Bank Millennium opens a new chapter and presents the strategy of grow until 2028

The key goals by 2028 include: doubling corporate loans portfolio to over PLN25 billion, increasing the number of active retail customers to 3.7 million and achieving return on capital (i.e., ROE) of approx. 18%. The Bank plans to achieve these goals through a series of business initiatives supported by further digitization and implementation of technological innovations, improved operational efficiency and enhanced customer experience, all while maintaining cost discipline. Bank Millennium has the ambition to be the primary bank for its clients, offering customers the highest quality of services and innovative solutions.

• The bank is entering a new strategic cycle with a strong position in retail banking it has over 3 million active customers, a profitable business model and a solid capital position.
• The bank anticipates an improvement in the macroeconomic situation, it is forecasting stable GDP growth, low unemployment, rising disposable incomes, and a decrease in interest rates.
• In the corporate banking segment, the goal is to double the loan portfolio (to over PLN25 billion) and increase the number of business customers to over 50 thousand, thanks to an improved service and support model for business clients, the development of credit product offerings (e.g., investment loans, leasing, factoring), and the streamlining of the loan application and approval process.
• In the retail banking segment, the bank plans to increase the number of customers to 3.7 million and become the primary bank for 70% of them. This will be achieved through improved customer service (NPS), enhanced product offerings (especially investment and savings products), and further digitalization.
• The bank aims to achieve a return on capital of approx. 18% in 2028 while maintaining cost discipline (cost-to-income ratio at approx. 37%) and a low level of non-performing loans (i.e., NPL) below 4%. The return to dividend payments is planned from 2027, contingent on the regulatory environment.

We are entering the new strategic cycle from a strong position, ready to open the next chapter of dynamic growth and innovation. Our goal is to be the bank of first choice for individual clients and companies in Poland. We innovate by offering more and more services digitally, without forgetting the need to develop omnichannel processes at the highest level. The "Value & Growth" strategy underscores our commitment to creating value through business development. The motto also reflects a customer-centric approach to activities for consumers. Every day we provide valuable services, supporting the development and aspirations of customers, not only business, but also personal. As an organization that promotes the professional development of employees and focuses on key business objectives, we are well-positioned to achieve significant successes and generate growth and shareholder value — Joao Bras Jorge, President of the Management Board of Bank Millennium.

Entering a new strategic cycle

The strategy builds on the bank's achievements to date and focuses on further dynamic growth of the bank and increasing its value. Over the last few years, Bank Millennium has successfully tackled multiple challenges, including geopolitical tensions, high inflation, credit holidays and the negative impact from the legacy portfolio of FX mortgages. Despite these, the bank was able to achieve the ambitious targets set in the previous strategic plan, many of them well ahead of schedule, demonstrating its long-standing track record of successful execution.

Bank Millennium is entering the new strategic cycle from a position of strength in retail banking. It serves over 3 million active retail customers with a highly profitable business model and a stable capital position. The bank intends to continue leveraging its unique capabilities, such as a proven model for customer acquisition, best-in-class quality of service, and advanced digital technologies, to accelerate growth.

Expected macroeconomic outlook and their impact on Poland's banking sector

Forecasts of the Millennium Macroeconomic Bureau for the Polish economy for 2024-2028 are optimistic – expecting stable GDP growth, low unemployment, rising disposable income with interest rates to decrease and stabilize at approx. 3.5%. The banking sector is characterized by strong capital ratios and high liquidity. In the following strategic period, the bank expects significant market volume growth in both retail and corporate banking, particularly in corporate loans. Bank Millennium is well-prepared to capitalize on new growth opportunities.

Ambitions for 2028

Thanks to the growth in both the retail and corporate segments, the bank plans to achieve return on capital of approx.18% in 2028 while maintaining cost discipline (cost-to-income ratio at approx. 37%). The bank aims to achieve this by actively managing risk, keeping non-performing loans below 4%. It also plans to strengthen its capital position and return to dividend payments from 2027 (contingent on the regulatory environment).

Corporate banking goals

As part of the new strategy, the bank intends to strengthen its position in the large and mid-corporate client segment. The aim is to increase the customer base from approx. 9 thousand to over 17 thousand by offering tailored credit products such as leasing, factoring, and investment loans. In addition, the bank plans to foster primary relationships by further enhancing customer experience (maintaining top 3 position in corporate NPS), digitalization and leveraging advanced data analytics for decision-making. Additionally, the bank will upgrade the sales and service model and streamline the loan application and approval process. The bank also aims to more effectively support the growth of small businesses increasing the number of small business clients in portfolio from approx. 21 thousand to approx. 33 thousand, providing them with more flexible and tailored solutions, and transforming the service model.

Retail banking goals

The retail banking strategy assumes dynamic growth and an increase in the number of active retail customers from 3 million to 3.7 million. The bank plans to have over 95% of its customers be digitally active and to be the primary bank for 70% of them. These objectives will be achieved by maintaining a leading position in customer experience (strengthening top 3 position in retail NPS), further digitalization and implementation of new technological solutions (e.g., advanced hyperpersonalization of the offer). Furthermore, the bank plans to expand its product offering, particularly in investment and savings products, and focus on the needs of specific customer groups, including affluent customers and SOHO (sole traders).

Key enablers of further growth

The new growth strategy is based on five key enablers. Investing in new technology, which implies, strengthening existing systems in line with strategic priorities, developing artificial intelligence and cloud technologies. Improvement of the operating model and efficiency, including process automation and faster delivery of products and services. Strengthening compliance and risk management, i.e., mitigating legal and credit risks. Building on the foundations established during the current strategic cycle, we plan to continue implementing our sustainability goals, which include: Carbon Neutrality by 2030, Net Zero by 2050, further community engagement, and supporting our customers in their transition to a low-carbon economy with PLN5 billion in new sustainable finance origination.

Bank Millennium's HR strategy focuses on talent development in support of the key priorities of the business strategy, increasing the bank's attractiveness as a workplace (strengthening the position of "Top Employer") and keeping a competitive remuneration policy. It will also be important to adapt the organizational culture to the changes introduced by the new strategy and further digitize HR processes to improve the employee experience.

A bank ready for a new era of growth and innovation

Bank Millennium has proven its ability to thrive even when faced with adversity. Now, the bank is ready for the next chapter of bold growth and innovation. Poland’s economic prospects create an exciting backdrop for further expansion. The bank will seize the opportunities presented by the evolving banking landscape, strengthening its position in both retail and corporate banking. A relentless focus on technological development, digitalization, and customer experience will fuel its growth. While pushing for growth, the bank will continue to apply a strong cost discipline and to focus on risk management and capital solidity which will ensure a robust financial foundation and allow to deliver a significant increase in profitability.

For more information visit: www.bankmillennium.pl/en/about-the-bank/investor-relations.