In 4Q23 Bank Millennium Group’s reported net profit of PLN115 million. In 2023 overall, the Group posted net profit of PLN576 million (ROE of 9% on reported average equity), a very positive development after the two-year period of negative results. 4Q23 brought a solid growth in operating income (10% y/y) translating into a strong core business result. Capital ratios again improved considerably in the period and the Bank/Group now enjoy a significant surplus of capital.

- From a business point of view, a good fourth quarter ended a good year of 2023 in both retail and corporate banking. Customer deposits were up 1% in the quarter, with retail ones growing 3% q/q, in line with market trends. Origination of PLN mortgages improved significantly growing 32% q/q to nearly PLN1.7bn while non-mortgage net retail portfolio was up 3% q/q, benefitting from strong origination of cash loans (PLN1.5bn). During that period we reached three important milestones: our new corporate app kept high development pace strengthened by the implementation of forex trader functionalities and push notifications for authorizations of transfer; we achieved the 3 million of active retail clients target and 90% of digitalisation level; and we grew in microbusiness. All the above was achieved with constant attention to the quality of our service and positive customer experience for which we have been presented with important banking sector awards. – Joao Bras Jorge commented on the results.

The three-digit net result of the quarter was achieved despite the still elevated costs related to FX-mortgage portfolio. In 4Q23 alone, these totalled PLN778 million after tax while in 2023 overall PLN3,338 million (+41% y/y). 4Q23 net profit adjusted for these costs and other minor one-offs but with a hypothetical asset tax (‘bank tax’) (PLN100 million) would be PLN756 million. Adjusted, full year 2023 net profit was PLN2,993 million, up 34% y/y, well above the PLN2bn net profit before FX costs originally targeted for 2024.

In 4Q23, the number of active customers crossed the 3 million mark, a target initially set for YE24. This represents 300 thousand or 11% growth of customers’ number since YE21 (2023 alone: +116 thousand). Also the share of digitally active customers exceeded 90% (84% at YE21), ahead of the plan.

4Q23 also saw quarterly number of amicable settlements with FX-mortgage borrowers returning above 1,000. The number of settlements signed to date totalled 21.4 thousand (2023: 3.7 thousand), an equivalent of 35% of the number of loan agreements active at moment of the full roll-out of amicable settlements process. Additionally, the number of in-court settlements continued to increase at a steady pace. In 4Q23 alone, over 185 such settlements were achieved (17% of total) while in 2023 overall 529 (14%).

Capital ratios again improved considerably in the period with Group’s T1 capital ratio increasing to 14.7% from 13.5% at the end of September’23 (Bank solo: 15.4% from 14.1% respectively) on a combination of securitisation transaction (non-mortgage retail loans) and improved valuation of the bond portfolio. At YE23, Group’s T1 ratio was 489bps above the required minimum level. The 345bps (31%) improvement of the Group’s- T1 ratio in 2023 through organic generation of capital was remarkable and probably unprecedented on the Polish market.

Summarising the year Joao Bras Jorge said: 2023 was a successful year of implementation of our strategy 2022-2024 “Inspired by people”. Some of the targets we have reached ahead of time e.g. we already exceeded 3 million active customers, which we planned to reach at the end of 2024 and we reached the landmark of 90% of them using digital channels. Now we are in the final sprint to attain all remaining goals at same time that we will start working with our teams on defining the strategy for the period 2025-2027, which in the second half of the year will be presented to the public.

Results of the Group are also available here: https://www.bankmillennium.pl/o-banku/relacje-inwestorskie