Bank Handlowy w Warszawie (BHW) Investor Update summary

Transaction highlights and strategic shift

• Announced sale of consumer banking business, including credit cards, loans, deposits, and wealth management, with transaction value up to PLN 1.1 billion and a net loss on sale of PLN 380 million recognized this quarter.

• Transaction involves demerging PLN 6 billion of loans, PLN 22 billion of deposits, and transferring half of employees; proceeds to be distributed as extraordinary dividends, subject to regulatory approval.

• Bank will remain listed on the Warsaw Stock Exchange and continue as a dividend bank, targeting 75%-100% payout of current profits and additional extraordinary dividends from sale proceeds and undistributed profits.

Strategic focus and market positioning

• New strategy centers on Institutional Banking, leveraging global expertise and client base, with focus on national security, energy transformation, and supporting Polish companies abroad.

• Institutional Banking already delivers high profitability and cost efficiency, with a diversified product mix and majority of revenue from global clients.

• Strategic pillars include supporting defense and energy transition investments, expanding in fast-growing sectors like tech and e-commerce, and investing in digital and AI tools for efficiency.

Financial targets and capital management

• Aims for return on equity of 19% and return on assets of 2.6% by 2027, with cost-to-income ratio below 30%.

• Plans to fully replace consumer business net profit with higher Institutional Banking profits by 2027, diversifying revenue mix and maximizing dividend payouts.

• Extraordinary dividends up to PLN 1.1 billion planned for 2025 and 2026, in addition to regular dividends.