About the Bank

News

News

10th February 2014

More than PLN 1 billion in net profit. Transformation towards innovations

  • In 2013 the Bank earned more than  PLN 1 billion
  • The key efficiency ratios at high levels: ROE – 16%, ROTE – 20%, ROA – 2.3%.
  • Effective cost control – expenses down by 5%, C/I – 51%.
  • Strong Corporate Banking – increase in assets in the SME/MME segment by 9% YoY, more than 500 new clients in this segment and dynamic growth of the Emerging Market Champions Program
  • Development of the Smart Banking Ecosystem – new Smart outlets to be opened in Poznań and Wrocław
  • Double-digit acquisition growth in the affluent and emerging affluent customer segment

“The results for 2013 allow us to focus on further growth. Last year Citi Handlowy announced its transformation. That’s a transformation towards innovations. We decided to make some changes in those areas that, from our point of view,  taking into account the new market conditions, are no longer viable. All this in order to be able to invest in solutions that offer new opportunities for growth. I mean here, for example, IT solutions thanks to which customers can enjoy a wide range of benefits and privileges resulting from Citi’s presence in more than 100 countries around the world, a new distribution model based on the Smart Banking Ecosystem or the Emerging Market Champions Program, covering more than 270 of our business clients. And it is on these strengths that we want to build our competitive advantage, said Sławomir S. Sikora, President of  Citi Handlowy.

After the four quarters of 2013, excluding a restructuring provision, the Bank reported a net profit of PLN 1,022.00 million, up by 5% versus the net profit generated in 2012. Including the restructuring provision, the Bank’s net profit amounted to PLN 973  million. Operating costs decreased by PLN 128 million compared to the corresponding period of the previous year. That’s 5% down compared to the same period of the previous year and as much as 9% down excluding the restructuring provision. The Bank’s cost to income (C/I) ratio fell to 51%.

In 2013 we did a lot to reduce our expenses and I am pleased that we can already see the first results of our efforts. Cost to income ratio (C/I) at the level of 50% is one of our strategic goals, said Witold Zieliński, Vice President of Citi Handlowy, and added: As far as expense management is concerned, it is crucial for us to eliminate costs in those areas that in our opinion offer no opportunities for further growth. The transformation of the Bank, including cost reductions, is to support investments in new technologies and it is to help us build a bank of the future.

The key efficiency ratios of Citi Handlowy were very good. ROE reached a high level of 16%, ROTE – 20%, ROA – 2.3%. In the conditions of record low interest rates the Bank also managed to defend its net interest earnings, the decline of which slowed down in the last quarter of 2013. Consequently, in the fourth quarter of 2013 the net interest income amounted to PLN 1,241 million. Profits from Treasury operations, thanks to the record high results recorded in the first two quarters of 2013, in the fourth quarter of the previous year amounted to PLN 657 million, up by 1% compared to 2012. 

Transformation towards innovations. Development of Consumer Banking.
The Bank consistently continues the roll-out of the Smart Banking Ecosystem, which assumes a shift of focus from the traditional branch banking to modern Smart outlets located in places frequently visited by the Bank’s clients and the use of state-of-the-art technologies to facilitate contact with the Bank (mobile and online solutions). The Bank declared that by the end of 2014 25 Smart outlets will be operating in Citi Handlowy’s distribution network. At the end of 2013 there were already two Smart outlets in the branch network of Citi Handlowy – in Warsaw and in Katowice. At the end of March 2014 the Bank plans to open two more Smart outlets – in Wrocław and in Poznań.

We are focusing on affluent and emerging affluent customers in retail banking combined with a broader segment focus for our asset products like credit cards. Other key elements of our strategy are to have a truly multi-channel approach, and to focus on best in class service. Therefore we took in 2013 a few key actions to transform the model banking in the future. We did the centralization of our telesales activities, which doubled our average conversion rate. We drove for digital, including the iPad app launch, which helped increase our digital penetration from 38% to 48% and our e-statement penetration to over 80%. At least launching our first two smart branches we took the first step in re-imagining the role of our branches in the digital age. In 2013 our affluent and emerging affluent clients were offered new currency services such as live FX rates or dual currency investments online. We support them also in opening accounts in other countries. Recent implementation allowing debit card linkage to EUR, USD and GBP accounts is a unique proposition on the market”, added Brendan Carney, Vice President of Citi Handlowy.

In 2013 the Bank also launched a Citi Handlowy for iPad application. Designed especially for this device, the application gained over 4,200 active users in just a few months. In accordance with its strategy, Citi Handlowy also dynamically develops its offer for affluent and emerging affluent customers. In 2013 the Bank had a strong focus on acquisition in these segments. The number of CitiOne account holders grew by 84% YoY while the number of active Citigold customers increased by 25% YoY. By changing its IT system the Bank also expanded its offer with a range of global services, including such unique services on the Polish market as a possibility to link a debit card to an account denominated in EUR, USD or GBP with a possibility to pay and withdraw cash without currency exchange or international instant money transfers between accounts held with Citi and Citi Handlowy. In view of the changing market conditions in 2013, the structure of the Bank’s credit card portfolio also changed. The share of ‘ordinary’ credit cards (not linked to any loyalty program) in the Bank’s portfolio grew from one digit to 46%. Yet another quarter in a row Citi Handlowy’s credit card was most often used and  it defended its leading market position in terms of transaction value and debt.

Corporate Banking and Financial Markets Leader
The Bank consistently develops its Emerging Market Champions Program, under which at the end of the fourth quarter of 2013 it served 270 Polish and global clients. It opened more than 70 accounts for Polish companies abroad and 25 new relations with global clients. In the past year the Bank once again recorded an increase in assets in the SME/MEE segment – up by 9% YoY. During that time acquisition in this segment increased by  7% and the Bank’s portfolio grew by 525 new clients.

As regards the Markets business, 2013 was a historic year for the Bank. In Euromoney’s ranking in the FX trade category, the Bank ranked first with a 36% market share.  Citi Handlowy once again won the competition organized by the Ministry of Finance for the function of Treasury Securities Dealer. As regards brokerage operations, the Bank outdistanced its rivals by nearly 4pps in terms of equity trading volumes on the Warsaw Stock Exchange in 2013 and ended the year with a 12.7% market share. In terms of capital acquisition from the WSE in 2013 the Brokerage House of Citi Handlowy with an over 15% market share was an unquestionable leader. In the past year the Brokerage House of Citi Handlowy participated in all key transactions. It was a co-bookrunner in the initial public offering of Energa, a global book-building coordinator for Grupa Azoty, PKO BP or Bank Pekao and a global coordinator of the secondary public offering of BZ WBK.

The presentation from the press conference summing up the results of the fourth quarter of 2013 is available at www.citihandlowy.pl /Investor Relations.

back