Erste Bank Polska Sa

Good morning. It's 11 o'clock already. My name is Agnieszka Dowrzycka. I am head of investor relations in Santander Bank Polska. I'd like to welcome you all at the presentation of the financial results of Santander Bank Polska Group after the first half of 2023. Today with me we have Michał Gajewski, our CEO, Maciej Reluga, our CFO, Wojciech Skalski, head of financial accounting area. So let me give the floor to our CEO, Michał Gajewski. Good morning. Welcome at the presentation of the results after the first half of the year. As Santander, we want to consistently and consequently help our customers and our business model works well. we are performing against our targets as planned, but as we said in the previous quarter, we must bear in mind all the external factors that affect our performance. At the end of June, we generated 3.2 billion slots of gross profit. At the same time, the tax levies were 1.2 billion slots, while the total regulatory costs amounted to additional 194 million slots. We closed the first half with a solid net profit of 2.3 billion. In slide 7, we can see general operational data. So let's move on to this slide. As a group, we provide services to over 7.5 million customers, out of which over 4.2 million are digital customers. In Santander Bank Polska itself, we have 5.8 million customers, of which 3.4 million are digital customers. Year-on-year, the number of digital customers grew by 7%, and the number of mobile app users grew by nearly 14%. Customer deposits totaled 201 billion zlotys and grew by 9% year-on-year. The gross loans portfolio year-on-year grew by 3% to 163 billion zlot. Our assets grew by 7% to 264 billion zlot, and customer funds alone totaled 216 billion zlot, which is also a material growth year-on-year by 10%. And now slide A8. I will discuss the results in detail in further slides. Now let me highlight the key items. So as I said, 2.3 billion zlot of the group's net profit for the first half of the year, net interest income was 6.3 billion zlot, net fee income was 1 billion, 340 million, an increase by 5% year-on-year. The total income was 7.6 billion and this means a growth by 17% year-on-year. The PCR for the group was over 20.77% and return on equity was 14.3%. Our capital position, in my opinion, allows us to generate further growth and address all the risk factors that could occur in the future. And in our assessment, it also allows us to share the profit with our shareholders. Now, slide 10. Our customers. As I said, And in slide seven, 3.4 million active digital customers, including 3 million retail customers, which means a growth by 7% year on year, 356,000 SME customers, a material growth in this segment as well by 8%. And in terms of large businesses, we had over 21,000 such customers. the number of mobile application users is also growing currently it's almost 2.6 million customers in retail by 13 and in smes by 24 the number of transactions in mobile banking also grew We have already made over 70 million transactions in the retail segment, 29% more in Europe, and 2.2 million transactions in the SME segment, a growth by 34%. In slides 11 and 12, you can see our new products and services and our customer support activities. Let me mention just a few key highlights, new products and services, for example, For retail customers, we prepared a refreshed account and debit card offering. On the 1st of July, we launched Santander account, Santander Max account, and Santander on the Go package. For SME customers, we improved the lending process and reduced the time to yes. For corporate customers, we introduced more improvements in iBusiness platform. an option of executing transactions at a future date in the ESX module and simplifications of electronic services parameterization. In slide 13, we have some business data. For example, we have 5.7 million accounts for individual customers an increase by 6% year-on-year, which translates into 322,000 more accounts year-on-year. Accounts in Polish Slotia grew by 4%, foreign currency accounts grew by 12%. We also opened more accounts for foreigners. In this area, we recorded a growth of 18%. In quarter two, we sold mortgage loans worth 1.6 billion Zloty, This is a double growth versus quarter one this year. And in total, in the first half of the year, we sold 2.4 billion slots worth of mortgage loans. When it comes to cash loans, the cash loan sales in quarter two totaled 2.5 billion slots. On an annual basis, this is an increase by 3% and by 6% quarterly. Our sales in remote channels has been also growing 67% in quarter two. And in quarter four last year, 57% of accounts were open and loans were given in digital channels. In the first half of the year, we sold 4.8 billion of cash loans. Next sales of TFI investment funds totaled 1.2 billion lot. Our fund under TFI assets totaled 15.2 billion lot and its market share was over 10%. We are very happy about that. And in total, In the first half of the year, net sales of investment funds totaled $1.9 billion. In the SME segment in quarter two, we opened 16.5 thousand business accounts, out of which 52% were sold or opened in digital channels, including 31% of that in e-commerce.

In the first half of the year, we opened over

35,000 customers, 35,000 accounts for SMEs. Social loan sales grew by 3% quarter-on-quarter and totaled 1.4 billion slots. In business banking, so in larger company segments, we recorded good performance in terms of lending and we've been recording a growth in both loan and deposit balances. We have also increased our income on transactional banking and 12% growth in income from the EFX platform. In corporate and investment banking, we recorded a growth in income from transactions in credit markets and trade finance services. Now slide 15, as I said, growth loans. grew year-on-year by 3% to $163 billion. I have already mentioned sales in the retail and SME segments. In business banking, loans grew by 3%, while in the largest company segments loans grew by 15% year-on-year. The lease portfolio grew by 10% to over $13 billion, and the value of net sales was $3.8 billion. Our factoring subsidiary has been also developing. It has grown by 7% by the turnover, which is very crucial for this segment. During that time, it grew by over 14%.