Erste Bank Polska Sa

And gentlemen, this is 11.30, so let us start. I would like to welcome you to the presentation of the financial performance of the Thunderbank Polska Group for 2020. Together with me, there is CEO Michał Gajewski, CFO Maciej Reluga, Financial Controller Carlos Toleno, and Wojciech Skalski from the Management Accounting area. My name is Agnieszka Dowrzycka, and I'm in charge of Investor Relations. CEO, over to you.

Hello, ladies and gentlemen. Michał Gajewski here. Together with me, there is Maciej Raluca. This is the first presentation of the financial results this year.

We are going to present the non-audited financial performance for 2020. We've been through a period of many hardships and challenges. The entire banking sector, just like the economy, has adjusted quite quickly to the requirements and customers' preferences. The key elements that have become our priorities have been safety, mobile solutions, and remote channels. We can see that although customers come to branches again, their footfall is definitely much lower than previously before the pandemic. We're conducting analysis on that, and we can see that in quarter four, the footfall in our branches was at the level of 72% of the pre-pandemic level. Of course, this is highly compensated with the use of digital channels. We are staying together with our customers, and we want to provide them with full and complex support. during this difficult period of the pandemic the details of our aid actions were covered during our previous conferences and of course they are presented on the slides in our presentation i'd like to mention the key initiatives We took care of our customers by offering them a possibility to defer loan repayment, and we provided the customers with a wide range of products. We made sure our employees were safe, both physically and socially. And on top of that, we donated $5 million to hospitals in the wake of a charity campaign that we ran together and we organized with our customers. The details are presented on the subsequent slides, but now let us jump to the slide number 13. As a group, together with Santander Consumer Bank, we provide services to over 7 million of customers, out of which over 5 million customers are serviced in Santander Bank Polska. Together with Santander Consumer Bank, we have almost 3 million digital customers. Deposit portfolio went up by 10% year-on-year to reach over 170 billion slots. Gross loans, I would say that this is flat year-on-year as it stood at over 114.3 billion slots. The trends within loans and deposits at our bank reflected what was happening in the market in 2020. The assets went up to over 229 billion slots, up by 9% year-on-year. Now let us go to the next slide, slide number 14. Just like in the previous quarters, we had several one-offs that influenced the underlying results. You might find the details in the presentation and in the report. When talking about the underlying, we take into account two factors. We need to consider the contribution paid to Bank Guarantee Fund and excluding from the profits the effects of the small and big Court of Justice of the European Union and additional provisions for the expected credit loss and legal risk. After four quarters, the attributable profit was 1,037,000,000 slots. In underlying terms, it was 21.7% lower. In Q4, net profit stood at 81.5 million slots and was affected by higher provisions for legal risk and restructuring provision. Net interest income stood close to 5.9 billion slots and was some 10% lower year-on-year. Of course, this was negatively affected by the interest rate cut and lower demand for credit. After four quarters, net fee income was 2.16 billion slots and was at a similar level year on year, which, bearing in mind the pandemic situation, should be perceived as a decent result. In quarter four alone, net fee income was exceptional and stood at almost 570 million slots. Net total income was at 8.6 billion slots and in underlying terms went down by 7.6% a year. Quarter-on-quarter total net income was 2.2% higher. Return on equity was 8.1% in underlying terms. It's worth mentioning that apart from the profits... this year that we have in the numerator, the denominator is also what counts here because this represents the profits retained in the last year, which was in line with the KNF recommendation, and it's considered the entire sector. Return on assets in underlying terms was at 0.9%. We have a very strong capital position, much above the expected levels. Our Tier 1 capital was above 18% and TCR over 20%. The minimum levels here are 11.2% for car and 9.2% for Tier 1. So we can see that we have a high excess here.