Alior Bank Sa · GPW:ALR
Alior Bank Sa — H1 2021 Earnings Presentation
47 slides from Alior Bank Sa's earnings presentation, Aug 4, 2021
Slide 1: Presentation of results for H1 2021
Alior Bank S.A. Presentation of results for H1 2021 Warsaw, 4 August 2021
Slide 2: Agenda
Agenda 1. Key issues 2. Operating activities 3. Credit risk 4. Financial results 5. Appendices 2
Slide 3: Key issues
Key issues 3
Slide 4: In H1 2021, the Alior Bank Group generated PLN 232 million net profit
Once again Alior Bank managed to achieve very good financial results In H1 2021, the Alior Bank Group generated PLN 232 million net profit PLN 124 million net profit in Q2 2021 Superb sale of housing loans • ROE for Q2 2021 was 7.6% Q2 2021 saw the sale of housing loans amounting • C/I for Q2 2021 w
Slide 5: Thanks to operational efficiency, the Bank improves its results
Thanks to an increase in operational efficiency, the Bank effectively improves its results Despite the unfavourable external environment, A stable growth of the loan portfolio, combined with an increase in operational efficiency, the Bank improves its financial results serves as the basis for furthe
Slide 6: 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 The levels of TIER I and TCR capital adequacy ratios as at the end of Q2 2021 significantly exceed the regulatory minimum by: 449 bps. (PLN 2,167 million) and 445 bps. (PLN 2,150 million)
Slide 7: We successfully address climate-related challenges
We successfully address climate-related challenges “Refund for eco-purchases #ECO category with a Credit Card” We cooperate with in the MasterCard Specials Refund of up to PLN 600 for eco-purchases Customers with a credit card issued during the promotion 391.3 loyalty programme may receive up to PLN
Slide 8: Building the Sustainable Development Strategy
We are continuing to work on building the Sustainable Development Strategy In the process of developing the environmental and social awareness of employees, the Bank initiated activities related to ecology and the impact on the natural environment. Selected CSR activities at Alior Bank: Eco Challeng
Slide 9: Modern products and high standards of service are appreciated by the market
Modern products and high standards of service are appreciated by the market Gazeta Bankowa Awards Golden Banker In the competitions organised by • “Cash loan” – first place “Gazeta Bankowa” Alior Bank was • “Credit card” – second place awarded three titles: • “Personal account” – third place • Bank
Slide 10: Alior Bank S.A. – price performance, shareholders, ratings
Alior Bank S.A. – price performance, shareholders, ratings Alior Bank’s share price compared to WSE indices (comparable data for 12 months) Alior Bank share price: PLN 33.33 (data as at 30 June 2021) 34 Capitalisation: PLN 4.4 billion 104.7% r/r Value of shares in free trade: PLN 2.2 billion 29 C/WK
Slide 11: Pursuit of the updated More than a Bank strategy 2021–2022
Pursuit of the updated “More than a Bank” strategy 2021 – 2022 2020 Performance for H1 2021 Goal 2022 Assets PLN 78.6 billion PLN 79.0 billion PLN 89 billion Business Number of Individual 4.2 million 4.1 million 4.5 million volumes Customers Number of Business 239K 245K 278K Customers ROE -4.7% 7.1%
Slide 12: Operating activities
Operating activities 12
Slide 13: Increase in sales of key products of the Bank
PERSONAL Increase in sales of key products of the Bank CUSTOMERS Sale of mortgage loans (PLN billion) Number of Customers with a mortgage loan (K) +34% +12% 0,96 72,3 0,87 0,90 70,5 0,67 0,75 69,0 67,2 64,8 IIQ 20 IIIQ 20 IVQ 20 IQ 21 IIQ 21 IIQ 20 IIIQ 20 IVQ 20 IQ 21 IIQ 21 Sale of loans (PLN bill
Slide 14: Demand in the mortgage market and continued high sale of mortgage loans
PERSONAL Alior Bank takes advantage of the demand prevailing in the mortgage market CUSTOMERS and continues high sale of mortgage loans Sales of housing loans (PLN million) +45% 1 200 +35% Q2 2021 saw Alior Bank 1 800 1 000 +21% achieving a 4.1% share in 1 600 the sale of loans for 1 400 800 residen
Slide 15: Building lasting customer relationships and growing digital channels
PERSONAL Effective building of a lasting relationship with Customers and the growing importance CUSTOMERS of digital channels Users of Alior Bank mobile applications (K) Number of Customers with systematic incomes (K) +23% +2% 977 977 977 671 616 630 585 971 544 962 IIQ 20 IIIQ 20 IVQ 20 IQ 21 IIQ 2
Slide 16: Expanding the offer, developing digital channels, improving service
PERSONAL We continue to expand our offer, develop digital channels and improve customer service CUSTOMERS Launch of the “Clean Air” offer ECO Cash-back on the Credit Card Launch of the loan offer with a subsidy from the National Fund Cash-back promoting purchases with EKO partners for Environmental
Slide 17: Increase in Customer satisfaction
PERSONAL Building a lasting business relationship thanks to the increase in Customer satisfaction CUSTOMERS NPS distribution network (%) Relationship NPS (%) (Bank’s internal survey) +8 p.p. 86 88 NPS average for banks = 25* 80 81 82 36 35 33 32 28 IIQ 20 IIIQ 20 IVQ 20 IQ 21 IIQ 21 IIQ 20 IIIQ 20 I
Slide 18: Positive trends in recovery in the Business Customer segment
BUSINESS Positive trends in recovering from the COVID-19 pandemic in the Business Customer CUSTOMERS segment Total overdraft facility granted to Total overdraft facility granted to Micro Small/Medium/Large Customers (PLN billion) Customers (PLN billion) +9% -14% -4% 2,4 +44% 0,41 0,39 2,0 0,36 0,32
Slide 19: Strengthening relationships and transactionality of Business Customers
Strengthening relationships and increasing the transactionality of Customers BUSINESS CUSTOMERS Number of Business Customers – all segments (K) Number of BankConnect Customers – Small/Medium/Large segments (K) +6% +12% 235 243 909 230 239 245 873 851 822 810 IIQ 20 IIIQ 20 IVQ 20 IQ 21 IIQ 21 IIQ 20
Slide 20: Participation in public programmes supporting entrepreneurs
Alior Bank participates in public programmes and effectively supports entrepreneurs BUSINESS CUSTOMERS Covering new sales with BGK guarantees – Covering new sales with BGK guarantees – Micro segment * Small segment* +2p.p. +14p.p. 99% 57% • 13% market share in sales 98% 50% 53% 98% of de minimis gua
Slide 21: Loan offer for entrepreneurs investing in green energy
Alior Bank is successfully developing a loan offer for entrepreneurs investing BUSINESS in green energy sources CUSTOMERS ▪ offer for financing renewable energy sources (RES) projects for professional energy producers ▪ financing as many as 13 ecological goals, for instance, purchase of photovoltaic
Slide 22: Subscription model products for Business Customers
We strengthen the relationship with Business Customers based on the products BUSINESS CUSTOMERS and services offered in the subscription model Offer for simplified accounting Offer for full accounting As part of the offer, the Customer receives: As part of the offer, the Customer receives: • PLN 0 a
Slide 23: Activities of the key companies of the Alior Bank Group
Activities of the key companies of the Alior Bank Group Alior Leasing Alior TFI Q2 2021 saw Alior Leasing achieving sales of PLN 808 Q2 2021 saw Alior TFI keeping the high level of net sales of million (94% more than in Q2 2020). the investment funds under its management and achieving sales of PLN 1
Slide 24: Very good results achieved by the Brokerage House
Very good results achieved by the Brokerage House Commissions of the Brokerage House (revenues) Commissions – brokerage account Initiatives and achievements [PLN million] [PLN million] • Yet another year in a row, our brokerage account +16% took the podium (1st place) in the ranking of the +27% 27,9
Slide 25: Credit risk
Credit risk 25
Slide 26: Structure of the gross loan portfolio
Structure of the gross loan portfolio – the share of the Retail Segment increasingly grows Loan portfolio in total (PLN million) Loan portfolio structure in total +1% +1% 61,710 62,346 62,462 62,055 62,596 57% 58% 59% 59% 59% 26 498 26 110 25 711 25 353 25 592 43% 42% 41% 41% 41% 35 213 36 236 36 75
Slide 27: Gross structure of the loan portfolio – increasing share of housing loans
Gross structure of the loan portfolio – we are increasing the share of housing loans Retail Customer Segment (PLN million) Business Customer segment* (PLN million) +5% -3% +1% +1% 36,236 36,751 36,702 37,005 26,498 26,110 25,711 25,592 35,213 25,353 3 382 3 900 3 903 3 814 3 096 5 434 5 483 5 657 5
Slide 28: Decrease in cost of risk and improvement in loan portfolio quality
Decrease in the cost of risk and a perceptible improvement in the loan portfolio quality Impaired loans (PLN billion) Provisions coverage ratio* Cost of risk (CoR; QTD pattern) 6,00% 11 15,15% Miliony 14,75% 5,00% 14,48% 10 13,81% 5,94% 4,00% 9 12,96% 3,00% 8 52,50% 53,55% 55,18% 54,45% 54,87% 2,00%
Slide 29: Effects of active management of the loan portfolio
Measurable effects of active management of the loan portfolio NPL write-off and sale improves the quality of the loan portfolio (PLN million) Cost of risk (CoR; QTD pattern) 885 Write-off 739 5,94% Sale 403 572 345 252 357 1,86% 1,71% 1,48% 1,59% 483 394 252 67 215 67 IIQ 20 IIIQ 20 IVQ20 IQ 21 IIQ
Slide 30: Further improvement in quality of loan portfolio
Further improvement in the quality of Alior Bank’s loan portfolio Following the periodic increase in DPD 30+ as a result of the COVID-19 situation, the Bank achieved a significant improvement in DPD ratios, which are now at a comparable level and even lower (better) than before the pandemic. PLN BIL
Slide 31: Financial results
Financial results 31
Slide 32: Income statement
Income statement PLN million IIQ 2020 IIQ 2021 % y/y y/y I-IIQ 2020 I-IIQ 2021 % y/y y/y Total Income 791,2 892,7 13% 101,5 1 741,4 1 784,1 2% 42,7 Net interest income 722,0 666,7 -8% -55,3 1 498,9 1 336,8 -11% -162,0 Net fee and commission income 154,6 183,4 19% 28,8 289,8 361,1 25% 71,3 Other inco
Slide 33: External environment affects net interest income
Demanding external environment affects the level of net interest income Interest income and expenses (PLN million) Interest margin and financing cost* 100,0 -20% -16% 4,00% 1,818 3 800 860 3,71% 3,63% 3,67% 3,58% 220 781 745 600,0 1,463 112 734 718 3 300 101 94 174 Interest Cost 96 81 100,0 2 800 Ot
Slide 34: Improving commission result
Thanks to undertaking a multitude of initiatives, the Bank is gradually improving its commission result Commission result by quarter (PLN million) Income and commission expenses (PLN million) +19% +17% +3% +9% Other fee and income costs 329 345 323 316 29 294 31 16 25 24 56 42 56 Costs of card and A
Slide 35: Improvement in commission income
The improvement in commission income is the result of, among others, attractive offer of the Bank and Customer satisfaction Commission result by increase (PLN million) Income and commission costs by increase (PLN million) +17% Other fee and income costs +25% 662 54 564 Costs of card and ATM 47 108 t
Slide 36: Improvement of cost effectiveness
Improvement of cost effectiveness – all categories of operating costs of Alior Bank Group decreased Cumulative expenses of operations (PLN million) Operating expenses by quarter (PLN million) -4% -9% -9% 395 408 418 877 24 380 379 24 63 797 23 15 113 59 78 109 59 56 57 Costs of Bank 120 Guarantee Fu
Slide 37: Why Alior Bank
The question: Why Alior Bank • Innovation, digitisation, high quality of services for Customers • Improvement of performance by increasing income and reducing costs • Improvement in the loan portfolio quality • Negligible share of CHF mortgage loans in the portfolio • High sensitivity of interest in
Slide 38: Other information
Other information 38
Slide 39: Recovery after the crisis with inflationary pressure in the background
Recovery after the crisis with inflationary pressure in the background Q1 2021 was the last with negative y/y dynamics Despite the pandemic, the recovery occurred already in Q1 2021 15 GDP level (Q4 2019=100, viable, seasonally adjusted), Poland GDP rate of growth (viable, %, y/y) with decomposition
Slide 40: Inflation phenomena are global
Inflation phenomena are global Annual decline in national GDP compared to the EU Not only did inflation accelerated in Poland... 103 6 CPI Inflation (%, y/y) GDP level (Q4 2019=100, viable, seasonally adjusted) 101 5 99 4 97 95 3 93 2 91 1 89 87 0 85 -1 4Q'19 1Q'20 2Q'20 3Q'20 4Q'20 1Q'21 2Q'21P Jun
Slide 41: Recovery places pressure on normalisation of monetary policy
The pace and nature of the recovery places pressure on the normalisation of monetary policy Deferred consumption as a driver of economic rebound Inflation will return to the NBP target GDP rate of growth along with its main components Y/y price index and MPC interest rate in the years 15 4,5 4,0 4,0
Slide 42: Adjusting loan and deposit portfolio to the market situation
The Bank adjusts its loan and deposit portfolio to the current market situation Structure of net liabilities to Customers (PLN billion) Structure of net amounts due from Customers (PLN billion) +3% +2% -1% +1% 65.9 65.9 66.9 68.6 67.8 2,0 1,4 55.7 56.0 56.2 56.3 57.0 2,8 3,1 1,7 4,0 3,5 6,3 6,0 6,0
Slide 43: New sale of loans
New sale of loans (PLN million) Sales in the Business Customer Segment* -11% 2,729 +33% 2,432 2,120 865 2,069 691 1,818 1,823 621 657 1,654 1,619 414 1,363 666 603 1,281 541 391 436 1 864 1 741 1 499 1 412 1 240 1 152 1 078 1 220 890 927 IQ 19 IIQ 19 IIIQ 19 IVQ 19 IQ 20 IIQ 20 IIIQ 20 IVQ 20 IQ 21
Slide 44: Consolidated statement of the financial standing of the Alior Bank Group
Consolidated statement of the financial standing of the Alior Bank Group (PLN million) IIQ 2020 IIIQ 2020 IVQ 2020 IQ 2021 IIQ 2021 % q/q q/q % y/y y/y Total assets 77 671,9 77 717,3 78 642,0 79 880,6 79 035,1 -1,1% -845,5 1,8% 1 363,2 Cash and cash equivalents 1 128,5 1 636,9 2 459,9 2 163,6 1 566,
Slide 45: Additional information
Additional information Employment (FTEs) Alior Bank’s branches -642 -8% -107 -213 -13% 8,183 -3% -16 8031 801 7,878 768 -2% 498 7,754 725 490 7,541 710 694 220 473 205 224 479 199 225 481 200 200 195 235 51 51 222 51 51 51 7 465 7 317 7 180 7 040 545 6 838 518 474 459 448 IIQ 20 IIIQ 20 IVQ 20 IQ 21
Slide 46: 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 More information Subsequent events • Results for Q3 2021 on 27 October 2021 Website Facebook fanpage Twitter profile Youtube channel
Slide 47: Reservation
Reservation 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