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Citi Handlowy 2023 Results
Citi Handlowy reported net income of 2.3 billion zloty for 2023. This is an increase of 46% compared to 2022. This growth was driven by higher institutional banking revenues. Consumer banking achieved high dynamics in strategic areas: wealth management and credit card business.
Total revenues increased by 24% y/y to 4.5 billion zloty in 2023. Net interest income amounted to 3.3 billion zloty (+20% y/y). Net fees and commissions income decreased by 18 million zloty (-3%) compared to the prior year. Operating costs including amortization reached 1.4 billion zloty and increased by 8% y/y. The cost of risk for the full year amounted to 9 basis points (cumulated annual cost of risk)
„We delivered very good results. This is driven by consistent execution of our strategy, in which we focus on supporting existing clients and acquiring new ones. I look forward to this year with optimism. After 2023, when some European countries stagnated or went through recession, we expect economic rebound in the coming months. This should have a positive impact on the business performance of our clients. Many of them also see growth potential once new funds from the European Union start to flow. However, this is a medium-term perspective,” said Chief Executive Officer Elżbieta Czetwertyńska.
In the fourth quarter alone, Citi Handlowy’s revenues reached 980 million zloty (-6% y/y), operating costs were at 352 million zloty (+11% y/y). Cost of risk dropped to 8 million zloty. As a result, net income amounted to 449 million zloty (-6% y/y).
In the institutional banking segment, loans decreased by 9% in 2023 and deposits increased by 10% compared to 2022. The volume of long-term loans granted last year as well as credit guarantees and factoring increased by 3% y/y. The volume of payment transactions in digital banking for companies (CitiDirect 3.0) increased by 4% y/y to 35 million transactions.
In the fourth quarter, Citi Handlowy co-financed acquisitions and investments for its clients. This included participating in a consortium of four banks providing financing to Breticontic Investments and Innova Capital for the spin-off of Polish production plants from the international Pfleiderer Group. Citi Handlowy provided 25% of this financing. The bank also participated in financing for the American Heart of Poland Group in the form of Sustainability-Linked Loan worth 1.6 billion zloty.
The bank was also active on the primary debt securities market and organized 11 bond issuances for an international financial institution in the total amount of 4.6 billion zloty in 2023.
For many years, Citi Handlowy has been a partner of local governments helping them to create modern administration and implementing innovations in local government bodies. At the beginning of this year, the bank signed a four-year agreement for cooperation with the city of Czestochowa and for three years with the city of Zabki. Lidzbark Warminski has also joined the group of the bank's clients.
In consumer banking, the number of affluent clients reached a record level at the end of 2023. In Citigold Private Clients it grew by 22% y/y, and in the Citigold segment by 13% y/y. The investment activity of new and existing clients contributed to the increase of investment products balances (including foreign currency investments) by 24% y/y. At the same time, the number of clients using Citi Kantor platform increased 4.4% y/y and the number of foreign exchange transactions by 8% y/y. It is also worth noting that the number of customers using the multi-currency payment service grew dynamically (+46% y/y).
Acquisition of new credit cards increased by 65% y/y. Citi Handlowy remains one of the market leaders in terms of the value of loans granted on credit cards – at the end of December the bank's market share was 17%. The volume of cash loans sales in the whole of 2023 increased by 30% y/y and by 47% in the fourth quarter of 2023 compared to the same period of 2022
„2023 was a record year for the bank in many areas: revenues, profitability ratios and cost efficiency. We successfully implemented activities in the area of capital management by effective management of our debt securities portfolio. What makes me particularly proud is the fact that we have significantly increased the profitability of the consumer banking business, including strategic wealth management. This was done, among other things, thanks to the acquisition of new customers and active sale of investments. Our actions have contributed to the very good performance of Citi Handlowy's share price, which increased by about 35 percent during the year, and at the same time the price-to-earnings ratio is at an attractive level compared to the market” said Chief Financial Officer Patrycjusz Wójcik.
In 2023, the profitability ratio (ROE) was at the level of 29% and the cost-to-income ratio equaled 32%. The bank’s total capital ratio reached 23.6%.
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