Development strategy

1. Development strategy of the Bank Pocztowy Group and its implementation

Key strategic assumptions determine stretch goals for the Bank, to include building a large client base through active acquisition of current account holders in the extensive network of Poczta Polska offices and in the growing network of Microbranches.

In 2014, under the efficiency improvement initiative, the Group modified its product offer regarding current accounts in order to activate the existing clients. On the one hand, this slowed down the client number growth, also in the beginning of 2014, but on the other hand, significantly contributed to improvement of the Group’s financial performance. At the same time, introducing of a new offer arising from the new strategy employed by the Group in June 2014 increased the speed of acquiring new current account holders in Q2 2014 and the share of active and more profitable accounts in the client base.

1.5 MM  current accounts  in 2017 31.12.2014: 997,000

60%C/I 31.12.2014: 65.3%

15% ROE in 2017  2014: 10.5% ROE

This, along with cost optimization measures, significantly improved the Group’s efficiency and performance.

At the end of 2014 the number of consumers and microenterprises served amounted to 1.43 million, which meant a slight growth (by 0.5%) compared to December 2013. The number of current accounts served dropped by 20 thousand to 997 thousand.

Measures aimed at improving the Group’s efficiency, mainly cost optimization and process improvement, produced the assumed outcome and resulted in the historical best net profit of PLN 43.6 million, i.e. by PLN 7.6 million (21.1%) higher than in 2013.

This translated into net ROE improvement (from 9.6% in 2013 to 10.5% in 2014).

Revenue increase and the effective cost optimization policy allowed further improvement of Group’s cost/income ration from 71.3% in 2013 to 65.3% in 2014.
At the end of December 2014, the Group had 269 Microbranches, i.e. 13 more than a year before. During 2014, the target number and location of these outlets was verified in order to optimize their efficiency.

2. Development directions for 2015

In 2015 the Group will focus on further acquisition of clients and strategic management of client relations, increasing the scale of operations and efficiency of the sales network and improve the organization's efficiency and agility.

Client number increase targets (approx. 160 thousand in 2015) and those regarding achieving and maintaining high speed of acquiring current account holders (300 thousand accounts) shall be supported by a series of development initiatives. They will be implemented in areas of crucial importance for the achievement of determined strategic objectives, including products and sales, development of the sales network, service quality and client relation management, implementation of e-commerce offer integrated with Poczta Polska, further efficiency improvement in Poczta Polska sales network.

One of the key initiatives of the Group with regard to sales and sales support is to implement Front-End tool in Poczta Polska network to allow real-time sales and performance of clients' orders.

The Group will further enhance its relations with clients. To this end, it will implement a CRM strategy including processes of activating and increasing transaction number, cross-selling and client retention.

As regards development of the sales and service network, at the end of 2015, the Group is going to have 304 own outlets including 285 Microbranches. Along with this process, Contact Center shall be developed, the hours of its operation extended so that it will work seven days a week. Further, the pilot program regarding a network of partner outlets, located mainly in trade malls, will be continued. This will be accompanied with further growth of Postal Financial Zones to reach the target number of 640. Further, strategic partnership of the Group and Poczta Polska shall be demonstrated in activities including synergic sales management and improvement of sales processes in the Group and in Poczta Polska, as well as integrated development and optimization of information technologies.

Business development will take the form of further growth of profit on banking operations, to be achieved through an increase in sales of consumer loans and product profitability, at the same time maintaining safe levels of capital and liquidity ratios.

Improved efficiency of operations is among the key initiatives of the Group for 2015. To this end, the Group will commence measures aimed at revenue increase, at the same time maintaining tight cost control through triggering sales of the most profitable products and focusing on most efficient business lines. At the same time, the Group shall aim at regular improvement of its operational efficiency, in particular through process optimization and simplification of organizational procedures.

The Group still aims at increasing its share capitals in the form of raising additional capital, but this depends on favorable market standing and a positive decision of its shareholders.

The Group’s ability to achieve the objectives determined for 2015 shall depend mostly on external conditions, in particular the economic growth seen in Poland.