Erste Bank Polska Sa

I think we're all here and we can start. It's 11.30. My name is Agnieszka Zbawrzycka. I'm in charge of investor relations. Welcome everyone to the presentation of preliminary financial results of Santander Bank Gold for 2022. I am here with Michał Gajewski, the CEO, Maciej Reluga, the CFO, and Wojciech Skalski, responsible for financial accounting. I encourage you to listen to the presentation during which you can send your question. You can send it via the link or send them to my email address. Mr. President, I give the floor to you. Ladies and gentlemen, welcome to the presentation of preliminary financial, unaudited financial results. It was a tough year for the entire banking sector, full of unprecedented geopolitical and economic challenge. In such harsh conditions, it was difficult to build enough capital base to become a key driver for the economy or strategic projects such as the energy transformation project. I need to highlight, however, that Santander Bank Opioid Group managed those challenges quite well. And at many levels, we proved that our business model is robust and well-performing. Last year, we generated $4,353,000,000 of gross profits. The tax levies were $2,125,000,000. The additional regulatory charge was $2,429,000,000. And despite this high strain, we closed the year with a solid net profit of $2,799,000,000. Let us move forward to slide number seven. with the general operational data. A few words about our customers. As a group, we provide services to 7.4 million customers, out of which 3.5 are digital customers. Santander Bank Polska alone provides services to 5.7 million customers, including 3.2 million digital customers. Year on year, We registered growth in this respect of 10%, and we have 12% more mobile customers. Deposits now worth over $196 billion. This is up 6% year-on-year. Growth loans up 4% year-on-year. Assets 7% year-on-year with customer funds. now worth $209 billion. This is an increase of 3% year-on-year. We're moving to slide 8 with financial highlights. Net profit $2,799,000,000. In fourth quarter alone, that was over $903 million. Net interest income $9,652,000,000. Net fee and commission up 3% year-on-year to 2,366,000,000. Total income, 12.4 billion. Return on equity, 12.1%. Despite the... And in the denominator, we had quite a large... which is over $10 billion for the group. GCR for the group, 19.27%. Tier 1, 17.54%. I want to highlight our robust capital position and ratio well beyond regulatory level. This proves we're well prepared to further growth and to respond to any risk that could materialize in the future. This is a solid result, very good performance, and we are ready to share profit with our shareholders. I will be talking about it in detail later. Slide 10. our customers' numbers. As I said, we have 3.2 million digitally active customers. In retail, that's almost 3 million customers, 10% up year-on-year. In SME, that's 340,000 customers. That's up 9%. In business and corporate banking, that's over 21%. customers. That's up 3% year-on-year. I've mentioned we have more and more mobile app users at the moment. That's 2.4 million. That's up by 12% in retail, 11% in SMEs, and 10% in corporate banking. This, of course, impacts the number of mobile transactions. In four quarters long, we had 64 million of such transactions. Very good performance here, both in retail and SMEs. We have rolled out a new mobile app, which we're working on at the moment. We're working on the final functionality. It is now in trial version, and it will be rolled out to our customers this year. Slides 11 and 12. You see information about the new product in our offer. So just the highlights here, we've managed to introduce a digital process for sending our repayment schedule to our cash and mortgage borrower. In SMEs, we have new solutions where Business owners can turn their smartphones or tablets into payment terminals. For larger businesses, we implemented the qualified signature. We also have a new agreement framework following the plain language rules. Slide number 13. In quarter four, we sold mortgage loans worth $653 million. We know the situation in the market at the moment that sales are going down for mortgages. Cash loans, sales worth $2.3 billion. Year-on-year, that's up 15%. We maintain high sales of cash loans also through digital channels. Quarter over quarter, total sales is more or less the same, with a minor decrease. TFI net sales, we had a lot of redemptions, but we see those are slowing down in December. The whole year was not great for this branch of business. And we know the regions, the uncertainty in the market and the outbreak of the war in Ukraine. SME, high sales of business accounts, 17,000 accounts, high levels in digital channels and e-commerce, high growth year on year. In terms of loans products, in Q4, sales went down 5% year-on-year. 2% quarter-over-quarter, sales reached $1.2 billion. Year-on-year, we see an increase by 1.1%. Business banking, loans products, up 14% year-on-year, and income from EFX platform up by 28%. CIB, substantial increase from transactional banking and financial markets as well as treasury services. Slide 15 now, growth funds. we see an increase at consolidated level by 4% to over 158 billion. BCB, this product up 10%, CIB loans up 9%. We see that this market and sales here are noting significant growth. Leasing growth up 9% year-on-year, positive trend here. Net value of sales, that's 6.8 billion for leasing. Factoring portfolio, the portfolio shrank, but the revenues increased by 13% year-on-year. Slide 16, customer funds, customer deposits up 9%. 6% year-on-year to reach $196 billion at the end of December. Year-on-year, deposits went up by over $11 billion. We see growth in term deposits by $31 billion. We see a decrease in current deposits by $3.7 billion. Share in turn deposits increased to 29% at the end of December. To sum up, we have excellent liquidity position. LCR was 177.3% at the end of December for the bank, a loan that was 163, over 163%. Now let's move to slide 17.

Net interest income and margin. The net interest income was 9.7 billion Zl. And the year-end and the quarter-end loan, it was 2.8 billion Zl. We should remember about one of non-recurring items when we compare quarter to quarter. And they were as follows. That is the cost of payment holidays in quarter three it was $1,357,000,000. In Q4, it was $186,000,000. Overall in the year, it was $1,544,000,000. Another factor was the adjustment of $78,000,000 posted by Santander Bank Polska related to the reimbursement of bridging fees. Having stripped off those items, the net interest income declined by 1.5% compared to Q3. As you can see, the annualized net interest margin in Q4 was 4.94%. On an electrolyte basis, 28%. What were the drivers? One of them was the posting of those non-recurring events to the net interest income. All the details are presented in the presentation. Another driver was the growth in its interest expense. Let me remind you that 10 times since the beginning of the year, we increased interest rates on our deposits. responding to the needs of our customers and tracking what is happening on the market. In Q4, we had a very attractive proposition, a special offer for personal customers at 8%. The annual net interest margin was impacted by the acceleration of cash flow sales and corporate loans, but also by the higher yields

on securities. Next, the income, slide number 18. The growth by 3% year-on-year. It was 2.6 billion slots.