consumption 4.3 5.0 4.3 4.0
- investment 3.4 6.6 4.9 5.9
- exports 6.1 1.4 5.9 6.0
- imports 6.5 1.6 6.8 6.9
Unemployment, % 6.5 6.1 5.9 5.6
Average HICP, % 1.1 2.3 1.7 1.8
Current account, % of GDP
4.8 4.6 4.2 4.1
Trade balance, % of GDP
-1.5 -4.1 -2.8 -3.0
FDI, % of GDP 4.5 3.2 2.1 2.2
M3 aggregate 6.3 6.5 6.6 6.8
Loans to corporates 3.8 5.2 6.9 6.9
Loans to individuals 6.3 14.1 5.8 6.1
MACRO ASSUMPTIONS2018-2020F
FAVOURABLE MACRO ENVIRONMENT IN THE MID TERM (2018-2020F)
▪ Positive assumptions of the economic development during the period 2018-2020;
▪ Stable growth in GDP to slow down in 2018 & then to gradually increase exceeding 3% y/o/y;
▪ The consumption will accelerate its growth up to 4.0% y/o/y until 2020;
▪ The growth in exports will reach 6.0% y/o/y in 2020;
▪ FDI are expected to remain stable around 2.2% of GDP;
▪ Full production capacity in the business;
▪ Additional increase in the share of goods with a high value added;
▪ Recovery of the labour market;
▪ Reduction in unemployment rate down to 5.6% in 2020;
▪ Strong fiscal position;
▪ Increased activity on the real estate market of residential and office space;
▪ Augmentation of public investments;
▪ Acceleration in the absorption of EU funds;
▪ Expected completion of important infrastructure projects.
10
BANKING SECTOR OVERVIEW
SECTION 2
11CONFIDENTIAL
Sector prospects: gradual increase in loan demand, on-going consolidation & new upward interest rate cycle.
BNB FORECAST 2018-19
Annual rate of change 2018 2019f
Claims on non-government sector 4.9% 5.6%
- claims on non-financial corporations 4.6% 6.1%
- claims on households 5.2% 4.3%
Deposits of the non-government sector 6.8% 7.2%
▪ In the 2018–2019 period funds attracted from the non-government sector in the banking system are expected to grow further, though at lower than the average 2016 rates, driven by the projected acceleration of private consumption and, correspondingly, by a slight decrease in the savings rate, as well as by the expectations of comparatively strong demand for currency in circulation. The expectations of retaining deposit rates at the attained low levels will also contribute to the foreseen trends regarding funds attracted from corporations and households in the banking system.
▪ The recovery of private consumption and investment amid relatively low lending rates will be a factor stimulating demand for loans from the non-government sector. Progressively improving economic activity is also expected to be a factor behind banks’ increasing lending risk appetite. The expectations of gradually accelerating credit growth correspond to the assumption of retaining positive trends in new loans to the private sector which have occurred since the second quarter of 2016.
Source: BNB Economic Review 4/2018
NET PROFIT
TOTALDEPOSITS
TOTALLOANS
Loans,BGNb
53,6
57,757,8
+0.2%
+7.7%
78,484,6 85,9
Deposits,BGNb
+1.6%+7.9%
Net profit,BGNM
Net profit
288
309-7%
+15.7%
267
12
Current Status of the Bank System
Banking Sector as at 31 March 2019
у/oy 2013 2014 2015 2016 2017 2018 q1, 2019
Bank system assets, BGN M 85 747 85 135 87 524 92 095 97 807 105 557 108 347Growth of assets in the bank system,% 4.0 (0.7) 2.8 5.2 6.2 7.9 10.9
Bank system profit, BGN M 584.9 746.3 898.4 1 262.3 1 174.0 1 678 309
Profit growth, %, y/oy 3.2 27.6 20.4 40.5 (7.0) 42.9 15.7
Bank system deposits, BGN M 62 230 63 710 69 276 74 129 78 405 84 571 85 922
Growth of deposits, % 8.7 2.4 8.7 7.0 5.8 7.9 9.3
Bank system loans, BGN M 57 376 54 158 52 256 52 442 53 553 57 688 58 569
Growth of loans, % 0.9 (5.6) (3.5) (1.8) 2.1 7.7 7.6
Capital adequacy, % 16.85 21.95 22.18 22.15 22.08 20.01 20.38
Liquidity, % 27.1 30.12 36.71 38.24 38.97 - -
In the period December 2018 – March 2019, the
dynamics of processes in the banking system
was impacted by the increase in assets, deposits
and loans.
Source: Bulgarian National Bank, March 2019
12
13
Fibank and the Bulgarian Banking System
in BGN M December 2018 March 2019 Growth, %
AssetsBanking system 105,557 108,247 2.5%
Fibank 9,312 9,322 0.1%
Deposits (other than from credit institution)
Banking system 84,571 85,922 1.6%
Fibank 8,095 8,204 1.4%
Deposit of individuals and households
Banking system 53,383 54,282 1.7%
Fibank 6,393 6,447 0.8%
Loans to non-banksBanking system 57,688 58,569 1.5%
Fibank 6,167 6,225 0.9%
Consumer loansBanking system 10,333 10,545 2.1%
Fibank 958 992 3.6%
Mortgage loansBanking system 10,906 11,264 3.3%
Fibank 728 762 4.6%
Company loansBanking system 34,871 35,377 1.4%
Fibank 4,469 4,459 -0.2%
in BGN M March 2018 March 2019 Growth
ProfitBanking system 267 309 15.7%
Fibank 22 16 -27.7%
Fibank and the Banking Sector as at 31 March 2019
Source: Bulgarian National Bank, December 2018 and March 2019
13
14
The banking sector: 25 banks & foreign branches operated in the country. Fibank in Top5 banks at March 2019.
TOTAL ASSETS(Q1’19, BGNm)
MARKET SHARE (Q1’19%)
Citi Bank Europe- Sofia Branch
890.4 0.82%
ING Bank N.V., Sofia Branch 873.9 0.81%
Paribas S.A., Sofia Branch 862.8 0.80%
Paribas Personal Finance S.A., Bulgaria Branch
632.2 0.58%
T.C. Ziraat Bank, Sofia Branch
316.6 0.29%
GROUP 3: FOREIGN BRANCHES
GROUP 2: OTHER BANKSGROUP 1: TOP 5 BANKS
TOTAL ASSETS(Q1’19, BGNm)
MARKET SHARE (Q1’19%)
UniCredit Bulbank 20,144.4 18.6%
DSK Bank (OTP) 15,110.4 14.0%
United Bulgarian Bank (KBC) 11,586.0 10.7%
First Investment Bank 9,321.6 8.6%
Eurobank Bulgaria 8,525.8 7.9%
TOTAL ASSETS(Q1’19, BGNm)
MARKET SHARE (Q1’19%)
Raiffeisenbank Bulgaria 7,907.4 7.30%
Expressbank (OTP) 6,391.0 5.90%
Central Cooperative Bank 5,726.9 5.29%
Piraeus Bank 2,904.2 2.68%
Bulgarian Development Bank 2,895.8 2.68%
Allianz Bank 2,797.6 2.58%
ProCredit Bank 2,211.4 2.04%
Municipal Bank 2,044.0 1.89%
Investbank 2,022.8 1.87%
International Asset Bank 1,502.7 1.39%
BACB 1,438.7 1.33%
D Commerce Bank 860.0 0.79%
TBI Bank 774.4 0.72%
Tokuda Bank 395.1 0.37%
Texim Bank 316.6 0.29%
▪ Fibank is the largest Bulgarian-owned bank ▪ Fibank is the fourth largest overall, systemically important
to the Bulgarian banking system
14
15
FIBANK PROFILE
SECTION 3
16CONFIDENTIAL
Fibank aspires to be one of the best banks in Bulgaria, recognized as innovative & customer-oriented bank
BUSINESS MODEL IN LINE WITH BANK MISSION
VISION AHEAD TO GROW FORWARD IN
RETAIL & SME
STRONG COMPETITIVE ADVANTAGES SUPPORTIVE
TO OUTPACE PEERS
First-class customer service
Flexibility in decision
making
Deep knowledge
of the market
Solid market
positions
Wide branch
network
High professional standards
Well recognized
brand
▪ Fibank aspires to be among the best banks in Bulgaria, recognized as a steadily growing, innovative, client-oriented bank, offering outstanding products and services.
▪ Fibank aims to ensure excellent careers for its employees & social contribution to the community.
▪ The Bank seeks to continue to develop high-technological solutions providing its customers with opportunities for banking from any place at any time.
▪ Emphasis on mortgage & consumer lending, the card business & innovative payment solutions in line with client needs & digital trends in banking business
RETAIL BANKING
▪ Strong focus on products & services to micro, small & medium enterprises (SME), with flexible approach and knowledge of the market & local specifics
COMMERCIAL BANKING
▪ Continue to develop model in line with the best corporate governance & risk mgmt. standards in banking industry
BEST STANDARDS
1
2
3
CONFIDENTIAL
Fibank Launches its Smart Lady
Program Aimed at Women in
Business; Fibankwon second place
in the Offering Innovation
category of the Efma-Accenture
DMI Awards 2018
17
2000Assets:
€173m
2005Assets:
€1.3bn
2010Assets:
€2.6bn
2012Assets:
€3.6bn
2018Assets:
€4.8bn
Fibank was established
1993 1997 1999 2000 2005 2007 2010 2013 2015
Fibank was established
EBRD became a shareholder in Fibank with 20% stake.
Sold its shares in 2005.
Fibank Albania
established as a branch.
Grew into a separate
100%-owned entity,
licensed by BoA in 2007
Fibank started developing its retail banking. Retail deposits grew 2.3 fold.
Fibank issued EUR200m
Eurobonds. First in
Bulgaria to issue
perpetual tier 2 bonds
Fibank realized
the biggest banking IPO in
Bulgaria.
1998-2008: Fibank attracted > EUR800m on
international debt markets
Fibank welcomed
its one millionth
client
2011-2013: First in
Bulgaria to issue Basel 3
compliant tier 1 bonds
totaling EUR100m
Fibank acquired MKB Unionbank in a EUR 24m, 0.25x P/B
deal
Joint project with the IFC for
enhancing corporate governance & risk mgmt.
2016
Fibank is among the first banks in Bulgaria to implement new chip
technology (EMV) in issuing debit & credit cards
Fibank was the first bank in Bulgaria to
offer contact-less payments
based on PayPass (NFC)
technology
Fibank first in the Balkans launched an innovative
platform for digital payments
via mobile devices, with contactless
(NFC) function.
2018
Fibankcredit ratings were
upgraded by Fitch and
Moody's
Top 3 Player: 25 years of stable development with focus on innovation and customer experience
2017
Fibank is top 4 player in assets, loans and deposits at March 2019. Committed to innovation & product leadership
LOANS DEPOSITSTOTAL ASSETS
4
3
4
Market share (Q1/19 & 2018) Market share (Q1/19 & 2018) Market share (Q1/19 & 2018)
18
Increased market shares in consumer loans & retail deposits at March 2019 as part of long-term strategy.
CONSUMERLOANS
MORTGAGELOANS
RETAILDEPOSITS
CORPORATE LOANS
3
5
6
2
19
Market share (Q1/19 & 2018) Market share (Q1/19 & 2018) Market share (Q1/19 & 2018) Market share (Q1/19 & 2018)
20CONFIDENTIAL
Fibank with diverse and stable business model. Business mix weighted towards traditional banking.
▪ Limited presence
▪ Traditional banking products and services
▪ Focus on retail & SME clients
BUSINESSMIX
RETAILBANKING
COMMERCIALBANKING
FOREIGNOPERATIONS
CYPRUS
ALBANIA
Mortgage lending
Card business
Consumer lending
Dep
osit
an
d s
avin
gs p
ro
du
cts
Paym
en
t servic
es,
е-b
an
kin
g
Priv
ate
ban
kin
g,
Go
ld &
co
ins
In
vestm
en
t &
dep
osit
ory s
ervic
es
Factoring
Microlending
Corporate lending
SME lending
Trade financing
Project financing
EU programs financing
▪ Retail banking
▪ Corporate banking
▪ SME lending
▪ Microlending
▪ Card payments
▪ E-banking
▪ Private banking
▪ Trade financing
▪ Project financing
▪ Factoring
▪ EU programs financing
▪ Deposit & savings
▪ Payment services
▪ Money and capital markets
▪ Foreign exchange
▪ Investment gold
▪ Package programs
UNIVERSAL & TRADITIONAL
BANKING
251
254
260
267
269
2015 2016 2017 2018 q1, 2019
Number of customers withloan products, thousands
Total number of customers,thousands
21CONFIDENTIAL
Fibank customer profile: 91% retail customers, 62% in 25-55 age group. Strong potential for cross selling
CUSTOMERS GREW 1.36% DURING 2018
TO REACH 1.190M
22.4% OF RETAIL CLIENTS WITH LOAN PRODUCTS. CROSS SALE POTENTIAL
YOUNG & WELL-BALANCED CUSTOMER
PROFILE
+0.75%
1.141
1.160
1.174
1.1901.193
2015 2016 2017 2018 q1,
2019
Source: Unconsolidated data, March 2019
+0.25%
DEPOSIT PRODUCTS
PAYMENT SERVICES
PACKAGE PROGRAMS
DEBIT & CREDIT CARDS
DINERS CLUB CARDS
MORTGAGE LOANS
CONSUMER LOANS
BUSINESS LOANS
TRADE FINANCING
PROJECT FINANCING
FACTORING
EU FINANCING
E-BANKING
INVESTMENT SERVICES
GOLD & COINS
22CONFIDENTIAL
Distribution platform: Country-wide branch network with 154 locations in Bulgaria & 10 abroad (Cyprus & Albania)
MAP OF BRANCHES
2018 Sofia Country Total
Branches 52 102 154
ATMs 154 484 638
POS 5 738 4 755 10 493
ATM&POS 5 892 5 239 11 131
Grand total 5 944 5 341 11 285
NETWORK IN BULGARIA
FULL RANGE OF SERVICES CYPRUS BRANCH
▪ Fibank Cyprus branch has operated since 1997, initially mainly in the area of corporate banking. Over the years, it systematically and consistently expanded its products and services.
▪ Currently, the branch offers standard credit and savings products, payment services and e-banking, with a strategic focus on retail & SMEs customers.
FIBANK ALBANIABRANCH NETWORK
2018 Total
Head Office 1
Branches 10
Total 11
ATMs 29
Grand total 40
▪ Much of the branch network operates with extended working hours, as well as at weekends.
RETAILCLIENTS
BUSINESS CLIENTS
CONFIDENTIAL 23
MULTI-CHANNEL DISTRIBUTION NETWORK
PHYSICAL DISTRIBUTION
CHANNELS
REMOTE DISTRIBUTION
CHANNELS
Branch network
Direct sales
Remote channels
Integrated platform for electronic banking
My Fibank
Physical channels
ATMnetwork
POSnetwork
Corporate blogContact
center
▪ Branch network is the main channel for distribution of bank products & services.
▪ Fibank maintains a country-wide branch network with 154 locations in Bulgaria & 10 abroad.
▪ Further focus on optimization & increase efficiency of the branch network.
▪ Strong network of ATM & POS devices places Fibank among the market leaders
▪ Direct sales to corp.& institutional clients
▪ New integrated e-platform for digital banking featuring:
➢ E-banking
➢ Mobile banking
➢ Utility payments
➢ E-statements
▪ New opportunity to apply for consumer loan via Contact center. In 2016, over 25 campaigns carried out; 150’000 outgoing calls with 75% respondents reached.
▪ Corporate blog functioning since 2008 to test client’s satisfaction on Bank products & servicesCorporate
website
Online store for gold products
Multi-channel distribution network with adequate balance between physical locations & remote banking channels
24CONFIDENTIAL
Group structure: Clear strategic focus on business in Bulgaria
FIRST INVESTMENT BANK AD
Companies in the financial sector
• First Investment Bank – Albania Sh.a.
• Diners Club Bulgaria AD
• Fi Health Insurance AD
Ancillary services companies
• First Investment Finance B.V.
• Balkan Financial Services EAD
• Turnaround Management EOOD
• Creative Investment EOOD
• Lega Solutions EOOD
• AMC ImotiEOOD
• Debita OOD
• Realtor OOD
Subsidiary companies
Parent company
CORPORATE GROUP STRUCTURE
3 KEY SUBSIDIARIES IN FINANCIAL SECTOR
▪ Replication of the successful business model in Bulgaria & its adaptation to the Albanian banking market through a subsidiary bank in Albania with limited presence and focus on retail & SME business.
▪ Further develop the strategic focus on the card business through promoting and consistently increasing penetration of the Diners Club brand in the local market in Bulgaria by offering new services for cardholders, and expanding the network of POS terminals accepting payments with Diners Club cards.
▪ Offering of insurance products & services in line with license of FiHealth Insurance for attracting new customers in the retail & SME segments.
SHAREHOLDERS’ STRUCTURE
25CONFIDENTIAL
Key subsidiaries: Sound performance & results in 2018, growing contributors to Group profit
FIRST INVESTMENT BANK - ALBANIA
DINERS CLUB BULGARIA
FIHEALTHINSURANCE
BGNm 2017 2018 %
Total income 16 17.9 11.9%
Net profit 6 7.1 18.3%
Loans 140 186.6 33.3%
Total assets 309 391 26.5%
Deposits 253 330 30.4%
Equity 39
BGNm 2017 2016 %
Total income 2.6 2.3 13%
Net profit 0.3 0.2 32%
Loans 10.5 9.1 15%
Total assets 12.1 11.2 8%
Overdraft 9.0 8.3 9%
Equity 2.4 2.1 14%
BGNm 2017 2018 %
Total income 4.5 5.5 22.2%
Net profit 0.1 0.3 200%
Finan.assets 4.9 5.5 12.2%
Receivables 2.4 3.0 25.0%
Total assets 8.7 9.6 10.3%
Equity 5.8 6.1 5.2%
▪ In 2018, First Investment Bank –Albania Sh.a. reported positive financialresults and sustainable developmentwhile maintaining high standards of riskmanagement and customer-orientedapproach.
▪ The Bank maintained strong liquidityand capital positions, its capitaladequacy ratio at year-end amountingto 17.36% against a minimum requiredlevel of 12% according to the applicableregulatory requirements in the country
▪ For 2017 the company reported a netprofit of BGN 264 thousand, comparedto BGN 179 thousand a year earlier.
▪ The company’s assets increased by8.3% to BGN 12,106 thousand (2016:BGN 11,177 thousand), mainly due toan increase in receivables fromcustomers which amounted to BGN10,357 thousand or 14.0% more thanat the end of 2016 (BGN 9,086thousand). Loans and advances toindividuals formed 98.7% of allreceivables from customers (2016:98.7%).
▪ In 2017, Fi Health Insurance increasedthe amount of the premium income toBGN 4,457 thousand, compared to BGN3,266 thousand in 2016.
▪ The company’s assets grew by 12%, toBGN 8,722 thousand at year-end(2016: BGN 7,788 thousand), driven bythe increase in financial assets (2017:BGN 4,945 thousand; 2016: BGN 4,476thousand), which mainly comprise bankdeposits and Bulgarian governmentsecurities.
26CONFIDENTIAL
Recent awards confirmed Fibank’s successful development & strong focus on innovation & digitalization
EFMA-ACCENTURE DMI AWARDS 2018 2 AWARDS ON
DIGITAL CARDSBANK OF THE
YEAR AWARDSEUROMONEY
AWARDS
▪ Fibank won second place inthe Offering Innovationcategory of the Efma-Accenture DMI Awards 2018,which brought together someof the world's most renownedinstitutions and companies inthe retail segment. The Efmaorganizers and anauthoritative international juryhighly appreciated Fibank'sinnovation, launched for thefirst time in the Bulgarianmarket: a microchip forchildren and teenager debitcards, as well as the Bank'searly financial educationprogram.
▪ In April 2019 Fibank was awarded on “Product of the year” for Smart Lady program.
▪ Fibank received the first award for its digital cards, enabling clients to pay easy, secure and fast through their NFC phone.
▪ A Second award on digital cards was received on the Webitinnovation & technology festival, organized in Sofia in 2017.
▪ Fibank has won for 7 times the award for “Bank of the Client in the competition “Bank of the Year”
Best Bank in Bulgaria by the financial magazine Euromoney
27
RESULTS & PROFITABILITY
SECTION 4
28CONFIDENTIAL
Fibank with BGN 19,4m net profit in Q1,2019, used as a strong tool for internal capital generation.
FINANCIAL HIGHLIGHTS 2017Income statement, BGNth
2016 2017 2018 Q1,2019
Net interest income 319,179 260,926 267,088 63,262
Net fee & commission income 91,486 102,146 97,111 23,652
Net trading income 13,937 15,326 10,809 4,179
Other operating income 40,115 28,191 16,321 5,426
Total operating income 464,717 406,589 391,329 96,519
Administrative expenses (192,307) 204,698 (212,066) (54,999)
Impairment (156,120) 78,850 (83,378) (13,001)
Other income/(expenses), net (6,177) 20,431 65,127 (6,551)
Group profit after tax 98,811 92,210 171,546 19,431
Balance-sheet indicators, BGNth
2016 2017 2018 Q1,2019
Cash & balances with central banks 1,639,888 1,478,594 1,674,754 1,759,781
Portfolio of financial instruments 891,835 803,999 802,321 743,596
Loans & advances to customers 5,044,850 5,162,907 5,716,062 5,864,366
Repossessed assets 1,034,501 984,448 812,934 808,921
Investment property 222,267 218,212 242,558 242,558
Total assets 9,089,855 8,921,198 9,586,681 9,704,250
Customer deposits 7,911,911 7,583,819 8,342,691 8,475,867
Ministry of Finance deposit - - - -
Other borrowed funds 70,367 127,493 121,120 114,823
Perpetual debt - - - -
Hybrid debt 208,740 208,786 208,786 214,428
Total Group equity 856,836 947,350 846,272 866,503
1
2
3
4
7
8
For q1 net interest income amounted to BGN 63,262thousand or 3.4% less than the previous year (2018: BGN267,088 thousand), and remained a major source ofincome for the Group, constituting 65.5% of totaloperating income (2018: 68.2%).
Net trading & other income generated additional BGN4.2M to the total operating income for the period
Total operating income stood at BGN 96,5M (YE18: BGN391,3M).
. Impairment charges decreased further to BGN (13 M)vs. BGN 22,7M y/o/y, with the Bank’s cost of risk down to1.4% for 2017. Asset quality metrics improved & riskprofile enhancement efforts furthered in line with settargets.
Group profit after tax decreases to BGN 19,4M for thefirst three months of 2019 (YE18: BGN 171,6M), supportedby improving macro environment & related positivedynamics in loan loss provisions.
Improved market shares in consumer loans (9.4%, fifthplace) and mortgage (6.8%, sixth place) loans.
Total assets were BGN 9,704M (YE18: €9,587M) in linewith projections & efforts to reduce excess liquidity.
As at q1,2019 attracted funds comprised BGN 8,476Mcustomer deposits, BGN 115M other borrowed funds &BGN 214M hybrid debt, qualified as AT1.
2
3
4
6
7
6
8
1
5
5
29CONFIDENTIAL
Fibank with sound financial indicators. Improved profitability & coverage ratios due to conservative policy
FINANCIAL HIGHLIGHTS 2018Key ratios, % 2016 2017 2018 Q1, 2019
CET1 ratio 12.01 12.87 13.3 12.66
T1 capital ratio 15.1 15.87 16.15 15.46
Total Capital adequacy ratio 15.13 15.89 16.15 15.46
Leverage ratio 10.11 11.28 11.11 10.7
Group equity/total assets 9.43 10.62 8.83 8.93
Liquid assets ratio 28.12 24.78 25.48 24.34
Liquid assets/customer deposits 29.12 25.91 26.50 25.30
LCR 327.37 334.85 269.21 238.64
NSFR 137.61 136.43 134.33 131.55
Net loan/deposit ratio 63.76 68.08 68.52 69.19
Earnings per share (in BGN) 0.9 0.84 1.56 0.18
ROE (after tax) 10.4 10.24 19.24 9.20
ROA (after tax) 1.37 1.03 1.87 0.82
Income diversity ratio 68.68 64.17 68.25 65.54
Cost/income ratio (CIR) 41.38 50.35 46.46 61.13
Net interest margin 5.04 4.14 4.03 3.68
Operating profit/RWAs 7.63 6.30 5.71 5.60
Cost of risk (CoR) 2.66 1.37 1.59 0.72
NPL90+ ratio 17.51 17.48 12.95 12.25
Provisioning coverage ratio 14.19 10.44 11.59 10.34
N222PL90+ coverage ratio 67.82 59.74 89.48 84.36
Capital adequacy position at q1, 2019 strengthened furtherwith CET1 ratio reaching 12.7% (YE18: 13.3%) and totalcapital ratio is 15.5% (YE18: 16.15%), substantiallyexceeding the minimum regulatory requirements.
Shareholders’ equity of the Group of First Investment Bank raised throughout the first quarter by 8.93%.
Liquid assets ratio was 24.3%, while net loan/deposit ratiowas 69.2%, showing stable liquidity position & improvedefficiency.
The loan/deposit ratio amounted to 69.2% compared to69.04% the previous year. This represented actions forincreasing effectiveness, reflecting a conservative approachto credit risk management.
For the first quarter the reported results ensured return-on-assets (ROA) at 0.82% (2018: 1.87%) and return-on-equity (ROE) at 9.2% (2018: 19.24%), which reflected thebanking sector ability to generate good profitability inaccordance with the development and conditions of theenvironment.
In q1, C/I ratio was 61.13%, in line with banking sector’strend for decrease in net interest income.
1
2
3
6
1
3
4
Cap
ital
Liq
uid
ity
Pro
fita
bilit
yAsset qualit
y
2
4
55
6
30CONFIDENTIAL
Retail business: Retail loans well-balanced in terms of products & FX. Growing share of consumer loans.
STRUCTURE OF RETAIL LOANS
KEY HIGHLIGHTS & COMMENTS
RETAIL LOANS BY PRODUCT
▪ As of 31 March 2019, FirstInvestment Bank kept its thirdplace in terms of loans amongbanks in the country with amarket share of 10.63% (2018:10.69%) on an unconsolidatedbasis.
▪ An increase was registered inretail banking – up to 27.2% ofthe total portfolio (2018: 26.2%),microlending – up to 2.7% (2018:2.2%) and SMEs – up to 14.1%(2018: 13.6%, in execution of thestrategic goals for futuredevelopment and growth in these
segments.▪ In the currency structure of the
loan portfolio, the loans in BGNincreased up to BGNm 2,724thousand (2018: BGNm 2,724thousand) or 47.2% of the totalportfolio (2018: 47.2%)
1,4541,507
Retail portfolio,BGNm Retail portfolio,%
+4.1%By product By currency
1,711
51
6772 73
48
3126 25
1 2 2 2
2016 2017 2018 q1, 2019
BGN EUR Other
1,781
31CONFIDENTIAL
Retail business: Growing focus & share of Microlendingportfolio. Gross amount reached BGN 175m at q1, 2019.
GROWING SHARE OF MICROLENDING
KEY HIGHLIGHTS & COMMENTS
MICROLENDINGPORTFOLIO
▪ In q1, 2019, the microlendingportfolio grew by 24.6% to BGNm174,977 thousand compared toBGNm 140,422 thousand at the endof 2018.
▪ The market share of Fibank at theend of March amounted to 12.6% ofloans to corporates in the bankingsystem (2018, 12.8%), Fibankretained its second place (2018:second) among banks in thecountry on an unconsolidated basis.
▪ The loans of the other businesslines - to small and mediumenterprises and microlending, grew.
▪ They increased their share in thestructure of loans to companies ofthe Group to 17.7%, (2016:13.8%) and up to 3.0% (2017:2.9%) respectively, as part of thepolicy for portfolio diversificationand priority development in thesesegments.
+24.6%
51 55 55 56
39 35 35 34
10 10 10 10
2016 2017 2018 q1, 2019
Retail deposits by currency, %
BGN EUR Other
2016 2017 2018 q1, 2019
Deposits to individuals, BGNm
Current accounts Term and savings accounts
32CONFIDENTIAL
Retail business: Stable & granular retail deposit base, >80% covered by deposit guarantee scheme
RETAIL DEPOSITS BY CURRENCY
KEY HIGHLIGHTS & COMMENTS
RETAIL DEPOSITS BY PRODUCT
▪ As at 31 March 2019, First InvestmentBank stepped up on fourth place interms of deposits among banks inBulgaria (2018: fourth). The marketshare of Fibank amounted to 9.6% onan unconsolidated basis (2017: 9.6%)at the end of the period.
▪ The funds attracted from individualsamounted to BGNm 6,760 thousand atthe end of period compared to BGNm6,686 thousand at the end of 2018.They retained their structure-definingshare in the total deposits due tocustomers at 79.8% (2018: 80.5%).
▪ In the currency structure of attractedfunds from individuals, funds in BGNformed the majority at 58.1% of totaldeposits from customers (2018:55.5%), followed by those in EUR at32.1% (2018: 35%) and in othercurrencies at 9.8% (2018: 10%).
6,7606,594
6,305
100% 100% 100% 100%
+1.1%
6,686
33
Leading in Commercial Lending With Top 2 Position
Fibank’s loan book is predominantly commercial focused…Loan Portfolio by Type, Q1’19(1)
Source: Company disclosure, Bulgarian National Bank.Notes:(1) As per EC Definition (SME: <250 employees AND ≤€50mn turnover OR ≤€43mn total assets; Business: >250 employees AND >€50mn turnover OR >€43mn total assets). Breakdown as per Fibank’s internal definition would be: 10% SME, 63% Business, 2% Microlending, 25% Retail. (2) Includes loans to general governments, other financial corporations and non-financial corporations. (3) Excludes credit cards and unsecured loans.
…with a leading position in the Bulgarian sector…Corporate Loans(2) Market Share, Q1’19
…and diversified loan portfolioLoan Portfolio by Sectors of Economy(3), Q4’18
Fibank’s main competitive advantages in the commercial banking market are its:• Focus on quality of service (consistently ranked as the bank with
the best service standards in Bulgaria)• Deep understanding of the Bulgarian market• Wide distribution network
• Product offering includes term loans, investment loans,working capital loans, overdrafts, guarantees and businesscredit cards
• Active participation (almost full take-up) supportingbeneficiary companies under the programs related to the EUstructural and cohesion funds (JEREMIE initiative)
• Limited exposure to construction and real estate as Fibank did not participate in the boom for these sectors during 2007/2008
• Low portion of the book is uncollateralised (85% of total loan book is collateralised(3))
9
Loan portfolio by business lines
58.00%31.00%
11.00%
BGN EUR Other
58%
32%
10%
BGN EUR Other
2016 2017 2018 q1, 2019
Corporate deposits by product, BGNm
Current accounts Term accounts
34CONFIDENTIAL
Commercial business: Deposits from corporates grew 3.6% in q1, 2019 outpacing banking system averages.
CORPORATE DEPOSITS BY CURRENCY
KEY HIGHLIGHTS & COMMENTS
CORPORATE DEPOSITS BY PRODUCT
▪ Attracted funds from corporates andinstitutions in q1 remained at levelsclose to the previous year,amounting to BGNm 1,716 thousand(2017: 1,657 thousand). Thedecrease in volume reflected adecrease in current accounts against
a growth in fixed-term accounts.▪ Term accounts reached BGNm
532,139 thousand (2018: 451,198thousand).
▪ Current accounts amounted to BGN997,876 thousand at the end of2018 compared to BGN 897,423thousand a year earlier, forming58% of the attracted funds fromcorporates and institutions (2018:58%).
▪ By 31 March 2019, funds attractedby the second biggest non-bankingclients represented 5.2% of the totalamount due to other customers(2018: 5.2%).
2018
Corporate deposits by currency, %
Q1, 2019
1,716
1,3181,278
3.6%
1,657
110
121
136
115
2015 2016 2017 2018
3.592
4.013
4.268
4.062
2015 2016 2017 2018
5.7
5.9
6.1
6.3
5.5
6.0
5.7
6.0
2015 2016 2017 2018
Market share outgoing
Market share incoming
35CONFIDENTIAL
Payment services: Registered growth in fund transfers in both BGN & FX. Well-established market position.
FUND TRANSFERS IN FX CURRENCY
SOLID MARKET SHARES
FUND TRANSFERS IN BGN
BISERA & RINGSPAYMENT SYSTEMS
Correspondent banking (SWIFT), TARGET2 & BISERA7-EUR
(SEPA compliant)
Outgoing transfersin BGN, (000’ numbers)
Outgoing transfersin FX, (000’ numbers)
Market share offund transfers in BGN, %
-5% +0.2 ppt-15%
36
MANAGEMENT & CORPORATE GOVERNANCE
SECTION 5
Cooperation with the IFC: Successful CG & RM enhancement project during 2015
37
IFC COOPERATION MILESTONES
▪ In 2010, Fibank asked the IFC to prepare a diagnostic assessment of the Bank’s corporate governance & risk management. As a result, changes were implemented to the organizational structure and in 2012, ahead of its peers new committees to the SB were created in line with EBA latest guidelines.
▪ In 2014, at the initiative of Fibank and as a follow-up project, another independent review was performed. IFC’s recommendations were included as part of the Bank’s Restructuring Plan, committed to the European Commission.
▪ In 2015, the joint CG & RM implementation project was launched with detailed plan adopted and deliverables identified. Both Fibank & IFC teams worked together side-by-side with multiple on-site workshops delivered and off-line exchange of information. A steering committee was assigned to track implementation progress.
CORP.GOVERNANCE DELIVERABLES
RISK MANAGEMENT DELIVERABLES
✓Fibank introduced full CCO function in line with the latest Basel Committee principles on CG in banks.
✓A new independent member to the SB was elected with strong expertise and >20 years experience within the IFC.
✓A full CG Code & Disclosure policy were adopted in compliance with the latest best standards in this sphere.
✓The role of the Audit Committee was strengthened with new independent member elected and regular quarterly meetings with IA introduced.
✓Steps to strengthen the dialogue with minority shareholders were undertaken, e.g. a new Investor Club created and new initiative for regular meetings with minority shareholders.
✓Organizational changes were made, incl. full CEO, CRO & CCO functions being introduced. CFO was added as member of the MB.
✓Fibank introduced full CRO function based on the “three lines of defense” principle.
✓A new pricing policy was implemented for the setting of individual product price.
✓A new profitability tool was launched to better monitor the profitability per client, business line, portfolio.
✓RCSA methodology was enhanced to better assess operational risks at the process level, before & after controls.
✓A new rules for using KRIs in OP risk framework were adopted for improving processes for escalating & tracking tolerance limits.
✓Risk strategy was enhanced with risk appetite statement introduced and full risk map of the organization defined.
✓ALCO work was strengthen, i.e. a full fledged info pack in place for enhanced activity.
2015 Implementation Project
CONFIDENTIAL 38
Organizational structure ensures effective running of key functions & clear separation of duties.
SUPERVISORY BOARD
(Chair: Evgeni Lukanov, Deputy Chair: Maya Georgieva, Members: Georgi Mutafchiev, Radka Mineva, Jordan Skortchev, Jyrki Koskelo)
NOMINATION COMMITTEE
Chair: Georgi Mutafchiev
REMUNERATION COMMITTEE
Chair: Jordan Skortchev
RISK COMMITTEE
Chair: Evgeni Lukanov
PRESIDING COMMITTEE
Chair: Maya Georgieva
AUDIT COMMITTEE
Chair: Georgi Trenchev
INTERNAL AUDIT(Plamen Dimitrov)
MANAGING BOARD
(Chair: Nedelcho Nedelchev, Members: Sevdalina Vassileva, Chavdar Zlatev, Svetozar Popov, Jivko Todorov, Nadia Koshinska)
ALCOCREDIT
COUNCIL
RESTRUCTURING COMMITTEE
OPERATIONAL RISK COMMITTEE
BUSINESS UNITS SUPPORTING UNITS
39
CAPITALIZATION & LEVERAGE
SECTION 6
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
2016 2017 2018 q1,
2019
Regulatory capital, BGN,m
CET1 Additional tier 1 capital Tier 2 capital
Own funds calculations, BGNth
YE2018 Q1, 2019
Paid up capital instruments 110.000 110,000
(-) Indirect shareholding in CET1 capital instruments
-60 -62
Premium reserves 97.000 97,000
Other reserves 506.932 606,182
Minority interests - -Accumulated other comprehensive income
23.704 21,873
Deductions from CET1 capital:
(-) Intangible assets -14.402 -7,248
Adjustments of CET1 capital 192.544 100,598
Common Equity Tier 1 capital 914,996 928,343
Additional Tier 1 capital
Hybrid debt 195,583 195,583
Tier 1 capital deductions:
Transitional adjustments of Additional Tier 1 capital
Tier 1 capital 1,110,579 1,123,926
Tier 2 capital
Perpetual debt
Adjustments of Tier 2 capital
Total own funds 1,110,579 1,123,926
40CONFIDENTIAL
Regulatory capital well in line with CRD IV (Basel III). Profit retention following GMS in June’19 to support CET1.
REGULATORY CAPITAL
OWN FUNDS CALCULATIONS
REGULATORY REQUIREMENTS
▪ Since 1 January 2014, the provisions of the CRD IV package have been in force, transposing into European law the provisions of the Basel III capital standards for banks.
▪ CET1: a) issued and paid up capital instruments (ordinary shares); b) share premium from issuance of ordinary shares; c) audited retained earnings; d) accumulated other comprehensive income, including revaluation reserves; e) other reserves; f) minority interests. Deductions includes intangible assets.
▪ AT1: instruments include hybrid debt. Deductions include regulatory adjustments relating to items that are included in the capital or the assets of the Group, but are treated differently for capital adequacy regulation.
▪ Tier 2 capital: T2 capital consists of perpetual debt and regulatory adjustments related to revaluation reserve on land & buildings.
GMS in June’18 voted to capitalize the net profit for 2017, thus
ensuring strong internal capital generation with focus on CET1
In 2016 the Bank repaid perpetual debt (T2 capital) with principal EUR 21M
1,0261,124
935
+8.2%
1,111
2.5
3.5
6
0.50.75
1
0
1
2
3
4
5
6
7
Capital
conservation
buffer 2018
Buffer for
systemic risk
2018
Countercyclical
capital buffer
2018
Total capital
buffers 2018
2017 2018 2019 2020
41CONFIDENTIAL
Fibank to maintain capital buffers in line with CRD IV. New O-SII capital buffer applicable since 2018.
CAPITAL BUFFERS COMMENTS
▪ In addition to the capital requirements, Fibank maintains capital buffers in compliance with the requirements of Ordinance No8 of the BNB on capital buffers.
▪ Capital conservation buffer, comprised of common equity tier 1 capital equal to 2,5% of the total risk exposure of the Bank
▪ Buffer for systemic risk amounting to 3.5% of the Bank’s total risk exposures in Bulgaria, which is covered by common equity tier 1 capital.
▪ Countercyclical capital buffer, applicable to credit risk exposures in the Republic of Bulgaria, the level of which is determined by the Bulgarian National Bank each quarter. During the whole of 2017 and for the first quarter of 2018, it was defined at 0%
▪ Buffer for O-SII on an individual and consolidated basis, determined as a share of the total value of the risk exposures, is in the amount of 0% for 2017 and it will gradually grow from 0.5% in 2018 to 1% in 2020.
0.0 0.00
Capital buffer for other systemically important institution
Pursuant to decision of MB of BNB / 2018
With a decision dated 2018, the BNB determined ten banks in Bulgaria as other systematically
important institutions (O-SII), among which is First Investment Bank AD.
Types of capital buffers maintained by the Bank, %
12.9
15.9
5.9
13.3
16.2 16.2
12.7
15.5 15.5
CET1 ratio Tier 1 capitalratio
Total capitaladequacy ratio
Capital adequacy indicators for 2017, 2018, q1 2019 %
2017 2018 q1, 2019
42CONFIDENTIAL
Capital indicators exceeds minimum requirements. Ratio calculations consistent with CRD IV.
CAPITAL INDICATORS
CAPITAL ADEQUACY RATIO CALCULATIONS
▪ Common Equity Tier 1 capital ratio is the Common Equity Tier 1 capital of the institution expressed as a percentage of the total risk exposure amount;
▪ Tier 1 capital ratio is the Tier 1 capital of the institution expressed as a percentage of the total risk exposure amount;
▪ Total capital ratio is the own funds of the institution expressed as a percentage of the total risk exposure amount.
▪ The total risk exposure amount is calculated as the sum of the risk-weighted assets for credit, market, and operational risk.
▪ The Group calculates the credit risk requirements for the exposures in its banking and trading portfolios based on the standardised approach. Exposures are taken into account at their book value. Off-balance sheet commitments are taken into account by applying conversion factors for the purpose of their approximation to book values. Positions are weighted for risk using different percentages depending on the class of exposure and its credit rating. A variety of techniques are used to reduce credit risk, such as collaterals and guarantees. For derivative instruments, such as forwards and options, the counterparty credit risk is estimated.
▪ The Group also calculates capital requirements for market risk for foreign exchange and commodity instruments in the trading and banking books.
▪ The Group calculates capital requirements for operational risk using the basic indicator approach. The capital requirement is equal to the average gross annual income over the last three years multiplied by a fixed percentage (15%). The respective risk weighted assets are calculated by further multiplication by 12.5.
15.1
15.9
16.2
15.5
14.4
14.6
14.8
15.0
15.2
15.4
15.6
15.8
16.0
16.2
16.4
2016 2017 2018 q1, 2019
TCA ratio, %
15.1
15.9
16.2
15.5
14.4
14.6
14.8
15
15.2
15.4
15.6
15.8
16
16.2
16.4
2016 2017 2018 q1, 2019
Tier 1 capital ratio, %
12.0
12.9
13.3
12.7
11.0
11.5
12.0
12.5
13.0
13.5
2016 2017 2018 q1, 2019
CET1 ratio, %
+0.4 ppt
43CONFIDENTIAL
Capital indicators improved due to de-leverage measures. Hybrid capital fully compliant to absorb losses.
CET1 RATIO
T1 RATIO
TCA RATIO
AT1:HYBRID CAPITAL
▪ As at YE16, Fibank had issued two hybrid instruments (bond issues) with original principal on the amount of EUR 40M and EUR 60M (ISIN: BG2100008114 & BG2100022123), which fully comply with the requirements of Regulation (EU) No 575/2013 and are included in the additional tier 1 capital.
▪ The bonds are registered, dematerialized, interest-bearing, perpetual, unsecured, freely transferable, non-convertible, deeply subordinated and without incentive to redeem.
▪ Both hybrid bond issues are admitted to trade on a regulated market at the Luxembourg Stock Exchange.
-0.6 ppt
-0.7 ppt- 0.7 ppt
+0.3 ppt+0.3 ppt
44
FUNDING & LIQUIDITY
SECTION 7
63.8
68.08
69.4169.19
2016 2017 2018 q1, 2019
Net loan/deposit ratio, in %
2016 2017 2018 q1, 2019
Customer deposits, BGNm
Retail Business
0
20
40
60
80
100
120
2016 2017 2018 q1, 2019
Structure of liabilities, %
Other Hybrid & Perpetual debt
Other borrowed funds Deposit MF
Customer deposits
45CONFIDENTIAL
Customer deposits main source of funding with 95% of liabilities. Stable growth covered state aid repayment.
DEPOSITS: MAIN FUNDING SOURCE
STABLE GROWTH TO ADDRESS AID REPAYMENT
LDR SUPPORTING LIQUIDITY
7,5847,912
8,4768,4768,233 7,974
-0.22 ppt1.6 %
8,3438,748
327335
269
239
138 136 134 132
2016 2017 2018 q1, 2019
LCR & NSFR indicators %
LCR NSFR
2016 2017 2018 q1, 2019
Liquid assets, BGNm
Debt securities and gold
Current accounts and amounts with banks
Central banks
46CONFIDENTIAL
Strong liquidity in line with market. Liquidity ratios well above minimum required levels.
LCR & NSFR WELL ABOVE MIN LEVELS
LIQUID ASSETS GREW DESPITE SA REPAYMENT
STRONG LIQUIDITY RATIOS
2,144
2,304
1,987
Minlevel
Minlevel
-3 %
2,211
28.1
24.725.5
24.34
29.1
25.9 26.525.3
2016 2017 2018 q1, 2019
Liquidity indicators, %
Liquid assets ratio
Liquid assets/customer deposits
47
APPENDIX
SECTION 8
48CONFIDENTIAL
Awards
Best Bank in Bulgaria
Bank of the year by market share, by Bank of the year association
201020112012
Bank of the year by Bank of the year association
200120112012
20012011
Mrs. Maya Georgieva Banker of the year, by financial magazine Banker
2012 Mr. Vasil Christov Banker of the year, by financial magazine Banker
Management
Best Bank in Bulgaria by the financial magazine Euromoney
2011
Quality of Service
2012 Bank of the Client by Bank of the year association
Mystery Client by Bank of the year association2012
2011STP Award, Excellent quality , Commerzbank
20102009
2013
2009
20102011
Straight-Through Processing (STP) Excellence Award, Deutsche Bank
Bank of the Customer,by the influential Bulgarian daily “Pari” (“Money”)
20022003200620082009
The best customers service of the year by International Finance Exhibition “Banks, Investments, Money”
2007
For achieving a Straight Through Processing Rate in excess of 97% for US Dollar payments sent to Citibank New York
2009
Best Retail Bank in Bulgaria by Global banking & Finance
2014
Innovation in Retail Banking Bulgaria and Best Private Bank Of The Year by Finance publishing
2014
Mr. Matthew Mateev Banker of the year
2005
20142016
49CONFIDENTIAL
Awards
Brand/ Products/ Web/Other awards
Fibank is the strongest brand in Bulgarian market by the Superbrands
201220142016
Golden Martenitsa by Made in Bulgaria union2012
Best brand in financial institutions by My love marks2012
2017
2011
OSCARD for innovative co-branded credit card Fibank-Vivatel
2008
Financial product of the year, by International Finance Exhibition “Banks, Investments, Money”
2004200520062007
Three awards for charity at the Fifth Annual Donors' Conference organized by the Bulgarian Donors' Forum
2009
VISA International Certificate
for VISA Cards Retail Sales Volume
The Bank’s corporate site won category “Business” by Bulgarian Web Awards 2009
2014
2009
2006
Most Innovative Banking Product (Credit and Debit Card) by Global banking & Finance
The best corporate blogs in Bulgaria by Nova Vizia2009
First prize for best corporate BG Site2009
2012
2014 Best maturity deposits by Handelsblattnewspaper
2014 Developing card payments and bringing innovations by MasterCard
20072008
Best public company on the Bulgarian Stock Exchange, by "Dnevnik" newspaper
2015 Card Product of the Customers by b2b magazine
2015 Best marketing team by Baawards
2016
2016
2016
Annual awards for charity and CSR“Golden heart” by “Business Lady”magazine
Investment in a digital and civilliterate society by Digital Kids
National charity campaign “Easter for everyone”.
2016 “Product of the Year”
50CONFIDENTIAL
Awards
Brand/ Products/ Web/Other awards
2017 “Product of the Year”
Debit card for children and teenagers - category “Bank cards”Consumer credit online - category “Consumer credit”Digital card - category “Mobile financial services”
Webit awards:Mobile Digital Card – “Best digital payment solution” 2017
2017
2017
2017“Best consumer banking brand”
“GBM – Best SME banking brand”
2017 “Superbrands”
2017 “Golden Heart”
2018
b2b awards 2018
Category “Socially responsible campaign”
Category “Business debut of the year”
2018“Product of the Year” – Debit card for children and teenagers - category “Bank cards”
2018
My love marks 2018
Category “Banks”
Category “My favorite employer”
Category “Innovative brands”
2017 My love marks 2017Category “Banks - My favorite brand”
European Excellence Awards 20182018
2018 EFMA Accenture DMI Awards 2018“Offering Innovation” category, silver
Forbes, business awards2018
Annual business awards of BusinessLady magazine
2018
2019
“Product of the Year” – Smart lady2019