Alior Bank Sa · GPW:ALR
Alior Bank Sa — Q4 2023 Earnings Presentation
47 slides from Alior Bank Sa's earnings presentation, Mar 4, 2024
Slide 1: Presentation of results for 2023
Presentation of results for 2023 Warsaw, February 28, 2024
Slide 2: Agenda
Agenda 1. Operating activities 2. Credit risk 3. Financial results 4. Other issues 2
Slide 3: Operating activities
3 Operating activities
Slide 4: Record results of Alior Bank. Achieves the ability to pay dividends
Record results of Alior Bank. Achieves the ability to pay dividends. Total revenues (PLN mn) In 2023 revenues amounted to PLN bn 5.63 +1 268 mn +225 mn (+17%) • net interest income PLN bn 4.77 (+34% y/y) (+29%) • net fees and commissions PLN mn 838 (+5% y/y) In 4Q’23 revenues amounted to PLN bn 1.53
Slide 5: Record year for Alior Bank – improved profitability, quality, and quantity of loan portfolio
Record year for Alior Bank – improved profitability, quality, and quantity of loan portfolio Assets (PLN bn) Gross Loans (PLN bn) Gross Performing Loans* (PLN bn) +9% +5% +6% 90,1 65,1 59,4 62,1 82,9 56,0 2022 2023 2022 2023 2022 2023 C/I 4Q’23 NIM 4Q’23 ROE 4Q’23 COR 4Q’23 TCR 2023 36.6% 6.22% 26.1
Slide 6: Good quarter for the Retail Customer segment
RETAIL Good quarter for the Retail Customer segment CUSTOMERS In 4Q’23, Alior Bank launched an innovative marketing campaign with a broad range of communication. We achieved a record increase in Alior Pay sales by nearly 40% compared to 3Q’23 and a high NPS - 80% promoters of the new service. Alior
Slide 7: Growth of the Bank's key products – mortgage loans
RETAIL Growth of the Bank’s key products – mortgage loans* CUSTOMERS Sale of mortgage loans (PLN bn) Number of Customers with a mortgage loan (k) +446% +8% 2,50 +109% 2,07 76,5 80,8 2,00 75,0 74,7 75,1 1,50 0,99 1,00 0,60 0,50 0,38 0,39 0,00 4Q 22 1Q 23 2Q 23 3Q 23 4Q 23 4Q 22 1Q 23 2Q 23 3Q 23 4Q 2
Slide 8: Significant share in the 2% Safe Mortgage program
RETAIL Alior Bank has a significant share in the 2% Safe Mortgage program CUSTOMERS 2% Safe Mortgage In the last months of 2023, Alior Bank maintained a high level of interest in the offering and significantly increased the volumes of new sales. BK2% APPLICATIONS VOLUME OF POSITIVE SHARE OF BK2% IN
Slide 9: Growth of the Bank's key products – cash loans
RETAIL Growth of the Bank’s key products – cash loans* CUSTOMERS Sales of loans (PLN bn) Number of Customers with a loan (k) +4% -2% -7% 1,60 1,69 1,49 1,38 392 390 392 391 385 1,32 4Q 22 1Q 23 2Q 23 3Q 23 4Q 23 4Q 22 1Q 23 2Q 23 3Q 23 4Q 23 Gross consumer loan portfolio (PLN bn) Market -4% share We
Slide 10: Growth of the Bank's key products – Consumer Finance loans
RETAIL Growth of the Bank’s key products – Consumer Finance (CF) loans CUSTOMERS Sales of CF loans (PLN bn) Number of CF Customers (k) +62% +12% +34% 1 537 1 367 1 372 1600 1,91 1400 1 282 1 318 1200 1,42 1,18 1,17 1000 800 0,73 600 400 200 0 4Q 22 1Q 23 2Q 23 3Q 23 4Q 23 4Q 22 1Q 23 2Q 23 3Q 23 4Q
Slide 11: Effective establishment of a lasting relationship with Customers
RETAIL Effective establishment of a lasting relationship with Customers CUSTOMERS Number of Individual Customers (mn) Number of accounts “Konto Jakże Osobiste” (k) +5% +20% 761 732 4,36 4,20 700 4,16 4,10 4,14 670 636 4Q 22 1Q 23 2Q 23 3Q 23 4Q 23 4Q 22 1Q 23 2Q 23 3Q 23 4Q 23 Number of motorway jou
Slide 12: Growing importance of digital channels
RETAIL Growing importance of digital channels CUSTOMERS Users of Alior Bank mobile applications (k) Number of wire transfers initiated in the Alior Mobile application (mn) +16% +24% 16,8 1 200 1 042 1 081 15,2 15,5 968 1 006 14,3 1 000 928 13,5 800 600 400 200 0 4Q 22 1Q 23 2Q 23 3Q 23 4Q 23 4Q 22 1
Slide 13: Very good results of the Business Customer segment
BUSINESS Very good results of the Business Customer segment CUSTOMERS NEW CREDIT LIMIT Y/Y REVENUE AFTER COST OF NPL Y/Y RISK Y/Y +21% +6% -1.5 p.p. PLN bn 10.8 in 2023 * • 4.5% market share in sales (the highest in 3 years); 4.0% in 2022 • increase in market share in sales in all commitment ranges
Slide 14: Upward trend in key efficiency indicators
BUSINESS Upward trend in key efficiency indicators CUSTOMERS Share of automatic decisions in new sales (Small segment) % of orders executed remotely Sales of transaction products (units) +19 p.p. +24 p.p. 4x 67% 69% 61% 63% 59% 57% 48% 50% 2 261 48% 45% 557 IV kw.22 4Q 22 I kw.23 1Q 23 II kw.23 2Q 2
Slide 15: Improvement in portfolio structure with increase in market share
BUSINESS An improvement in the portfolio structure with a simultaneous increase in market share CUSTOMERS Balance of assets (Small/Medium/Large) in regular servicing (PLN bn) Balance of assets (Small/Medium/Large) in collection* (PLN bn) +2% -12% 10,9 2,4 2,4 2,3 2,2 10,7 2,1 IV kw.22 4Q 22 IV 4Qkw.
Slide 16: Alior Bank – Digital Leader
Alior Bank – Digital Leader New look and personalization of Alior Mobile BLIK for micro business customers BLIK for the self-employed who use the Alior Mobile application. The service enables fast, convenient, and secure BLIK code The mobile application has advanced to the next level of payments on
Slide 17: First large-scale migration of Data Warehouses to the public cloud
Trailblazing and first large-scale migration of Data Warehouses to the public cloud by a financial institution in Poland IMPLEMENTATION OF THE STRATEGY INNOVATIVENESS EFFICIENCY AND COMPETITIVENESS Alior Bank, in cooperation with its The migration of the Data Analyzing customers' digital partners Te
Slide 18: Innovative offer
Innovative offer BLIK FOR BUSINESS CUSTOMERS PLUSES OF PLUS CARD Alior Bank has made BLIK Alior Bank will reimburse available to the self-employed entrepreneurs up to PLN 1 000 who use the Alior Mobile app. for purchases at petrol They can pay with a BLIK code stations paid for with a Plus on the In
Slide 19: Social responsibility of Alior Bank
Social responsibility of Alior Bank Financing of thermal modernization ONA („SHE”) • Alior Bank has introduced an investment loan • A prophylactic and developmental for the renewable energy grant. initiative for women bankers. • The loan can be used for the purchase, • Among others the following wer
Slide 20: ESG activities at Alior Bank
ESG activities at Alior Bank Selected activities in 4Q’23 Environment Social Governance • We have prepared an • We organized an ESG week • We joined the ESG operationalization of the – a series of meetings and Sustainalytics rating. In 2023-2024 strategy in the workshops for our January 2024 we achi
Slide 21: External stakeholders appreciate the changes in Alior Bank
External stakeholders appreciate the changes in Alior Bank The upgrade of the rating outlook to The title of Top Employer Poland 2023 "Positive" by Fitch Ratings Ltd. awarded by the Top Employers Institute. confirms the Bank's very good standing. The title of Trustworthy Employer for achievements in
Slide 22: Credit risk
22 Credit risk
Slide 23: Stable and secure position: capital and liquidity surplus above regulatory minimum
Stable and secure position of the Bank: capital and liquidity surplus significantly above the regulatory minimum TIER I* 17,15% 15,86% Very high TIER I and TCR capital ratios at the end of 2023, which 14,26% 14,16% significantly exceed regulatory minimums by 850 bps (PLN bn 4.2) 13,06% 12,63% 12,43%
Slide 24: Portfolio quality increases and cost of risk decreases
Alior Bank consistently increases portfolio quality and decreases cost of risk Alior Bank Group – cost of risk Alior Bank Group – NPL ratio 2500 2,39% 2,80% 14,48% 2000 13,16% 1,60% 1,51% * 1500 1,35% 11,77% 0,98% 1000 1 733 9,80% 1 437 500 1 007 950 8,58% 625 0 2019 2020 2021 2022 2023 2019 2020 20
Slide 25: Changes in credit portfolio management have brought tangible results
Changes in credit portfolio management have brought tangible results Impaired loans (PLN bn) NPL reserve coverage ratio* Cost of Risk - CoR** 1,57% 10,00% 9,80% 9,80% 7 1,61% 9,45% 9,39% 9,50% 6 0,95% 0,96% 9,00% 54,1% 54,0% 8,58% 53,7% 53,7% 6 53,1% 5,89 5,88 8,50% 5,69 5,75 0,47% 5,30 8,00% 5 4Q 2
Slide 26: Financial results
26 Financial results
Slide 27: Income statement
Income statement PLN mn 4Q 22 4Q 23 % y/y y/y 2022 2023 % y/y y/y Total Income 1 307,7 1 532,6 17% 224,9 4 363,8 5 632,2 29% 1 268,4 Net interest income 1 139,1 1 289,2 13% 150,1 3 559,9 4 772,4 34% 1 212,5 Net fee and commission income 183,2 240,5 31% 57,3 796,1 837,5 5% 41,4 Other income -14,6 2,9
Slide 28: Increase in interest margin due to lower financing costs
Increase in interest margin due to lower financing costs and lower impact of hedging Interest income and expenses (PLN mn) Interest margin and financing cost* +25% +2% -2% 7 394 6,22% 1 821 6,05% 6,16% 1 812 1 835 1 887 1 851 5,92% 5,81% 5 915 1 647 11 525 355 408 401 423 416 One-off items*** 997 Ot
Slide 29: Bank consistently improves its net fees and commissions income
The Bank consistently improves its net fees and commissions income Net Fees and Commissions Income (PLN mn) +31% +5% +40% 241 216 838 Bank accounts, transfers, cash 209 44 796 -5% y/y operations (net) 41 183 19 +6% y/y 169 41 172 178 Bancassurance (net) 24 +10% y/y 42 43 87 22 +20% y/y 62 79 16 +3%
Slide 30: Operational efficiency maintained despite inflationary cost pressure
The Bank is maintaining operational efficiency, despite inflationary pressure on costs Operating costs (PLN mn) C/I ratio** 0% +27% +25% 1 980 1 977 C/I normalized*** 562 62 59 - 37,9% 505 65 38,1% C/I reported 214 259 442 463 98 58 448 - 1 8 1 68 242 65 62 185 -1% y/y 550 66 35,0% 36,6% 426 122 121
Slide 31: Main financial targets of the strategy
The main financial targets of the strategy „Your Bank of everyday life, your Bank for the future” Profitability 2023 ACT 2024 ROE 26.3% >13% C/I 35.1% <45% Equity Tier 1 17.2% >13.5% TCR 17.8% >15% Credit risk CoR 0.98% <1.6% NPL 8.58% <10% 31
Slide 32: 2023 – our successes
2023 – our successes Record assets: PLN bn 90 Business Performing loan portfolio: PLN bn 59.4 The first large bank in Poland in the public cloud Decrease in the cost of risk ratio: to CoR 0.98% Risk Decrease in non-performing loans ratio: NPL 8.58% Change in the structure of the loan portfolio - inc
Slide 33: Other issues
33 Other issues
Slide 34: 2023 provides a good starting point for recovery
2023 provides a good starting point for recovery 2023 was weak, but inventory adapted In the second half of 2023 real wage growth supported consumption GDP growth (real, %, y/y) and its structure (p.p.) Job market in the enterprise sector, Poland 12 10 10 6,9 5,4 4,7 5,3 8 5 6 0,2 4 0 -2,7 2 0 -2 -5
Slide 35: Decreasing inflation allowed for first rate cuts in CEE region
Decreasing inflation allowed for the first rate cuts in the CEE region The global economy is far from recession… … but deflation in industry supports reduction of inflationary pressures... 125 GDP (4Q19=100, seas. adj.) 50 PPI (%, y/y) 120 115 40 110 30 105 20 100 95 10 90 0 85 80 -10 4Q19 2Q20 4Q20
Slide 36: In 2024 - consumption, in 2025 - investment
In 2024 - consumption, in 2025 - investment In 2024, consumption should support the rebound in GDP Facilitated by among others strong growth in real wages GDP growth (y/y) with main components (y/y) Job market 10,0 6,9 16 8,0 5,1 6,0 4,1 14 3,3 4,0 12 2,0 0,2 10 0,0 -2,0 -2,0 8 -4,0 6 -6,0 4 2020 20
Slide 37: One-offs affecting reported results of Alior Bank Group
One-offs affecting reported results of Alior Bank Group Impact on Impact on 2022 (PLN mn) gross profit net profit 1Q Non-financial assets write-off related to the operations of Bank's branch in Romania -31 -31 -27 -27 2Q Joining the Protection Scheme (IPS) -195 -195 -158 -158 Provision for cost of c
Slide 38: Alior Bank's investment services
Alior Bank’s investment services Alior Bank’s Brokerage House Alior TFI 4Q’23 was the best in 2023 in terms of commissions result. Both in 4Q’23 and throughout 2023 Alior TFI achieved high growth of The result of the entire year is similar to that of 2021-2022 assets under management (AuM). At the e
Slide 39: Activities of Alior Leasing
Activities of Alior Leasing Sale of lease and loans (PLN bn) Number of customers (k) Lease and loans portfolio (PLN bn) +9% -6% +11% +3% -9% -3% +23% 74,3 +32% -25% +28% 68,3 69,9 +8% 6,0 5,8 6,0 -16% 3,0 2,8 63,3 5,4 2,7 55,4 5,0 2,3 2,2 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 2019 2020 2
Slide 40: Gross structure of the loan portfolio
Gross structure of the loan portfolio Loan portfolio in total (PLN mn) Retail Customer Segment (PLN mn) Business Customer Segment* (PLN mn) +5% +7% +2% +1% +4% -4% 38 046 39 718 65 060 37 230 26 375 62 072 64 421 4 369 5 039 24 842 25 342 4 328 6 509 6 106 6 463 26 375 25 342 24 842 15 985 16 999 18
Slide 41: Bank adjusts its deposit portfolio to market situation
The Bank adjusts its deposit portfolio to the current market situation (PLN mn) Structure of net liabilities to Customers Net liabilities structure - Retail Segment Net liabilities structure - Business Segment +6% +2% +18% +3% +3% +5% 70 777 72 868 75 187 2 649 51 071 50 635 51 929 23 258 1 289 2 17
Slide 42: Consolidated statement of the financial standing of the Alior Bank Group
Consolidated statement of the financial standing of the Alior Bank Group (PLN mn) 4Q 22 1Q 23 2Q 23 3Q 23 4Q 23 % q/q q/q % y/y y/y Total assets 82 877,2 84 325,2 83 527,5 86 320,5 90 134,1 4% 3 813,6 9% 7 257,0 Cash and cash equivalents 2 584,1 4 578,0 3 167,6 3 819,9 2 539,3 -34% -1 280,6 -2% -44,
Slide 43: New sale of loans
New sale of loans (PLN mn) Sales in the Business Customer Segment* +27% +45% 3 069 2 833 2 891 2 432 2 414 2 276 1 197 2 196 2 082 2 103 691 1 424 1 999 1 525 1 823 628 1 137 754 +1% y/y 603 1 455 1 194 1 516 886 562 1 741 1 872 1 568 1 409 1 220 1 328 1 277 1 113 1 366 +80% y/y 893 909 760 1Q 21 2Q
Slide 44: Additional information
Additional information Employment (FTEs) Alior Bank’s branches +155 +2% -13 +79 -2% +1% -2 -0% 7 150 7 229 534 526 524 523 521 7 074 7 055 7 041 519 519 482 482 488 188 187 186 183 180 71 67 110 70 72 6 482 6 504 6 482 6 560 6 644 346 339 338 340 341 4Q 22 1Q 23 2Q 23 3Q 23 4Q 23 4Q 22 1Q 23 2Q 23 3
Slide 45: Alior Bank S.A. - quotations, shareholding structure, ratings
Alior Bank S.A. - quotations, shareholding structure, ratings Alior Bank’s share price compared to WSE indices (comparable data for 12 months) 80 Alior Bank share price : PLN 76.34 (data as of December 29, 2023) Capitalization: PLN bn 10.0 70 Value of shares in free float: PLN bn 4.4 +122.8% y/y P/B
Slide 46: Contact
Contact Contact data Investor Relations and Subsidiaries Supervison Department Address details e-mail: ir@alior.pl Alior Bank S.A. Investor Relations and Subsidiaries Supervision Department ul. Łopuszańska 38D 02-232 Warsaw Poland More information Following events: • 1Q’24 results – April 25, 2024 W
Slide 47: Disclaimer
Disclaimer This data has been prepared by Alior Bank S.A. (“Bank”, “Company”) solely for the purpose of the Presentation. Any and all data that may constitute a projection for the Company’s future economic and financial results, contained in this presentation, has been prepared based on the Report o