18
-1- BANK HANDLOWY W WARSZAWIE S.A. 3Q 2009 consolidated financial results
- 1 -
BANK HANDLOWY W WARSZAWIE S.A.3Q 2009 consolidated financial results
- 2 -
54%
/mln zł/
4671
193
92
0
50
100
150
200
250
300
1Q 09 2Q 09 3Q 09
Impact of one-off event *
285
300%
172%
Significant increase of net income in 2009
* One-off event according to current report as of 15 October 2009: refers to correction of tax settlements.
- 3 -
Macroeconomic situation in 3Q 2009
Źródło: Citi Handlowy, GUS, NBP
Improvement in global market sentiment and strong fundamentals support the strengthening of the zloty
Positive trade balance
WIBOR3M still much higher than the Polish Central Bank reference rate
Investments and private consumption as factors of slowdown
90
95
100
105
110
115
120
Jan-09 Mar-09 May-09 Jul-09 Sep-09
EURPLN EURRON EURCZK
-40
-30
-20
-10
0
10
20
30
40
50
Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09
Exsports r/r Imports r/r
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
2q05 4q05 2q06 4q06 2q07 4q07 2q08 4q08 2q09
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
Private Consumption YoY Investment growth YoY
3.0
3.2
3.4
3.6
3.8
4.0
4.2
4.4
4.6
O/N 1W 2W 1M 3M
3/31/2009 6/30/2009 9/30/2009 Reference rate
- 4 -
Increase of operating margin in the last three quarters
Income Cost Operating margin
59%
25%
/PLN MM/
market+13%
market+18%
C/I
/PLN mln/
Operating margin = income - cost
138
219274 294
0
50
100
150
200
250
300
350
4Q 08 1Q 09 2Q 09 3Q 09
475593 626 625
336 374 352 331
71%
53%56%
63%
0
100
200
300
400
500
600
700
4Q 08 1Q 09 2Q 09 3Q 09-10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
7%sektor
-3%= +7
= +10
Increase of operating margin excluding one-off even t (positive impact of VAT return) due to stable income and decreasing costs
- 5 -
Net income 3Q2009 vs 3Q2008
33 MM
(3Q09/3Q08)
Net impairment losses
12%
(3Q09/3Q08)
Net interestincome
0%
(3Q09/3Q08)
Fee & commisionincome
10%
(3Q09/3Q08)
Expenses and depreciation
/PLN MM/
market -4%
market+9%
market-4%
69 MM
(3Q09/3Q08)
Treasury
41 69
8
36
12
216
33
0
115
285
0
50
100
150
200
250
300
350
NETINCOME3Q2008
Interests Fees Treasury Expenses Net impairment tax Vat correction Other NETINCOME 3Q2009
- 6 -
Net income 3Q2009 vs 2Q2009
125 MM
(3Q09/2Q09)
Net impairment losses
2%
(3Q09/2Q09)
Net interestincome
15%
(3Q09/2Q09)
Fee & commisionincome
6%
(3Q09/2Q09)
Expenses and depreciation
/PLN MM/
market +13%
market+3%
market-5%
7
5
19
20
45
71
125
20
115
285
0
50
100
150
200
250
300
350
NETINCOME2Q2009
Interests Fees Treasury Expenses Net impairment tax Vat correction Other NETINCOME 3Q2009
5 MM
(3Q09/2Q09)
Treasury
- 7 -
FX Options’ impact on Bank’s income in 3Q2009
FX Options (PLN 10 MM) 3Q 2009
/PLN MM/
/PLN MM/
*Including FX Options hedging
*
(2) (3) (2)(59)
(162)
(259)
(10)
-300
-250
-200
-150
-100
-50
0
1Q 08 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09
7
355
3
365
0
50
100
150
200
250
300
350
400
Profit before tax3Q2009 excl. FX Options
Treasury Netimpairment losses
Profit before tax3Q2009
FX Options impact
- 8 -
Strong capital base (CAR)
13,5%
9,8%
15,2%
13,2%12,1%
9,2% 9,2%
6%
8%
10%
12%
14%
16%
4Q '08 1Q '09 2Q '09 3Q '09
Citi Handlowy
Average for 7 biggest banks excl. Citi Handlow y(Tier 1 only, excl. subordinated debt)
High quality of capital
Capital structure of the biggest banks in Poland**
0% 2% 4% 6% 8% 10% 12% 14% 16%
Citi Handlowy
Bank 1
Bank 2
Bank 3
Bank 4
Bank 5
Bank 6
Bank 7
CAR (Tier 1 only, excl. subordinated debt) CAR
*
Source: Citi Handlowy, banks financial statements, own calculations
** for Citi Handlowy data as of 3Q 2009, for other banks data as of 2Q 2009* incl. 2008 net income for data comparability; reported value amounted to 11.2%
- 9 -
Net interest income and net interest margin
48%(3Q09/3Q08)
Deposits cost – non-financial sector
73%(3Q09/3Q08)
Debt securities portfolio income
A high net interest margin
/PLN MM/
150
200
250
300
350
400
450
3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09
2,6%
2,8%
3,0%
3,2%
3,4%
3,6%
3,8%Net interest resultNet interest margin
Net interest margin (market)
Net interest margin = sum of net interest results from 4 quarters to average assets from 4 quarters
- 10 -
Successive QoQ improvement of fee & commission result
Net fee & commission income
Increase of net fee & commission income in 3Q 2009
4%
/PLN MM/
↑21% - credit cards (3Q09/3Q08)
↑82% - brokerage(3Q09/3Q08)
↑11% - transaction services(3Q09/2Q09)
0
50
100
150
200
250
3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09
DMBH’s share in volume of trade in shares on WSE 3Q09 (%)
15%
58
14
11
107
Dom Maklerski Banku Handlowego
Others
(38 brokerage houses)
ING Securities
DI BRE
DM BZ WBK
- 11 -
Stable customer activity result
Customer activity
Proprietary management resultCustomer activity result
Scale on charts is incomparable
Proprietary management
Treasury
164.3 95.3 (69.0)
3Q 2008 3Q 2009 I/D (PLN MM)
3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q093Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q09
FXO (7 mln)*
FXO 9 mln*
FXO (259 mln)FXO (105 mln)
*Including FX Options hedging
- 12 -
/PLN MM/ Net impairment losses*
Net impairment losses*
Risk stabilisation in 3Q2009
*excl. FX Options
(120)(100)(80)(60)(40)(20)
02040
3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09
Retail banking: Higher risk of credit cards and consumer
loans portfolios
Corporate banking: Stabilisation of corporate portfolios –
effect of restructuring activities and risk mitigation
10 biggest banks58%**
3Q 2008 3Q 2009 I/D (mln zł)
(22.6) (52.8) (30.2) 3Q09Corporate Banking (1,5)Retail Banking (51,2)Total (52,8)(22,6)
Net impairment losses3Q08(4,0)
(18,6)
** data as of 2Q09
70%Coverage ratio as of 3Q 2009
- 13 -
Nonbanking loans and advances - at risk of impairment to total loans
11.5%
15.6%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
2Q 2009 3Q 2009*
Past due corporate loans structure (3Q 2009)
9%
8%
72%
49% 43%
19%
0% 20% 40% 60% 80% 100%
banking sector
Citi Handlowy
below 1 year 1-3 years above 3 years
Nonbanking loans and advances - at risk of impairment to total loans
18.4%
14.3%
8.2%7.7%
0%2%4%6%8%
10%12%14%16%18%20%
2Q 2009 3Q 2009
Individual clients
Corporate clients
* excl. derivatives; taking derivatives into account, the ratio amounts to 12.9%
Improvement of loan portfolio quality
� Sale of non-performing loans portfolio
� Intensifying colection activities
� Prudent credit policy
- 14 -
Retail Banking
/PLN MM/
Corporate Banking
Expenses under control
market-4%
(10%)
(10%)
(10%)
Corporate banking: Lower external services and transaction
costs
Retail banking: Optimisation of branch network,
technology and infrastructure and lower marketing expenses
3Q09Corporate Banking 44%Retail Banking 65%Total 53%
Cost / Income3Q0848%65%56%
171
196177
154
0
50
100
150
200
250
300
350
400
3Q2008 3Q2009
367331
- 15 -
Loans
Non-financial sector loans
Corporate loans Retail loans
Corporate loans: including public sector and local government institutions
9%
(1%)
Market 3Q2009/2Q2009
Changes (4%)
3Q2009/2Q2009
2%
Market 3Q2009/2Q2009
Changes* 1%
3Q2009/2Q2009
Gross loans non-financial sector Currency structure
84%16%
PLN FX
12%88%
Market
/PLN MMM//PLN MMM/
*excl. mortgage
0
1
2
3
4
5
6
30.06.09 30.09.09
10%
90%
32%68%
0123456789
30.06.09 30.09.09
- 16 -
TermCurrent
Deposits
Non-financial sector deposits
Retail depositsCorporate deposits
Corporate deposits including public sector and local government institutions
(2%)3%Current
5%(19%)Term
2%(13%)Total
Market 3Q2009/2Q2009
Changes 3Q2009/2Q2009
3%21%Current
(2%)(3%)Term
0%12%Total
Market 3Q2009/2Q2009
Changes 3Q2009/2Q2009
Current Term
Deposits non-banking sector Currency structure
83%17%
PLN FX
79%
21%
Market
22%
78%
0
2
4
6
8
10
12
14
30.06.09 30.09.09
/mld zł/
0
2
4
6
30.06.09 30.09.09
/mld zł/
9%
91%
Stable level of average balances
- 17 -
Leading partner for public sector
2009
Bank Gospodarstwa Krajowego
600 000 000 PLN
Roads bonds issue
2009
PZU SA
3 000 000 000 PLN
One of the biggest reverse repo transaction in the last
20 years
2009
DMBH
1 700 000 000 PLN
89% of MT’s minorities value concluded on WSE
2009
Miasto stołeczne Warszawa
4 000 000 000 PLN
Bonds issue programme
Organiser Bank Handlowy w Warszawie SA
TRANSACTION OF THE YEAR
Sale on order of Ministry of Treasury
„minority interest” Pekao SA for PLN 1.1 billion.
Municipal bonds issue
Organiser, Custodian, Payment Agent, Dealer
- 18 -
Summary
• Permanent trend of improvement in the market situation
• Citi Handlowy – well positioned Bank for taking advantage i n the market situation’s improvement
• High level of the first class capital
• High liquidity
• Quick reaction on quality of the loan portfolio’s dete rioration
What will happen in the end of 2009?
