Alior Bank Sa · GPW:ALR
Alior Bank Sa — Q1 2020 Earnings Presentation
52 slides from Alior Bank Sa's earnings presentation, May 6, 2020
Slide 1: Presentation of Q1 2020 Financial Performance
Alior Bank SA Presentation of Q1 2020 Financial Performance Alior Bank S.A. | 6 May 2020 | Consolidated performance of the Group
Slide 2: Agenda
Agenda 1 Key issues 2 COVID-19 impact on Bank's operations 3 Operations 4 Financial performance 5 Credit risk 6 Appendices 2
Slide 3: Key issues
Key issues 3
Slide 4: Key issues
Key issues Stable liquidity position at a very high level. In Q1 2020 net profit totalled PLN 73 M. In Q1 2020 LCR was at the level of 147%. Material impact of the ECJ rulling on the cost The estimated positive impact in the following reimbursement of early repayment of consumer months resulting fro
Slide 5: Q1 2020 financial performance (PLN M)
Q1 2020 financial performance (PLN M) Net result Income -11 -12 1 026 1 015 225 (-1%) 213 52 (-5%) wpływ wyroku ECJ ruling TSUE impact 64 38 BGF contributions dotyczącego zwrotu concerning fees prowizji* return* 170 -74 impact 137 122 89 pozostałe przychody Other revenues (-7%) ECJ ruling impact con
Slide 6: Key financial ratios in Q1 2020
Key financial ratios in Q1 2020 NIM ROE 7.39% 4.70% 4.69% -0.36 p.p. 0.35% -2.09 p.p. 3,05% ECJ ruling impact ECJ ruling impact concerning fees 6,43% concerning fees 4.34% return* return* 4,34% Q1'19 Q1'20 Q1'19 Q1'20 C/I COR 49.9% +0.7 p.p. 50.6%** 3.2% 1.86% +0.07 p.p. 1.93% ECJ ruling impact conc
Slide 7: Growth of credit volumes in strategic segments (PLN bn)
Growth of credit volumes in strategic segments (PLN bn) (management accounting data) New sales in Micro New sales of mortgage Sales of new lease New sales of loans segment loans contracts Upward trend in the new sales in the ...paralleled by stable sales …and lease contracts… …and lower demand Micro
Slide 8: Bank's stable position: the largest ever TIER1 buffer
Bank's stable position: the largest ever TIER1 buffer exceeding regulatory minimum thresholds TIER1 and TCR capital ratios at the end of Q1 2020 leave buffers above regulatory minimum thresholds of 444 b.p. PLN 2,223 M and 502 b.p. PLN 2,514 M respectively. Capital position Liquidity - LCR TIER 1 14
Slide 9: Development of remote channels: safety and comfort
Development of remote channels: safety and comfort + Photo ID Electronic signature Clients' comfort Identification method enabling Implementation of electronic Enabling cash payments in remote verification of the Client’s signature for Bank personnel 1,300 outlets of the Polish Post identity with no
Slide 10: Major distinctions and awards received in Q1 2020
Major distinctions and awards received in Q1 2020 Quality of customer service Support for Businessmen Innovativeness and Technology • Third place in the "Institution of the Year • The Sales Leader Award granted by Bank • The "Personality of the Year" title for 2019" ranking in the categories: "Best
Slide 11: COVID-19 impact on Bank's operations
COVID-19 impact on Bank's operations 11
Slide 12: Bank operations in the times of epidemic (1/2) – Operational activities
Bank operations in the times of epidemic (1/2) – Operational activities Taking care for the safety of our personnel … …we take care for our Clients. 3,2 thous. ~96% personnel members work of own Branch Offices opened remotely The Bank provided its personnel with the necessary Personal Protection Equ
Slide 13: Bank operations in the times of epidemic (2/2) – We take care for our Clients
Bank operations in the times of epidemic (2/2) – We take care for our Clients Measures taken to ensure Charitable activities: Client safety PLN 2 M of anti-COVID-19 aid • Changes in advertising and sales • PLN 1 M for the Szczecin Provincial Hospital campaigns - promoting the use of remote for the p
Slide 14: COVID-19 – repayment holidays
COVID-19 – repayment holidays Retail Client Business Client Lease No. of repayment holidays granted 36 803 2 859 14 416 Share (%) of applications processed positively 95.4% 91% 99.8% Repayment holidays granted in volume terms (PLN M) 3 610 2 535 1 203 Share (%) of repayment holidays granted in the p
Slide 15: Impact of interest rate cuts and measures taken by the Bank
Impact of interest rate cuts on the performance and measures taken by the Bank Impact of interest rate cuts Measures taken by the Bank Income-side initiatives According to the published Current Report No. 14/2020, the Bank an increase of fee income share in new cash loan sales estimates the impact o
Slide 16: Operations
Operations 16
Slide 17: Effective building of a lasting relationship
RETAIL Effective building of a lasting relationship CLIENTS No. of retail Clients (M) No. of new savings and current accounts with a debit card ('000) +10% 169 thous. 31,1 31,5 27,8 4,19 25,2 24,5 4,11 4,10 4,15 4,02 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 No. of new savings and current accounts wit
Slide 18: Growing significance of digital channels
RETAIL Growing significance of digital channels CLIENTS Sales of cash loan via remote channels (PLN M) Users of Alior Bank's mobile applications ('000) +6% +60% 387 383 504 361 362 338 456 398 357 315 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Online sales of sav
Slide 19: Significant increase of Client satisfaction index
RETAIL Significant increase of Client satisfaction index CLIENTS Own branch NPS Relationship NPS +11 p.p. 64% 64% 68% 35% 63% 63% 28% 29% 27% 24% Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Partnership outlet NPS 86% 86% 85% 85% 84% We simplify communication with Clients 18
Slide 20: Micro clients: No. of clients up and improved relationship
SEGMENT MICRO Micro clients: No. of clients up and improved relationship MICRO No. of business Clients in Micro ('000) New business Clients in Micro segment ('000) +19% +12% 10.9 9.4 8.4 7.5 7.9 200 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 167 175 182 192 No. of Micro segment Clients paying Social Insuran
Slide 21: High coverage with guarantees of new sales transactions
SEGMENT High coverage with guarantees of new sales transactions MICRO Micro new sales coverage with BGK guarantees Micro portfolio coverage with BGK guarantees 92% 92% 93% 92% 88% 54% 54% 52% 49% 45% Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 • The coverage of sales of new
Slide 22: Business Clients: transformation of business Client base
BUSINESS Business Clients: transformation of business Client base into more active and sustainable CLIENTS relationships Business Clients: Small /Medium/Large* (No. of business Clients in '000) New business Clients -1.2 thous. -14% 352 379 335 279 301 33.2 32.9 32.8 32.4 32.0 Q1 '19 Q2 '19 Q3 '19 Q4
Slide 23: Sound level of new sales in Q1 2020
BUSINESS Sound level of new sales in Q1 2020 CLIENTS Limit of new sales* Limit of sales using automatic decision-making process (PLN M, small, medium and large segment) (M PLN, small, medium and large segment) 1 463 1 385 248 180 1 197 118 180 184 170 898 157 159 720 109 67 58 47 56 64 1 216 1 206 1
Slide 24: Offer related to EU and public funding with BGK bank
We have been developing our offer related to EU and public funding working jointly BUSINESS CLIENTS with the BGK bank The widest product offer on the market based on EU funding • intensive sales activities • de minimis loans worth more than • In Q1 2020 almost 1.5 thous. PLN 330 M granted guarantees
Slide 25: The Financial Shield of the Polish Development Fund (PFR)
The Financial Shield of the Polish Development Fund (PFR) at Alior Bank Alior Bank, as one of 17 banks, has been participating in the Government's Financial Shield for Businesses project from the very beginning and provides a complete on-line subsidy application process. PFR Financial PLN 25 billion
Slide 26: Financial performance
Financial performance 26
Slide 27: Profit and Loss Account - basic data
Profit and Loss Account - basic data PLN M Q1 2020 Q1 2019 Change y/y Change y/y (%) Financial income, including: 952 1 026 -75 -7% Net interest income 776 804 -28 -3% Net interest income excluding impact of the ECJ rulling* 840 804 36 4% Net fee and commission income 137 170 -32 -19% Trading and ot
Slide 28: Volumes
Volumes PLN M Q1 2020 Q1 2019 Change y/y Change y/y (%) Loans, of which: 56 518 55 394 1 124 2% retail segment 32 346 29 854 2 492 8% business segment 24 172 25 540 -1 368 -5% Deposits, of which: 64 596 62 327 2 269 4% retail segment 47 262 45 125 2 137 5% business segment 17 334 17 202 132 1% L/D r
Slide 29: Interest net income (PLN M)
Interest net income (PLN M) Comparison y/y Net interest income on a quarterly basis Q1’19 Q2’19 Q3’19 Q4’19 Q1’20 1 023 4.70% 4.70% 4.62% 4.51% 4.34% excluding impact of NIM* - 60 1,020 the ECJ rulling -5.9% 960 1.20% 1.17% 1.14% 1.12% 1.03% 112 COF** 108 -28 804 776 1 020 1 046 1 029 -3.5% 115 965
Slide 30: Net fee and commission income (PLN M)
Net fee and commission income (PLN M) Comparison y/y Net fee and commission income on quarterly basis 267 272 350 400 Remuneration for Wynagrodzenie insurance z tyt. pośrednictwa 305 308 24 25 brokerage ubezpieczeń 286 sprzedaży 267 27 272 300 26 23 65 85 Payment cards and credit 24 25 300 Obsługa k
Slide 31: Bank has maintained high level of cost efficiency (PLN M)
Bank has maintained high level of cost efficiency (PLN M) Operating expenses (comparison r/r) Operating expenses on a quarterly basis C/I* 49.9% 44.6% 42.8% 43.0% 50.6% -30 512 482 -6.0% Expenses excluding 391 382 390 393 393 122 89 impact of provisions release and BFG 59 61 contributions 107 98 BGF
Slide 32: Credit risk
Credit risk 32
Slide 33: Structure and quality of the loan portfolio
Structure and quality of the loan portfolio Total loan portfolio (PLN M) Retail Client portfolio (PLN M) Business Client portfolio* (PLN M) 26 801 27 135 62 198 34 519 35 063 61 320 2 019 8% 2 170 8% 2 820 8% 2 978 8% 4 888 18% 5 337 20% 27 135 44% 11 402 33% 11 747 34% 743 3% 756 3% 26 801 44% 6 76
Slide 34: Continuous improvement of the quality of new loan sales
Continuous improvement of the quality of new loan sales Sales volume and quality of new cash loans (PLN M) 2 500 5,0% 1 942 2 025 2 009 2 060 1 722 1 755 1 745 1 707 1 807 1 766 1 654 2 000 4,0% 1 623 Loan amount granted 1 500 1 262 1 242 1 269 3,0% Default rate MOB6 (6 1 000 1,91% 2,0% months af te
Slide 35: COVID-19: Portfolio by pandemic risk level
COVID-19: Portfolio by pandemic risk level Change of a turnover - April vs. February Low risk industries Medium risk industries High risk industries Low risk industries, resilient or gaining in Industries at risk due to disrupted supply Industries severally hit by economic importance, such as: produ
Slide 36: COVID19: Portfolio by pandemic risk level
COVID19: Portfolio by pandemic risk level Sensitivity of Business Client Sensitivity of Buisness Client Sensitivity of Business Client portfolio TOP 100 portfolio TOP 100 regular portfolio 12% 3% 14% 3% 14% Branże niskiego Low-risk ryzyka industries Branże średniego Medium-risk ryzyka industries 15%
Slide 37: COVID-19: Sensitivity of the cash loan portfolio
COVID-19: Sensitivity of the cash loan portfolio 2.4% Split of total cash loan portfolio share within low-risk industries 18.5% 48.4% 16.6% 79.1% 9.2% 4.9% low risk w Zatrudnienie Świadczenie pension Pozostałe źródła other income business Działalność branży niskiego industries emerytalne i dochodu s
Slide 38: COVID19: Changes of lending policy
COVID19: Changes of lending policy Area Scope of changes • Separation and blocking of new sales transactions to the Clients from directly affected industries Enhanced risk • Implementation of additional risk acceptance criteria for the Clients from indirectly affected industries, segments and • Diff
Slide 39: Appendices
Appendices 39
Slide 40: Number of Clients ['000]
Number of Clients ['000] +200 (+4.7%) 4 376 4 424 4 224 4 318 4 313 207 214 225 232 201 4 023 4 111 4 099 4 152 4 192 IQ1’19 kw.'19 II Q2’19 kw.'19 IIIQ3’19 kw.'19 IVQ4’19 kw.'19 I Q1’20 kw.'20 KIRetail Clients KB Business Clients 40
Slide 41: Alior Bank Group – Headcount
Alior Bank Group – Headcount -2.2% 8 269 8 288 8 159 8 143 8 086 509 503 505 519 529 7 760 7 785 7 654 7 624 7 557 IQ1’19 kw.'19 Q2’19 II kw.'19 IIIQ3’19 kw.'19 IVQ4’19 kw.'19 1Q’20 I kw.'20 Alior Bank Related companies 41
Slide 42: Alior Bank branch offices
Alior Bank branch offices -7.5% 855 858 832 820 791 215 214 213 212 207 640 644 619 608 584 IQ1’19 kw.'19 II kw.'19 Q2’19 IIIQ3’19 kw.'19 IVQ4’19 kw.'19 I kw.'20 Q1’20 Agencies Own branches 42
Slide 43: Safe Bank's capital position
Safe Bank's capital position (+) portfolio securitization 17bp (+) acceptance of the result of Q4 2018 35bp (-) increase of volume in Q2 2019 3bp (+) AMA2 33bp (-) 2nd tranche under IFRS9 25bp (+) acceptance of result of H1 2019 34bp (-) 3 tranche IFRS9 31 bp (-) volume up in Q1 2019 25bp (+) declin
Slide 44: Macroeconomic prospects
Macroeconomic prospects GDP growth (% y/y) Inflation rate (CPI % y/y) 4.9 5.1 4.1 3.4 3.1 3.0 2.0 2.3 2.0 1.7 -2.8 -0.6 2016 2017 2018 2019 2020P 2021P 2016 2017 2018 2019 2020P 2021P Actual change Average annual National Bank of Poland (NBP) reference rate (%) Unemployment rate (%) 8.2 8.9 6.6 7.2
Slide 45: Profit and Loss Account
Profit and Loss Account PLN M Q1 2020 Q1 2019 Interest income* 960 1 020 Interest expenses -184 -216 Net interest income 776 804 Fee and commission income 272 267 Fee and commission expense -134 -97 Net fee and commission income 137 170 Gains/losses on instruments carried at fair value 1 23 through
Slide 46: Balance Sheet
Balance Sheet PLN M 31 March 2020 31 Dec. 2019 Cash and cash equivalents 1 961 1 379 Receivables from banks 276 213 Investment financial assets 14 198 15 799 Measured at fair value through other comprehensive income 9 123 10 439 Measured at fair value through P&L Account 631 544 Measured at amortize
Slide 47: New loan sales (PLN M)
New loan sales (PLN M) Retail loans (new quarterly sales)* 3 313 3 371 2 965 3 037 2 875 486 489 378 457 473 557 570 765 1 155 Mortgage Kredyty loans hipoteczne 938 Kredyty Consumerratalne loans Pożyczka Cash loans 2 030 2 010 2 061 1 728 1 464 Q1’19 I kw.'19 Q2’19 II kw.'19 IIIQ3’19 kw.'19 IVQ4’19
Slide 48: Alior Bank Shareholding Structure
Alior Bank Shareholding Structure* 31.91%PZU SA Group 31.93% 53.70% Other Shareholders 7.25% AVIVA OFE 7.12% AVIVA Santander Nationale-Nederlanden OFE The largest free float among Polish financial institutions. 48 *Based on the number of shares registered at the Ordinary General Meeting of Sharehold
Slide 49: Impact of ECJ rulling on the Bank's performance
Impact of ECJ rulling on the Bank's performance PLN M Q3 2019 Q4 2019 Q1 2020 The method of estimating the Impact on the net interest income, of which: -45 -90 -64 provision for historical repayment takes into account: A decline in current interest income -17 -69 -64 • the number of complaints to da
Slide 50: Disclaimer
Disclaimer This document has been prepared by Alior Bank S A ("Bank", "Company”) solely for the Presentation purposes. Any forward looking statements concerning future economic and financial performance of the Bank contained in this Presentation are based on the Financial Report of the Alior Bank Gr
Slide 51: Contact details
Contact details Should you have any questions or querries do not hesitate to send them at: relacje.inwestorskie@alior.pl +48 723 684 995 51
Slide 52: Thank you for your attention
Thank you for your attention Presentation of Q1 2020 financial performance 52 Alior Bank S.A. | 28 February 2020 | Consolidated performance of the Group Alior Bank S.A. | 6 May 2020 | Consolidated performance of the Group