Alior Bank Sa · GPW:ALR
Alior Bank Sa — Q3 2018 Earnings Presentation
44 slides from Alior Bank Sa's earnings presentation, Nov 8, 2018
Slide 1: Alior Bank S.A. Q3 2018 Results Presentation
Alior Bank S.A. Q3 2018 RESULTS PRESENTATION November 8th 2018
Slide 2: Agenda
Agenda Key highlights Digital Disruptor strategy implementation Operational performance 2018 guidance Appendix 2
Slide 3: Key highlights 1/2
Key highlights 1/2 • Record revenue level (PLN 2,950 M) for 3 quarters of 2018 - an increase of 9% y/y. • Net interest income for 3 quarters of 2018 at PLN 2,281 M - increase by 7.9% y/y. Both NII and NIM improved q/q (PLN 781 M vs. PLN 763 M and 4.64% vs. 4.58% respectively). • Increase of net inco
Slide 4: Key highlights 2/2
Key highlights 2/2 • Significant extension of cooperation with BGK resulting in an increase of micro segment guarantees (up to approximately 75% in new sales) allows for a significant improvement in asset quality and further optimization of capital ratios. • Loan book growth for 3 quarters of 2018 a
Slide 5: High quality service and offering confirmed by awards received in Q3'18
High quality service and offering confirmed by awards received in Q3'18 DISTRIBUTION & MARKETING INNOVATION AWARDS - EFMA & ACCENTURE 1st place in the "Offering Innovation" category for the current account „Jakże Osobiste” THE BEST BANK FOR BUSINESS ACCORDING TO FORBES 1st place in the "Corporate-fr
Slide 6: Key financial ratios
Key financial ratios NIM* C/I* Increase in net interest margin... ...and a declining cost base... 4.53% 4.58% 4.61% 47.1% 45.0% 44.0% 1kw.'18 2kw.'18 3kw.'18 CoR* ROE* ...with CoR in line with expectations... ...allows to maintain high profitability. 11.1% 11.9% 11.5% -1.8% -1.7% -1.8% 6 *YTD
Slide 7: Loan portfolio structure change on track to achieve strategic targets
Loan portfolio structure change on track to achieve strategic targets Loan portfolio structure [%] 31 30 29 28 Retail 20 20 20 20 7 6 5 7 11 16 15 15 7 9 8 7 Business 11 6 7 13 7 10 9 8 5 8 1 3 7
Slide 8: Continous growth of loan volumes in strategic segments
Continous growth of loan volumes in strategic segments New sales - micro* [PLN B] New sales - leasing* [PLN B] New sales – cash loans [PLN B] Temporary drop in new sales in Q3’18 resulted from focus on secured lending. Share of Maintaining high leasing sales... ...and strong cash loan sales. secured
Slide 9: Rapidly growing share of BGK secured loans in micro segment
Rapidly growing share of BGK secured loans in micro segment leads to a rapid increase in the level of collateral BGK secured loans in micro loan portfolio Share of new sales of BGK secured loans in micro loan portfolio A significant part of the micro segment loan portfolio is secured by BGK guarante
Slide 10: Agenda
Agenda Key highlights Digital Disruptor strategy implementation Operational performance 2018 guidance Appendix 10
Slide 11: Key elements of the Digital Disruptor strategy
Key elements of the Digital Disruptor strategy Strengthening relationships with customers We will constantly adapt our products and services to the changing needs of customers to help them in everyday life and solve their problems. Digitalization We will lead our customers through the technological
Slide 12: Retail segment: growing number of customers and sales of relational products
Retail segment: growing number of customers coupled with increased sales of relational products Increase in the number of customers Sales of relational products [number of customers in M] [sale of CA in T] 47.8 3.99 38.5 37.2 3.94 3.90 Q1'18 II kw. 2018 III kw. 2018 I kw. 2018 II kw. 2018 III kw. 20
Slide 13: Retail segment: growing share of savings accounts and remote processes
Retail segment: growing share of savings accounts and further development of remote processes in a cash loan offering Savings account: volume increase Cash loan sales in remote processes [savings accounts balance in PLN B] [sales of CL in remote processes in PLN M] 14.6 277 253 12.9 233 11.6 I kw. 2
Slide 14: Business segment: growing share of business loans in automated processes
Business segment: growing share of business loans in automated processes and new customers acquired online Automated credit processes New customers acquired online [limit New Sales in PLN M] [New Accounts] Share of the total acquisition in business segment [%] Share of the total acquisition in busin
Slide 15: Robot factory will enable further automation and efficiency enhancement
Robot factory will enable further automation and efficiency enhancement 2020 TARGET 118 robotic processes Launching "ROBOT FACTORY" • 33 processes already implemented • Further 21 processes in place for implementation in Q4’18 • Each process allows to release resources at an average level of 1.5-2 F
Slide 16: RBL_START – 1st edition of Alior Bank's Acceleration Program
RBL_START – 1st edition of Alior Bank’s Acceleration Program THE 1ST EDITION STARTUPS 12/09 Hello Day Workshops with experts Testing solutions on the Sandbox API platform Individual work with business mentors Cooperation with the KNF Innovation Hub PARTNERS OF THE PROGRAM London Bootcamp Meetings wi
Slide 17: Open Banking – portal for developers
Open Banking – portal for developers Portal for developers and Sandbox ALIOR BANK LAUNCHED IN OCTOBER ITS PORTAL FOR DEVELOPERS AND SANDBOX Firstly participants of Alior’s Acceleration Program were given access to the sandbox In the sandbox we published API resulting from PSD2 Access to account info
Slide 18: Consistent, dynamic development of the Bancovo loan platform in Q3 2018
Consistent, dynamic development of the Bancovo loan platform in Q3 2018 Consistent expansion of the offer - starting cooperation with 3 further Partners in Q3, currently 9 financial institutions cooperating with Bancovo, plan: 11-12 until the end of 2018. Implementation of the free "check your score
Slide 19: First FinTech investment in PayPo
First FinTech investment in PayPo PayPo Potential - Key elements Customer Journey Attractive business model and growing target market • Deferred payments: „buy now, pay later”; Attractive payment option both for merchants and clients • Niche on the polish market yet widely adopted in the global mark
Slide 20: Agenda
Agenda Key highlights Digital Disruptor strategy implementation Operational performance 2018 guidance Appendix 20
Slide 21: Q3'18 bottom line decomposition (PLN M)
Q3’18 bottom line decomposition (PLN M) QTD [PLN M] 982 100 107 411 271 781 52 75 173 -6 21
Slide 22: Income statement – key financials
Income statement – key financials PLN M Q3 2018 Q2 2018 ch. q/q (%) ch. q/q (PLN M) Net interest income 781 763 2.5 18.9 Net fee and commission income 107 105 1.1 1.2 Trading result 100 108 -7.0 -7.6 The result on derecognition of financial assets and liabilities not measured at fair value through 1
Slide 23: Volumes and ratios
Volumes and ratios PLN M 30.09.2018 31.12.2017 change (PLN M) change (%) Loans 53 505 51 267 2 238 4.4 Deposits 60 099 57 657 2 442 4.2 Total equity 6 494 6 691 -197 -2.9 Total assets 71 371 69 516 1 855 2.7 % (quarterly) Q3’18 Q2’18 ch. q/q (p.p.) ch. q/q (%) ROE 10.7 12.6 -1.9 -15.1 ROA 1.0 1.1 -0
Slide 24: Deposits - increase in current deposits in both segments (PLN B)
Deposits - increase in current deposits in both segments (PLN B) Bank L/D = 89.0% Term deposits, securities issued, other Current deposits +1.7 (+4.3%) 36.6 39.3 40.9 14.0 14.1 14.1 Retail 22.6 25.1 26.9 L/D = 70.6% 31.12.2017 30.06.2018 30.09.2018 -1.2 (-6.0%) 21.1 20.4 19.2 Business 11.6 11.5 10.0
Slide 25: Stabilization of liquidity position allows for NIM improvement
Stabilization of liquidity position allows for NIM improvement LCR ratio Required level 130% 127% 132% 100% 124% 31.12.2017 31.03.2018 30.06.2018 30.09.2018 Cost of financing* 1.22% 1.22 % 1.20 % 1.15% 1.18% All data presented on a quarterly basis. 25 *Cost of financing: interest expense excl. cost
Slide 26: Capital ratios at a safe level over regulatory minimum
Capital ratios at a safe level of over 100 bps above regulatory minimum Tier 1 TCR 15.4% 15.3% 12.2% 12.1% Regulatory Regulatory minimum minimum 13.13% 11.13% 30.06.2018 30.09.2018 30.06.2018 30.09.2018 The current level of TIER1 and TCR ratios provides a comfortable buffer above the regulatory mini
Slide 27: Profitability
Profitability NIM* 4.5% 4.6% 4.6% 1kw'18 2kw'18 3kw'18 CoR* -1.8% -1.7% -1.8% NIM – CoR* 2.8% 2.8% 2.8% 1kw'18 2kw'18 3kw'18 27 *YTD
Slide 28: Fees and commission breakdown (PLN M)
Fees and commission breakdown (PLN M) +1.2 Net F&C (+1.1%) bancassurance 105 107 payment and credit cards servicing brokerage fees +11.6 fees related to C/A, loans, transfers (+5.8%) 200 211 15.3 22.8 F&C income 65.6 62.4 19.3 17.5 102.8 105.6 F&C expenses -10.5 (+11.1%) -94.4 -104.9 28
Slide 29: Loan portfolio structure (PLN B)
Loan portfolio structure (PLN B) [net value] 52.7 53.5 Other 3.8 4.4 Investment loans 8.4 8.3 Business Business 45.8% 46.0% Operating loans 12.0 11.9 Consumer finance loans 2.3 2.4 Mortgage loans 10.0 10.2 Retail Retail 54.2% 54.0% Consumer loans 16.2 16.4 Q2'18 Q3'18 29
Slide 30: Key credit risk ratios
Key credit risk ratios Market average* Business Retail Mortgage NPL total ratio +0.4 +0.3 +0.6 13.5% 13.9% 10.8% 11.4% 11.4% 11.7% +0.1 8.9 11.2 2.7 2.4% 2.5% 30.06.2018 30.09.2018 30.06.2018 bez 30.09.2018 bez 30.06.2018 30.09.2018 30.06.2018 30.09.2018 OZE* OZE* NPL coverage ratio 48.8% 50.9% 68.6
Slide 31: Agenda
Agenda Key highlights Digital Disruptor Strategy implementation Operational performance 2018 guidance Appendix 31
Slide 32: Maintaining 2018 guidance
Maintaining 2018 guidance Actual Q3’18 YTD 2018 guidance 2020 target NIM 4.6% 4.6% 4.5% net interest margin C/I* 44.0% 44% 39% cost/income CoR 1.8% 1.8% 1.7% cost of risk Gross loan book 4.0 PLN B 5.5-6.0 PLN B 5.0 – 6.0 PLN B growth** *Cost/Income ratio: numerator – costs (excl. banking tax), denom
Slide 33: Agenda
Agenda Key highlights Digital Disruptor Strategy implementation Operational performance 2018 guidance Appendix 33
Slide 34: Polish macro outlook
Polish macro outlook GDP growth (% y/y) Inflation (CPI % y/y) 4.9 4.6 2.0 1.7 3.8 3.3 2.9 0.0 -0.6 -0.9 2014 2015 2016 2017 2018P 2014 2015 2016 2017 2018P NBP reference rate (%) Unemployment rate (%) 11.4 9.7 8.2 6.6 5.9 2.0 1.5 1.5 1.5 1.5 2014 2015 2016 2017 2018P 2014 2015 2016 2017 2018P 34 Sou
Slide 35: Income statement
Income statement PLN M Q3’18 Q2’18 Interest income* 995 991 Interest expense -214 -228 Net interest income 781 763 Fee and commission income 211 200 Fee and commission expense -105 -94 Net fee and commission income 107 105 Net gain (realized) on other financial instruments 100 108 Net gain on discon
Slide 36: Balance sheet snapshot
Balance sheet snapshot PLN M 30.09.18 31.12.17 Cash and balances with the Central Bank 2 189 965 Financial assets 12 122 13 643 Derivative hedging instruments 52 88 Amounts due from banks 844 902 Loans and advances to customers 53 505 51 267 Assets pledged as collateral 342 409 Property, plant and e
Slide 37: New loans sales
New loans sales Retail loans (new sales per quarter) Other retail 2 720 2 994 2 832 2 878 2 928 Mortgages 35 39 49 63 37 301 351 363 348 Consumer loans 331 2 353 2 658 2 441 2 466 2 517 09.2017 12.2017 03.2018 06.2018 09.2018 Business loans (new quarterly sales) 4 477 4 327 Other 3 160 1 170 3 166 1
Slide 38: Alior Bank shareholding
Alior Bank shareholding Largest free float among Polish financial institutions PZU SA and PZU SFIO UNIVERSUM 31.91% Other Shareholders 49.33% 7.25% 5.84% AVIVA OFE AVIVA BZ WBK 5.66% Nationale-Nederlanden OFE BlackRock Inc 38 *based on the number of shares registered on AGM held on June 22, 2018 and
Slide 39: Alior Bank – number of customers (T)
Alior Bank – number of customers (T) +344 (+9.0%) 3 980 4 071 4 125 4 178 3 834 Consistent increase in the number of customers 39 .
Slide 40: Alior Bank Group – FTE evolution
Alior Bank Group – FTE evolution -7.4% 8 905 349 8 477 8 401 8 345 8 248 367 341 374 442 8 556 8 110 8 004 8 027 7 807 Alior Bank Subsidiaries 40
Slide 41: Alior Bank branches
Alior Bank branches Number of branches 914 905 883 874 864 Branches 269 267 253 244 221 Agencies 645 638 630 630 643 41
Slide 42: Disclaimer
Disclaimer This document has been prepared by Alior Bank S.A. (the “Bank”) solely for use at the Presentation. Any forward looking statements concerning future economic and financial performance of the Bank contained in this Presentation are based on the consolidated financial statements of the Alio
Slide 43: Contact details
Contact details Please direct all inquiries to: relacje.inwestorskie@alior.pl +48 22 417 3860 IR unit head: Piotr Bystrzanowski piotr.bystrzanowski@alior.pl 43
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