Alior Bank Sa · GPW:ALR
Alior Bank Sa — H1 2022 Earnings Presentation
43 slides from Alior Bank Sa's earnings presentation, Aug 3, 2022
Slide 1: Presentation of results for 1H 2022
Alior Bank S.A. Presentation of results for 1H 2022 Warsaw, 3 August 2022
Slide 2: Agenda
Agenda 1. Operating activities 2. Financial results 3. Credit risk 4. Other issues 2
Slide 3: Operating activities
Operating activities 3
Slide 4: Once again Alior Bank managed to achieve very good financial results
Once again Alior Bank managed to achieve very good financial results Total revenues (PLN mn) PLN +307 mn +34% In 2Q 22 the revenues of the Alior Bank Group amounted to PLN 1.2 bn – these are the highest revenues in its entire history. In comparison to 2Q 21 the revenues increased by PLN 307 mn (+34%
Slide 5: Stable growth of the Bank, consistent improvement in efficiency
Stable growth of the Bank, consistent improvement in efficiency Assets (PLN bn) Loan volume gross (PLN bn) Deposits volume* (PLN bn) +7% +1% +4% 84,2 63,2 63,2 62,6 62,6 79,0 2Q 21 2Q 22 2Q 21 2Q 22 2Q 21 2Q 22 C/I 2Q 22 ROE 2Q 22 NIM 2Q 22 TCR 2Q 22 49,3% 15,9% 5,11% 13,99% +6,8 p.p. y/y +8,3 p.p.
Slide 6: Alior Bank – Digital Leader
Alior Bank – Digital Leader NEW STORE IN ALIOR MOBILE Personalisation of offers in mobile. Redesign of the offers tab in MOBILE DEPOSIT Alior Mobile, specification of personalised offers in the “Offer for you” tab and redesign of advertising placements on individual Implementation of a Mobile Deposi
Slide 7: Alior Bank supports Ukrainian citizens - socially and through an attractive product offer
Alior Bank supports Ukrainian citizens - socially and through an attractive product offer SOCIAL RESPONSIBILITY • The 10 units available to local authorities (Podlaskie, Lubelskie, Małopolskie, Dolnośląskie, Mazowieckie, Warmińsko-Mazurskie, Zachodniopomorskie and Śląskie) have an area of 11,800 m2.
Slide 8: Growth of the Bank's key products – mortgage loans
RETAIL Growth of the Bank’s key products – mortgage loans* CUSTOMERS Share in new sales Sale of mortgage loans (PLN bn) 4.55% Number of Customers with a mortgage loan (thousand) -27% +5% 1,40 1,20 0,90 0,94 0,88 75,5 76,0 75,8 1,00 0,80 0,67 0,66 74,1 0,60 72,3 0,40 0,20 0,00 2Q 21 3Q 21 4Q 21 1Q 22
Slide 9: Growth of the Bank's key products – cash loans
RETAIL Growth of the Bank’s key products – cash loans* CUSTOMERS Sale of loans (PLN bn) Number of Customers with a loan (thousand) -2% -17% 421 417 1,69 411 409 1,61 402 1,35 1,41 1,20 2Q 21 3Q 21 4Q 21 1Q 22 2Q 22 2Q 21 3Q 21 4Q 21 1Q 22 2Q 22 Gross consumer loan portfolio (PLN bn) • In the area of
Slide 10: Development of the Bank's key products - Consumer Finance loans
RETAIL Development of the Bank’s key products - Consumer Finance (CF) loans CUSTOMERS Sale of CF loans (PLN bn) Number of CF Customers (thousand) +8% -1% 1,52 1600 1400 1 353 1 303 1 367 1 324 1 337 0,91 0,97 0,91 0,99 1200 1000 800 600 400 200 0 2Q 21 3Q 21 4Q 21 1Q 22 2Q 22 2Q 21 3Q 21 4Q 21 1Q 22
Slide 11: Effective building of a lasting relationship with Customers
RETAIL Effective building of a lasting relationship with Customers CUSTOMERS Number of Individual Customers* (million) Number of accounts “Konto Jakże Osobiste” (thousand) -1% +27% 4,14 4,10 578 4,06 4,09 4,06 541 484 508 456 2Q 21 3Q 21 4Q 21 1Q 22 2Q 22 2Q 21 3Q 21 4Q 21 1Q 22 2Q 22 Number of moto
Slide 12: Growth in digital channels importance
RETAIL Growth in digital channels importance CUSTOMERS Users of Alior Bank mobile applications (thousand) Number of wire transfers ordered in the Alior Mobile application (million) +25% +24% 839 10,2 791 9,2 9,5 704 740 8,2 8,5 671 2Q 21 3Q 21 4Q 21 1Q 22 2Q 22 2Q 21 3Q 21 4Q 21 1Q 22 2Q 22 Structur
Slide 13: Increase in sales and effectiveness of the loan portfolio
BUSINESS Increase in sales and effectiveness of the loan portfolio ... CUSTOMERS Segment: Small / Medium / Large Micro segment Total credit limit granted (PLN bn) Total credit limit granted (PLN bn) +5% -18% 2,0 1,8 2,1 0,39 0,38 0,38 1,7 0,36 0,32 1,1 2Q 21 3Q 21 4Q 21 1Q 22 2Q 22 2Q 21 3Q 21 4Q 21
Slide 14: Simultaneous improvement of the portfolio composition and new sales
BUSINESS ... simultaneous improvement of the portfolio composition and new sales ... CUSTOMERS Balance of assets Small/Medium/Large in regular service (PLN bn) Share of new sales to preferred industries +5% +13 p.p. 28% 9,7 25% 20% 9,2 9,2 9,2 15% 14% 9,0 2Q 21 3Q 21 4Q 21 1Q 22 2Q 22 2Q 21 3Q 21 4Q
Slide 15: Further automation of credit and remote service processes
BUSINESS ... further automation of credit and remote service processes CUSTOMERS Remote service (Segments: Micro / Small / Medium / Large) Automated decisions (Segments: Small / Medium / Large) Sale of cards and auxiliary accounts New sales in automated decisions (PLN million) in BusinessPro Banking
Slide 16: Improved x-sell results and Customer transaction activity
BUSINESS Consequently, improved x-sell results and Customer transaction activity CUSTOMERS Number of actively used cards (thousand) Number of cashless transactions with payment cards (million) +20% +4% 3,2 101,8 3,0 2,9 2,8 98,3 98,1 99,6 101,1 2,7 2Q 21 3Q 21 4Q 21 1Q 22 2Q 22 2Q 21 3Q 21 4Q 21 1Q
Slide 17: Financial results
Financial results 17
Slide 18: Income statement
Income statement PLN mn 2Q 21 2Q 22 % y/y y/y 1H 21 1H 22 % y/y y/y Total Income 892,7 1 199,8 34% 307,1 1 784,1 2 293,0 29% 508,9 Net interest income 666,7 971,8 46% 305,1 1 336,8 1 834,1 37% 497,3 Net fee and commission income 183,4 220,6 20% 37,2 361,1 411,3 14% 50,2 Other income 42,7 7,4 -83% -3
Slide 19: The increase in market interest rates has a positive effect on the NII
The increase in market interest rates has a positive effect on the NII Interest income and expenses (PLN mn) Interest margin and financing cost* 00,0 +64% +88% 5,11% 3 800 2 395 +29% 4,58% 00,0 314 1 349 4,01% 3,77% 00,0 3 300 187 3,58% 1 046 1 463 824 126 00,0 174 Interest Cost 2 800 718 750 84 2 0
Slide 20: Increase in customer transactions improves commission income
Thanks to the increase in customer transactions, the Bank is improving its commission income Result on fees and commissions (PLN mn) +20% +14% +16% 411 221 216 361 93 Payment and credit cards service 190 191 +5% y/y 183 +7% y/y (net) 49 49 89 43 Other fee/provision cost and 48 45 -9% y/y income (net
Slide 21: Growing operating costs, improving efficiency
Despite the growing pressure of increasing operating costs, the Bank is improving its efficiency Operating costs (PLN mn) C/I ratio** +56% +20% +36% 591 1 084 - Employee C/I normalized*** - expenses 493 195 195 49,3% +25% y/y C/I reported General and 97 -100% y/y 797 97 administrative 379 394 391 78
Slide 22: Pursuit of the updated "More than a Bank" strategy 2021 – 2022
Pursuit of the updated “More than a Bank” strategy 2021 – 2022 2020 2021 1-2Q 2022 Goal 2022 Assets PLN 78.6 bn PLN 83.0 bn PLN 84.2 bn PLN 89.0 bn Business Number of Individual 4.2 mn 4.1 mn 4.1 mn 4.5 mn volumes Customers Number of Business 251 k 258 k 257 k 278 k Customers ROE -4.7% 7.7% 13.8% >5
Slide 23: Credit risk
Credit risk 23
Slide 24: Improvement in loan portfolio quality and decreasing cost of risk
Noticeable improvement in the quality of the loan portfolio accompanied by decreasing cost of risk Impaired loans (PLN bn) NPL reserve coverage ratio* Cost of Risk - CoR** 14,00% 12,96% 9 12,75% 1,71% 13,00% 9 1,58% 11,77% 1,54% 12,00% 11,31% 8 1,46% 10,70% 11,00% 8 56,25% 1,33% 55,87% 55,92% 55,81%
Slide 25: Change in credit policy has enabled sustained reduction in cost of risk
The change in credit policy has enabled a sustained reduction in the cost of risk Alior Bank Group – Cost of Risk As a result of actions taken in 2020 and 2021 to manage the risk of the 2000 loan portfolio and due to the current customer behaviour, the level of 1800 3,96% Cost of Risk (CoR) in 2Q 22
Slide 26: Capital and liquidity surplus significantly above the regulatory minimum
Stable and secure position of the Bank: capital and liquidity surplus significantly above the regulatory minimum The levels of TIER I and TCR capital adequacy ratios as at the end of 2Q 22 significantly exceed the regulatory minimum by: 266 bps (PLN 1.3 bn) and 202 bps (PLN 1.0 bn), respectively TIE
Slide 27: Why Alior Bank?
Why Alior Bank? ▪ Innovation, digitisation, high quality of services for Customers ▪ Improvement of performance by increasing revenue and reducing costs ▪ Improvement in the loan portfolio quality ▪ Growing share of housing loans in the portfolio ▪ Negligible share of CHF housing loans in the portfo
Slide 28: Other issues
Other issues 28
Slide 29: In 2Q 22 there are signs of a slowing recovery
In 2Q 22 there are signs of a slowing recovery 2Q GDP starts to lose momentum… … inter alia as a result of rapidly tightening monetary policy… GDP growth (viable, %, y/y) and its structure (p.p.) 14,0 Interest rates in the CEE region (%) 10,0 Poland, Hungary, Czech Republic 12,0 5,0 10,0 0,0 8,0 6,0
Slide 30: Still in the European vanguard
Still in the European vanguard Polish economy still in the vanguard of the EU… …also in terms of price pressure… 110 GDP level (4Q 2019 = 100) EU HICP inflation, June 2022 (%, y/y) 105 25 100 20 95 15 UE 90 10 85 5 80 0 Niemcy Estonia Polska Węgry Cypr Holandia Szwecja Łotwa Bułgaria Irlandia Dania
Slide 31: Cyclical trend dampened by inflation, higher interest rates and external environment
Cyclical trend will be dampened by inflation, higher interest rates and deterioration in the external environment Consumption is the driver of economic growth Inflation will slow down only in 2024 GDP dynamics y/y with main components y/y in the years y/y price index and MPC interest rate in the yea
Slide 32: We have been successfully addressing climate-related challenges
We have been successfully addressing climate-related challenges We cooperate with: 21.5 PLN 880.7 PLN 1.2 bn thousand balance mn new Customers as at the end of volume of new eco- as at the end 2Q 22 sales at the end of 2Q 22 2Q 22 ECO OFFER in 2Q 22 #EKO category Eco-benefits to a credit Eco Loan Cl
Slide 33: Awards and prizes in 1H 2022 awarded to Alior Bank
Awards and prizes in 1H 2022 awarded to Alior Bank Celent Model Bank Awards 2022 “Institution of the Year” in “Customer Service” category. During the 7th edition of the competition, prizes were awarded in as many as 6 categories: The jury recognised the organisation • “Best service in remote channel
Slide 34: Alior Bank's investment services
Alior Bank’s investment services Alior Bank’s Brokerage House Alior TFI In the first half of 2022, inter alia, as a result of the war in In 4Q 21 and 1H 22, as a consequence of rising interest rates, Ukraine, especially in 1Q 22, we observed increased the market saw significant outflows from debt fu
Slide 35: Activities pursued by Alior Leasing
Activities pursued by Alior Leasing Sale of lease and loans (PLN bn) Number of customers (in thousand) Lease portfolio and loans (PLN bn) +9% -2% +63% +23% 74,3 73,0 68,3 1,5 -30% +58% 6,0 6,0 55,4 5,4 5,0 1,1 0,9 3,9 35,1 1H 20 1H 21 1H 22 2018 2019 2020 2021 1H 22 2018 2019 2020 2021 1H 22 Quarter
Slide 36: Gross structure of the loan portfolio
Gross structure of the loan portfolio – noticable increase in the share of housing loans (PLN mn) Loan portfolio in total Retail Customer Segment Business Customer Segment* +1% +3% -2% 0% -1% 1% 38 571 38 245 62 596 63 357 63 234 37 005 25 592 24 786 24 988 4 250 4 195 3 814 6 012 6 198 6 217 25 592
Slide 37: Bank adjusts its deposit portfolio to the current market situation
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 +4% +7% -1% 0% +1% 70 741 -1% 67 833 70 780 2 419 2 244 49 335 1 377 46 451 49 591 21 382 21 4
Slide 38: Consolidated statement of the financial standing of the Alior Bank Group
Consolidated statement of the financial standing of the Alior Bank Group (PLN mn) 2Q 21 3Q 21 4Q 21 1Q 22 2Q 22 % q/q q/q % y/y y/y Total assets 79 035,1 78 201,9 83 048,4 84 649,7 84 223,5 -1% -426,3 7% 5 188,4 Cash and cash equivalents 1 566,4 1 645,3 3 763,4 4 989,9 4 940,2 -1% -49,6 215% 3 373,9
Slide 39: New sale of loans
New sale of loans (PLN mn) Sales in the Business Customer Segment* -1% +16% 2 729 2 432 2 414 865 2 196 2 082 691 1 818 1 823 628 1 619 1 137 754 1 363 666 603 1 455 541 436 562 1 864 1 741 1 568 1 152 1 220 1 328 1 277 927 1 078 893 IQ 20 IIQ 20 IIIQ 20 IVQ 20 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 2Q 22 No
Slide 40: Additional information
Additional information Employment (FTEs) Alior Bank’s branches -449 -6% -105 -267 -15% -4% -37 7 540 7 442 694 665 -6% 7 432 7 357 633 626 481 476 484 7 091 589 479 195 194 222 210 193 192 211 210 484 190 51 51 180 34 41 23 6 837 6 745 6 749 6 668 448 6 426 420 406 393 376 2Q 21 3Q 21 4Q 21 1Q 22 2Q
Slide 41: 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) Alior Bank share price : 27.20 PLN (data as at June 30, 2022) Capitalisation : 3.6 PLN bn 60 Value of shares in free trade : 1.8 PLN bn P/BV**: 0.7x 50 P/E**
Slide 42: Contact
Contact Contact data Investor Relations Department Address details e-mail: ir@alior.pl Alior Bank S.A. Investor Relations Department ul. Łopuszańska 38D 02-232 Warsaw Poland More information Website Following events: Facebook fanpage • 3Q 2022 results – November 4, 2022 Twitter profile Youtube chann
Slide 43: Disclaimer
Disclaimer This data has been prepared by Alior Bank S.A. (“Bank”, “Company”) solely for the Presentation purposes. 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 of the