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UniBanka. Jiří Kunert - CEO. 2 nd UCI INVESTOR DAY. Focus on New Europe. London, December 5 th , 2002. AGENDA. Slovakia: Key Highlights UniBanka: Key Figures Key projects and strategies Zivnostenska Banka. THE ECONOMIC PORTRAIT OF SLOVAKIA. Slovakia. - PowerPoint PPT Presentation
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Jiří Kunert - CEO
UniBanka
London, December 5th, 2002
2nd UCI INVESTOR DAYFocus on New Europe
2
AGENDA
Slovakia: Key Highlights
UniBanka: Key Figures
Key projects and strategies
Zivnostenska Banka
3
THE ECONOMIC PORTRAIT OF SLOVAKIA
Year 2001 Slovakia
Population, mln
Inflation rate, %
5.4
7.1
Per Capita GDP, Eur 4,133
2002E
Real GDP growth, %
Ref. interest rate
3.9
7.7
Inflation rate, % 3.4
2003E
4.1
6.3
8.4
Ref. interest rate, % 7.6
2004E
3.8
6.0
5.9
S&P country rating BBB-
Slovakia: an OECD member and has been invited to join NATO and EU in 2004
Political stability has been achieved, with a market-friendly and stable government
Growing profitability of corporate sector driven by advancements in restructuring and by higher inflow of FDI
Low per capita income reflecting low labour costs Highly open economy dependent on international
development
Investments and exports are the main drivers of growth
Historically low inflation achieved through control of administrated prices, with liberalisation expected starting from 2003
Interest rates are decreasing to withstand appreciation of the currency
Source: UniBanka estimates
4
BANKING SECTOR IN SLOVAKIA SHOWS SIGNIFICANT IMPROVEMENTS AFTER RESTRUCTURING AND PRIVATISATION
2001
8.6
11.3
9.6
10.9
2002E
9.3
12.4
2003E
9.8
13.0
(Loans+Deposits)/GDP
Relatively high level of banking penetration (almost 95%) compared to CEE region
Over 90% of banking sector controlled by foreign banking groups
High concentration – TOP 3 banks having over 50% of assets and 60% of sector deposits
103%
EU
203%
Slovakia
Loans growth, %*
Deposits growth, %
2004E
9.8 9.1 8.1 7.4Rate on Loans(1), %
4.8 4.1 3.3 3.0Rate on Dep.(1), %
5.0 5.0 4.8 4.4Spread (1), %
(1) End-of-period average Banking System data; growth calculated in local currency, * net of restructuring process
Loans growth revival after period of credit-crunch in 98-00
High deposits growth partially distorted due to privatisation proceeds inflow
External interest rates highly dependent on central bank policy
192
EU Slovakia
580
Branches per mln inhabitants
Slimming of margins reflecting high competition on loans market
Source: UniBanka estimates
5
AGENDA
Slovakia: Key Highlights
UniBanka: Key Figures
Key projects and strategies
Zivnostenska Banka
6
Branches 62Employees 921Customers 109,000
o/w retail+SME 104,000o/w corporate 5,000
Cost/income 67.6%ROE 10.6%Deposits Mkt Share 3.3%Loans Mkt Share 5.9%
Total Assets 772.6Deposits 594.6Loans 397.3Deposits/loans 149.7%Total Revenues 30.5Net Income 3.54
UNIBANKA: THE MID-SIZED BANK IN SLOVAKIA
Euro mln, consolid. figures as at Sep 02, IAS
Slovakia
10 Branches
52 Sub-branches
Strong position in corporate funding with 8% market share
Variety of highly competitive products’ offer for both retail and corporate segments
UniBanka is the 4th bank in Slovakia as for distribution, offering a high growth potential especially in SMEs, Affluent and Private segments
7
Operating costs +15.8% y/y highly impacted by: one-off re-branding costs (approx. Euro 1.2 mln) investments into expansion network project increasing deposit insurance fund fees (from 0.25% to 0.75%) growth engineering project costs
9M02 UNIBANKA RESULTS: IMPROVING NET INCOME (+16.4%Y/Y) THANKS TO GOOD REVENUES WELL COUNTERBALANCING RISING COSTS
(Euro mln, IAS)
Total Revenues*
9M02
30.57.1%
9M01
28.5
9M02
3.5
16.4%
9M01
3.1
* Including extraordinary items
9M02
4.8
1.3%
9M02
21.9
19.5%
9M01
4.7
9M01
18.3
9M02
3.8
-30%
9M01
5.4
Net Interest Income
Net Commissions and Fee Income
Other Operating Income
Very good increase of Net Income y/y (+16.4%) thanks to a 7.1% rise in total revenues driven by a substantial growth of NII (+19.5%) mainly due to increased volumes (loans +23%; deposits +14.2%) and tax optimisation. NII’s growth impacted by introduction of swaps/FRAs.Other operating income decreased due to lower contribution of FX income
Net IncomeOperating Costs
9M02
20.615.8%
9M01
17.8
Loan loss prov.
9M02
5.910.3%
9M01
5.4
8
Total Assets
23.8%
19.7%
8.9%
15.1%
Net Loans
26.4%
21.2%
Deposits
Erste Bank
IntesaBCI
Slovenská sporiteľňa
Všeobecná úverová banka
Major Shareholders
12.3% 15.1% 12.6% Reiffeisen ZBTatrabanka
7.6% 4.1% 7.6% KBCČSOB
3.6% 6.6% 2.7% Bank Austria AGHVB Slovakia
3.7% 5.4% 3.4% UniCredito ItalianoUniBanka
2001 2001 2001 2002
GOOD MARKET SHARE IN LOANS AMONG MID-SIZED PLAYERS
9
Net DOUBTFUL LOANS
Doubtful* and NPLs** as % of Total Net Loans
6.7%
2001 9M02
5.7%5.3%5.1%
81.4%
2001 9M02
77.9%77.9% 76.0%
Coverage ratios
Net Doubtful/
Total Net LoansNet NPLs/ Total Net Loans
On Gross Doubtful Loans
On Gross NPLs
Net NPLs
22.7 -1.2%
12.9%17.8
Dec. 2001
% ch. on
Dec.’01(Euro mln)
22.4
20.1
9M 2002
Careful lending policy focusing on state controlled entities (relying on state guarantees, e.g.: Railways, Electricity provider, etc.) and low risk profile foreign companies
Selective lending with conservative risk assessment
Enhancing scoring and monitoring systems
ASSET QUALITY UNDER CONTROL WITH CAUTIOUS COVERAGE RATIOS
* Doubtful Loans = doubtful, substandard and loss loans
** NPLs = loss loans
10
AGENDA
Slovakia: Key Highlights
UniBanka: Key Figures
Key projects and strategies
Zivnostenska Banka
11
KEY STRATEGIC PROJECTS
Growth Project Engineering
Network Restructuring and Expansion
Human resources dept. and commercial divisions working together to identify and hire highly talented staff to be trained to develop the selling activity
Focus on Strategic Segments
Introduction of new business divisional model for branch management (with directors for retail and corporate)
Expansion of network: opening of 17 new outlets and a call centre in 2002, additional 8 new outlets and 3 private centres in 2003
Retail: Affluent, Private and SMEs as drivers of future growth (development of new service models and products)
Corporate: Focus on mid sized companies
To support improvement of business profitability and risk management
ALM, Profitability and Credit Risk reporting available in the first months of 2003
New MIS Project (Management Information System)
12
AGENDA
Slovakia: Key Highlights
UniBanka: Key Figures
Key projects and strategies
Zivnostenska Banka
13
THE ECONOMIC PORTRAIT OF THE CZECH REPUBLIC
Year 2001Czech
Republic
Population, mln
Inflation rate, %
10.3
4.7
Per Capita GDP, Euro 6,147
2002E
Real GDP growth, %
Ref. interest rate
2.5
2.8
Inflation rate, % 1.9
2003E
3.7
3.5
2.0
Ref. interest rate, % 5.2
2004E
4.0
4.0
2.8
S&P country rating A-
Czech Republic: growing open economy benefiting from historically developed industrial base and good location in the heart of Europe close to Germany
Uninterrupted strong flows of FDI supported by a stable and strengthening local currency
Ongoing restructuring of the economy driven by private sector and tough competition on export markets
Stable unemployment
GDP growth strongly dependent on German/European economy performance
Flat/falling rate of inflation
Low level of interest rates (25–50 bp below Euro area) boosting: - consumer demand- housing construction- corporate borrowing
Source: Zivnostenska Banka estimates
14
ZIVNOSTENSKA BANKA: A FURTHER STEP IN UCI’SPRESENCE IN NEW EUROPE
UCI SIGNED AN AGREEMENT FOR THE ACQUISITION OF 85.16% OF ZIVNOSTENSKA BANKA
Customer Loans
Deposits
700
1,235
Total Revenues 33
Total Assets 1,661
8th Czech Bank ranked on total assets (market share of 2.8%), with a leading position in the affluent and private banking segments
Excellent asset quality (NPL/Gross loans at 2%)
800 employees, 85,000 retail customers and 2,000 corporate clients
Close of the deal expected by end 2002 (subject to authorizations)
Net Income 4.5
Shareholders Equity 86
Dec 2001
Distribution network: 8 branches and 19 agencies located in all the major towns of the country
Euro mln
15
Annexes
16
Interest margin (incl. div.)
Net non interest income
Total revenues
Operating costs (incl. dep.)
Net operating income
Net income
Net attributable income
- of which: Staff costs
Dec. 00
22.38
13.99
36.36
11.54
-26.13
9.98
Net loan loss provisions 35.44
(Euro mln, IAS)
Taxes (1) 2.24
24.82
Dec. 01
24.36
13.56
37.92
14.42
3.54
9.76
8.16
2.72
23.49
Ch. % 2001/2000
8.85
-3.06
4.27
24.95
113.54
-2.17
-76.97
21.61
-5.35
Sep. 01
18.30
10.19
28.49
10.67
3.05
7.34
5.36
2.27
17.82
Sept. 02
21.87
8.63
30.50
9.87
3.54
7.94
5.91
0.41
20.63
19.53
-15.34
7.06
-7.51
16.40
8.22
10.30
-81.71
15.78
Ch. % Sept. 02/Sept. 01
Other provisions 0 0 0 0 0 0
Extraordinary income/loss 0 0 0 0 0 0
Pre-tax profit/loss -23.89 6.26 126.20 5.31 3.96 -25.47
Minorities 0 0 0 0 0 0
-26.13 3.54 113.54 3.05 3.54 16.40
UNIBANKA9M02 CONSOLIDATED INCOME STATEMENT
(1) Statutory tax rate for legal entities: 25% (29% until the end of 2000)
17
Cash and deposits with Central Banks
(Euro mln, IAS) Sept. 01
109.23 213.89 71.88
Sept. 02
-34.19 -66.39
Ch. % Sept. 02/Sept. 01
AS
SETS
Loans due from:323.03 336.81 397.29 22.99 -100.0- Customers
- Banks 0 0 0 - -
Dec. 01Ch. %
Sept. 02/Dec. 01
Trading Securities 215.58 124.18 273.22 26.73 120.02
Fixed assets 23.9 24.6 25.45 6.5 3.44
Other assets 3.21 7.22 4.76 48.16 -34.06
LIA
BIL
ITIE
S
674.96TOTAL ASSETS AND LIABILITIES 706.71 772.61 14.47 9.32
Deposits:520.7 555.19 594.66 14.20 7.11- Due to Customers
- Securities in issue 18.8 18.8 18.8 0 0
Reserve fund for possible loan losses 0 0 0 0 0
Specific reserves 0 0 0 0 0
Other liabilities 14.69 11.65 14.04 -4.42 20.50
- Due to Banks 79.15 79.73 100.12 26.49 25.57
Minority interest 0 0 0 0 0
Shareholders’ equity 41.62 41.33 44.99 8.09 8.85
Subordinated debt 0 0 0 0 0
UNIBANKA9M02 CONSOLIDATED BALANCE SHEET