Alior Bank Sa · GPW:ALR
Alior Bank Sa — H1 2014 Earnings Presentation
38 slides from Alior Bank Sa's earnings presentation, Aug 7, 2014
Slide 1: Alior Bank S.A. 1H 2014 results presentation
ALIOR BANK S.A. 1H 2014 results presentation August 7, 2014 1
Slide 2: Agenda
AGENDA • Highlights • Operational Performance • Strategic Initiatives • Other issues • Outlook • Appendix 2
Slide 3: Agenda
AGENDA • Highlights • Operational Performance • Strategic Initiatives • Other issues • Outlook • Appendix 3
Slide 4: Highlights
HIGHLIGHTS NIM Pricing policy centralization resulted in NIM recovery. 1H’14 NIM 4,7% vs 4,5% in Q1’14. Growth and Profitability • +PLN 947 m of loans (+4,5%) in Q2'2014 • Cost of risk increase to 230 bps accompanied by increase in profitability (as announced post-Q1 results) T-Mobile T-Mo
Slide 5: Key financials
KEY FINANCIALS M PLN 1H'14 1H'13 (A/B)-1 (%) Q2'14 Q1'14 (D/E)-1 (%) A B C D E F Net interest income 575 462 25 304 271 12 Net fee and commission income 167 116 45 84 84 0 Trading result & other 141 146 -3 78 63 25 Operating income 884 723 22 466 417 12 General Administrative Expenses -449 -401 12 -
Slide 6: Agenda
AGENDA • Highlights • Operational Performance • Strategic Initiatives • Other issues • Outlook • Appendix 6
Slide 7: Net interest margin
NET INTEREST MARGIN Alior NIM development 4,7% 4,7% 4,6% 4,6% 4,5% Q1-Q2'13 Q1-Q3'13 Q1-Q4'13 Q1'14 Q1-Q2'14 NIM formula: NII for Q1’14 and Q2’14 annualized divided by average IEA from Q4’13 and Q2’14. NIM in selected Polish banks (Alior, Millennium, mBank, BZWBK , Pekao – Q2’14, other - Q1’14) 4,7%
Slide 8: Loan book development and financing
LOAN BOOK DEVELOPMENT AND FINANCING Loan book split L/D = 102% in PLN m 21 883 RETAIL L/D=85% +26% 209; 1% Other business Deposits Loans 551; 3% Factoring 64% 54% 3 659; Investment 14 224 13 804 17 370 17% loans 13 073 354; 2% Term, own 6 848 11 798 banking sec., 642; 4% 46% 8 360 8 941 other 2 649;
Slide 9: Maintaining favorable trend in growing current account retail deposits
MAINTAINING FAVORABLE TREND IN GROWING CURRENT ACCOUNT RETAIL DEPOSITS Significant and still increasing number of salary accounts % of salary accounts Q2 2014 43,7% 29,1% 16,9% Q2'14 ARBO customers Non-ARBO customers Total retail customers ARBO – „Alior Rachunki bez opłat” – customers utilizing bran
Slide 10: Fee income performance
FEE INCOME PERFORMANCE Fee income split (in PLN m, structure) 141 139 18 125 11 other 115 116 11 13 transfers, payments pay-offs 13 13 12 12 accounts servicing 19 10 11 11 15 loans and advances 12 16 8 14 8 8 9 39 42 bancassurance 34 38 29 payment and credit cards 29 29 32 servicing 25 27 brokerage
Slide 11: Credit risk overview
CREDIT RISK OVERVIEW NPL total (%) Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 10,2 10,7 8,9 9,4 8,4 8,8 8,4 Market avg.* 6,7 6,9 6,5 10,9 12,8 3,2 1,3 1,5 2,0 2,3 2,5 Corporate Retail Mortgage Coverage ratio (%) Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 60 61 63 56 58 59 59 58 48 46 Market avg.* 47 68 49 18 17 15 15 14 Corp
Slide 12: Strong capital position allows for continuous profitable growth
STRONG CAPITAL POSITION ALLOWS FOR CONTINUOUS PROFITABLE GROWTH 14,0% 8,0% 13,0% 7,0% 12,0% 12,7% 12,1% 6,0% 11,0% 11,1% 11,0% 11,2% 5,0% 10,0% 4,0% 9,0% 3,0% 8,0% 7,0% 1,2% 1,0% 1,0% 1,1% 1,1% 2,0% 1,0% 6,0% 5,0% 0,0% Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 ROE ROA 14,0% 20,0% 13,5% 18,0% 12,0% 12,8% 12,8% 1
Slide 13: On track to capture 4% market share by 2016
ON TRACK TO CAPTURE 4% MARKET SHARE BY 2016 Deposits MARKET SHARE Loans 2,6% 2,6% 2,5% 2,4% 2,5% 2,2% Q2'13 Q4'13 Q2'14 Q2'13 Q4'13 Q2'14 Deposits MONTHLY GROWTH (%) Loans Total Retail Corporate Total Retail Corporate ALIOR Market ALIOR Market ALIOR Market ALIOR Market ALIOR Market ALIOR Market JAN
Slide 14: Alior remains a top pick for increasing number of customers
ALIOR REMAINS A TOP PICK FOR INCREASING NUMBER OF CUSTOMERS Customer acquisition on track Current accounts growth Q1’14 vs. Q1’13 (ths) +96 +116 +191 Alior Bank 299 +188 2 330 +151 2 119 2 234 Getin Noble 228 120 1 928 119 118 2 210 1 740 117 2 115 1 589 113 2 000 BZ WBK 181 108 1 811 1 627 1 481 Pe
Slide 15: Wide range and diversified distribution network
WIDE RANGE AND DIVERSIFIED DISTRIBUTION NETWORK 4th largest distribution network in Poland 855 849 830 759 221 219 109 528 16 438 441 417 414 304 230 208 208 209 217 216 Q4'11 Q1'12 Q1'13 Q1'14 Q2'14 Branches Agencies Alior Express T-Mobile outlets 15
Slide 16: General and administrative expenses
GENERAL AND ADMINISTRATIVE EXPENSES HR costs NHR costs Severance in PLN m and special bonus 11 +8,3% 82 76 other 12 10 advisory services 3 5 4 telecommunication 4 7 BFG 129 8 11 marketing 118 5 8 IT 9 buildings 34 37 maintenance Q1'14 Q2'14 Q1'14 Q2'14 High effectiveness of Alior marketing spend: 50
Slide 17: Agenda
AGENDA • Highlights • Operational Performance • Strategic Initiatives • Other issues • Outlook • Appendix 17
Slide 18: T-Mobile banking services current status
T-MOBILE BANKING SERVICES CURRENT STATUS May 4th 2014 – beginning of offering products under the brand: T-Mobile financial services provided by Alior Bank Business developement 58 thsd. customers acquired in three months (85% without previous relationship with Alior Bank). Products offer current
Slide 19: T-Mobile banking services outlook
T-MOBILE BANKING SERVICES OUTLOOK Ambitious targets for the future Acquisition of ~2 M clients within 5 years • 16 M strong T-Mobile client base • Synergies in T-Mobile distribution and marketing Strong profitability • Targeted ROE in year 3 of 16% growing to ~40% in year 5 Developing joint capabili
Slide 20: Consumer finance performance
CONSUMER FINANCE PERFORMANCE Increasing X-sell volumes form CF customers Instalment loans average monthly volumes (PLN m) 2014-01 2014-02 2014-03 2014-04 2014-05 2014-06 648,4 663,2 679,0 684,9 673,7 675,1 -0,6% X-sell average monthly volumes (PLN m) 2014-01 2014-02 2014-03 2014-04 2014-05 2014-06 1
Slide 21: Agenda
AGENDA • Highlights • Operational Performance • Strategic Initiatives • Other issues • Outlook • Appendix 21
Slide 22: Other issues
OTHER ISSUES • On July 15, 2014 Alior Bank received a written statement from KNF (the regulator) identifying no irregularities concerning a share sale of Luxco company on October 1, 2013. 22
Slide 23: Agenda
AGENDA • Highlights • Operational Performance • Strategic Initiatives • Other issues • Outlook • Appendix 23
Slide 24: 2014 outlook
2014 OUTLOOK Growth Loan growth > PLN 400 m net monthly NIM ~4,7% Costs C/I 2014 below 50% Risk CoR 2014 –2,3% (2,2% previously) 24
Slide 25: Agenda
AGENDA • Highlights • Operational Performance • Strategic Initiatives • Other issues • Outlook • Appendix 25
Slide 26: Income statement snapshot
INCOME STATEMENT SNAPSHOT in PLN m Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14 Interest income 376 370 357 415 392 429 Interest expense -155 -130 -118 -117 -121 -125 Net interest income 222 240 239 298 271 304 Dividend 0 0 0 0 0 0 Fee and commission income 104 115 116 141 125 139 Fee and commission expense
Slide 27: Balance sheet snapshot
BALANCE SHEET SNAPSHOT Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14 Cash and balances with Central Bank 729 722 755 1 067 1 078 1 057 Financial assets held for trading 215 265 234 243 208 285 Financial assets available for sale 3 259 3 447 2 929 3 389 3 172 2 784 Hedging derivatives 0 0 3 12 21 16 Receivable
Slide 28: Shareholding
SHAREHOLDING Free float 18.3m shares - 26,2% Entities controlled by Carlo Tassara Group 38.2m shares - 54,7% 5.6m shares - 8,0% Market free float European Bank for Reconstruction and Development 3.85m shares - 5,5% 3.9m shares - 5,6% Genesis Asset Managers LLP Wellington Management Company LLP Manag
Slide 29: Continued strong loan growth across each segment
CONTINUED STRONG LOAN GROWTH ACROSS EACH SEGMENT Retail loans (new production per quarter) 1 621 125 1 489 1 374 Other retail 1 271 1 314 74 1 189 370 61 Mortgages for 1 129 72 54 1 039 74 342 423 real estate 74 260 322 891 95 247 229 70 196 134 1 126 Cash loans 868 939 938 971 992 748 826 687 Q2'12
Slide 30: Employees
EMPLOYEES Persons 6 154 6 512 6 500 6 413 5 720 4 873 5 049 2 388 2 485 2 253 2 405 2 187 1 745 1 748 3 749 4 027 4 112 4 160 3 128 3 301 3 533 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Outlets Headquaters FTEs 6 157 6 237 6 240 5 712 5 185 4 345 4 633 2 444 2 351 2 202 2 303 2 094 1 684 1 814 3 713
Slide 31: Retail driven, stable revenue structure
RETAIL DRIVEN, STABLE REVENUE STRUCTURE Net revenue split before impairment charges (%) 1H’13 1H’14 Treasury Treasury 2% 7% Business 37% Business 33% Retail Retail 60% 61% 31
Slide 32: Effective marketing communication
EFFECTIVE MARKETING COMMUNICATION Share of actual Share of spend effective spend BANK 1 26 BANK 2 26 BANK 3 BANK 4 20 22 ALIOR BANK 5 12 18 BANK 6 12 BANK 7 13 10 BANK 8 7 5 6 5 BANK 9 4 4 43 4 Total GRPs* 30 611 Q4’13 % * 30 sec equivalents 32 SOURCE: MILLWARD BROWN SURVEY
Slide 33: Polish macro outlook
POLISH MACRO OUTLOOK GDP growth (% yoy) Investments and private consumption (% yoy) 4,5 3,9 Private 10,6 Investments 3,3 consumption 4,5 3,2 2,6 2,1 2,3 0,8 0,9 1,9 0,2 1,6 1,6 -0,8 -2,4 -1,8 2009 2010 2011 2012 2013 2014F 2009 2010 2011 2012 2013 2014F Inflation (CPI % yoy) Unemployment rate (%) 4,
Slide 34: Polish macro outlook
POLISH MACRO OUTLOOK NBP reference rate (%) WIBOR 3M (%) 4,50 4,99 4,25 4,27 4,13 3,50 3,50 3,95 2,50 2,50 2,71 2,70 2009 2010 2011 2012 2013 2014F 2009 2010 2011 2012 2013 2014F End of period End of period FX rate (EUR/PLN) Fiscal policy (% of GDP) 4,46 Public debt 30 57,2 60 56,2 55,6 25 54,9 4,15
Slide 35: Polish banking sector – growth of the main balance sheet figures
POLISH BANKING SECTOR – GROWTH OF THE MAIN BALANCE SHEET FIGURES Assets Loans +4,2% +5,2% +6,0% +5,5% 1 479 1 429 1 407 1 444 1 401 1 350 1 374 966 993 972 1 002 1 026 936 945 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 May'14 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 May'14 Equity Deposits +5,6% +3,2% +3,3% +3,6
Slide 36: Polish banking sector – main P&L lines performance
POLISH BANKING SECTOR – MAIN P&L LINES PERFORMANCE NII NFC Result on banking activity 34,5 13,7 55,5 +13% 10,5 +3% 24,9 41,4 9,3 -2% 7,0 14,1 27,8 16,3 8,2 3,5 13,7 3,4 Q1'13 Q2'13 Q3'13 Q4'13 Q1'13 Q2'13 Q3'13 Q4'13 Q1'13 Q2'13 Q3'13 Q4'13 X - Q1’14 Expenses Net impairment Net profit 30,2 8,5 +2% 1
Slide 37: 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 37
Slide 38: 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 Company contained in this Presentation are based on Financial Statement of the Bank for 1H 2014. B