Alior Bank Sa · GPW:ALR
Alior Bank Sa — Q2 2023 Earnings Presentation
46 slides from Alior Bank Sa's earnings presentation, Aug 4, 2023
Slide 1: Presentation of results for 1H'23
Presentation of results for 1H’23 Warsaw, August 2, 2023
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-breaking financial results in 2Q'23 are an optimistic indicator for the future
Record-breaking financial results in 2Q’23 are an optimistic indicator for the future Total revenues (PLN mn) +433 mn (+19%) +185 mn (+15%) In the first half of 2023 revenues amounted to 2 726 1 341 1 385 PLN bn 2.715 11 1 292 1 322 11 1 200 • net interest income PLN bn 2.264 (+23% y/y) • net fees a
Slide 5: Another successful quarter for Alior Bank – improvement of efficiency, profitability, and quality of portfolio
Another successful quarter for Alior Bank – improvement of efficiency, profitability, and quality of portfolio Assets (PLN bn) Gross Loans (PLN bn) Gross Performing Loans* (PLN bn) -0.8% -0.8% +0.5% 63,2 84,2 83,5 62,7 56,7 56,4 2Q 22 2Q 23 2Q 22 2Q 23 2Q 22 2Q 23 C/I 2Q’23 ROE 2Q’23 COR 2Q’23 35.3%
Slide 6: Good quarter for the Retail Customer segment
RETAIL Good quarter for the Retail Customer segment CUSTOMERS LOAN SALES MORTGAGE LOAN SALES 1.7 PLN BN CONSUMER FINANCE (+20% y/y) 0.6 PLN BN SALES MOBILE USERS (-9% y/y) 1.2 PLN BN 1 MN (+18% y/y) (+20% y/y) I place in Cash loans II place in II place in Mortgage loans Personal accounts 6
Slide 7: Growth of the Bank's key products – mortgage loans
RETAIL Growth of the Bank’s key products – mortgage loans* CUSTOMERS 1,40 Sale of mortgage loans (PLN bn) -9% 1,20 Number of Customers with a mortgage loan (k) 1,00 +55% -1% 0,66 0,80 0,60 75,8 75,3 75,0 74,7 75,1 0,60 0,44 0,39 0,40 0,38 0,20 0,00 2Q 22 3Q 22 4Q 22 1Q 23 2Q 23 2Q 22 3Q 22 4Q 22 1Q
Slide 8: 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) +20% Number of Customers with a loan (k) +6% -2% 1,60 1,69 1,41 402 397 392 390 392 1,30 1,32 2Q 22 3Q 22 4Q 22 1Q 23 2Q 23 2Q 22 3Q 22 4Q 22 1Q 23 2Q 23 Gross consumer loan portfolio (PLN bn) -8% 52% Share of r
Slide 9: 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) +18% -1% +61% 1,17 1,18 1,17 1 600 1 337 1 349 1 367 1 318 1 282 0,99 1 400 1 200 0,73 1 000 800 600 400 200 0 2Q 22 3Q 22 4Q 22 1Q 23 2Q 23 2Q 22 3Q 22 4Q 22 1Q 23
Slide 10: 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) +1% +21% 670 700 4,13 4,16 4,14 610 636 4,10 4,10 578 2Q 22 3Q 22 4Q 22 1Q 23 2Q 23 2Q 22 3Q 22 4Q 22 1Q 23 2Q 23 Number of motorway jou
Slide 11: 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) +20% +17% 1 200 968 1 006 11,9 1 000 882 928 11,5 839 800 11,0 10,3 600 10,2 400 200 0 2Q 22 3Q 22 4Q 22 1Q 23 2Q 23 2Q 22 3Q 22
Slide 12: 2% Safe Mortgage and Home Savings Account
RETAIL In 2Q’23 Alior was one of the first banks to offer the 2% Safe Mortgage and Home Savings CUSTOMERS Account 2% Safe Mortgage On the very first day of the program Alior Bank enabled Customers to file an application and draw a loan from the First Home Program. CUSTOMER ACTIVITY ON NUMBER OF OFFE
Slide 13: A good half year for the Business Customer segment
BUSINESS A good half year for the Business Customer segment CUSTOMERS NEW CREDIT LIMIT Y/Y REVENUE AFTER COR Y/Y NPL Y/Y +31% +13% -2.3 p.p. PLN bn 5.9 in 1-2Q’23 * • We have over 9% market share in commitments up to PLN mn 5 for the self-employed („JDG”) • We are growing 3x the market in commitment
Slide 14: Rising trend in key efficiency indicators
BUSINESS Rising trend in key efficiency indicators… CUSTOMERS New credit limit (PLN bn) % of orders executed remotely +11 p.p. +31% +2 p.p 5,90 50% 48% 4,50 45% 44% 39% IH 22 IH 23 II2Q’22 kw.22 3Q’22 III kw.22 4Q’22 IV kw.22 I1Q’23 kw.23 2Q’23 II kw.23 Customers with BankConnect (k) Share of automa
Slide 15: Simultaneously we are improving the portfolio structure
BUSINESS …simultaneously we are improving the portfolio structure CUSTOMERS Total balance of assets Small/Medium/Large (PLN bn) Balance of assets Small/Medium/Large in regular service (PLN bn) +8% +15% +2% 13,5 13,4 11,2 13,4 11,0 10,8 13,0 10,7 12,5 9,7 2Q’22 II kw.22 3Q’22 III kw.22 4Q’22 IV kw.22
Slide 16: Alior Bank – Digital Leader
Alior Bank – Digital Leader New refreshed mobile app Alior Pay – deferred payments home screen Within Alior Pay the Customer has been provided with access to information on limits and deferred transactions, as well as has been provided with additional functionalities for deferred and installment tra
Slide 17: Social responsibility of Alior Bank
Social responsibility of Alior Bank Health Zone • Health initiatives for employees. ONA („SHE”) • Cardiological examinations for over 250 people • Developmental-prophylactic program addressed to employees. • Completed: #JesteśWażna („YouAreImportant”) campaign, #JesteśWażny for Mother’s and Father’s
Slide 18: Innovative implementations
Innovative implementations ALIOR PAY „FIXED INSTALLMENT LOAN” CAMPAIGN REMOTE POST-SALES SERVICE IN THE BUSINESS CUSTOMER SEGMENT Publication of report summarizing Advertisement based on seeking Committing a team for remote insightful statistics and conclusions a calling in life and choosing a post-
Slide 19: Customers and the market appreciate Alior Bank
Customers and the market appreciate Alior Bank Upgrading rating to BB+ with stable perspective. Award The Innovators 2023: Award The Innovators 2023 Department of Innovation and S&P appreciated: the Bank’s resilience to in „Top Innovations in FinTech Partnerships one of macroeconomic changes; initia
Slide 20: ESG activities in Alior Bank – Selected activities in 2Q'23
ESG activities in Alior Bank Selected activities in 2Q’23 We calculated our scope 1 and 2 carbon footprint for 2022 We created a new product – eco-loan with BGK guarantee 2Q’23 We provided sustainable SLL financing 1-2Q’23 We are building our own photovoltaic installation at our Data Center in 2023
Slide 21: Credit risk
21 Credit risk
Slide 22: Stable and secure position of the Bank: 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* The levels of TIER I and TCR capital adequacy ratios as at the end of 2Q’23 significantly exceed the regulatory minimum by 551 bps 14,26% 14,16% 13,48% (PLN bn 2.6) and 446 bps (P
Slide 23: Change in credit policy and NPL reduction strategy reduced cost of risk
The change in the credit policy, accompanied by the effective implementation of the NPL reduction strategy, allowed for a sustained reduction in CoR and an improvement in the quality of the loan portfolio Alior Bank Group – cost of risk Alior Bank Group – NPL ratio 2500 2,80% 2,39% 2000 14,48% 1,60%
Slide 24: 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** 1,64% 1,61% 12,00% 1,57% 8 10,70% 10,98% 8 1,46% 1,43% *** 11,00% 7 9,80% 9,80% 10,00% 9,45% 7 57,27% 55,81% 6 0,95% 9,00% 6,79 53,67% 53,65% 6,54 53,08% 5,89
Slide 25: Financial results
25 Financial results
Slide 26: Income statement
Income statement PLN mn 2Q 22 2Q 23 % y/y y/y IH 22 IH 23 % y/y y/y Total Income 1 199,8 1 385,1 15% 185,3 2 293,0 2 714,7 18% 421,8 Net interest income 971,8 1 160,9 19% 189,1 1 834,1 2 263,9 23% 429,8 Net fee and commission income 220,6 216,2 -2% -4,4 411,3 424,7 3% 13,4 Other income 7,4 8,1 9% 0,
Slide 27: Due to a decrease in financing costs, NIM is improving
Due to a decrease in financing costs, NIM is improving Interest income and expenses (PLN mn) Interest margin and financing cost* +53% +36% +1% 100,0 3 655 5,81% 5,87% 1 812 1 821 1 835 11 1 708 5,92% 6,05% 100,0 808 329 355 408 401 5,81% Other Interest Income 1 349 2 395 11 5,11% 187 100,0 314 Inter
Slide 28: Alior Bank achieves stable net fees and commissions income
Alior Bank achieves stable net fees and commissions income Net Fees and Commissions Income (PLN mn) +3% -2% +4% 411 425 221 216 -13% y/y Bank accounts, transfers, cash 202 209 81 operations (net) 41 -16% y/y 93 49 183 43 41 46 +6% y/y Bancassurance (net) 24 43 21 42 22 +13% y/y 20 16 125 +4% y/y Lea
Slide 29: The Bank is maintaining operational efficiency despite inflationary pressure on costs
The Bank is maintaining operational efficiency, despite growing inflationary pressure on costs Operating costs (PLN mn) C/I ratio** -17% -8% -3% 591 C/I normalized*** 1 084 59,5% Koszty 996 507 490 - C/I reported 195 pracownicze 59 195 457 1 456 58 132 Koszty ogólnego 8 1 68 - 97 53 49,3% zarządu* 6
Slide 30: Main financial targets of the strategy
The main financial targets of the strategy „Your Bank of everyday life, your Bank for the future” Profitability 6M 2023 2024 ROE 25.4% >13% C/I 36.7% <45% Equity Tier 1 14.2% >13.5% TCR 15.1% >15% Credit risk CoR 1.3% <1.6% NPL 9.5% <10% 30
Slide 31: Why Alior Bank?
Why Alior Bank? ▪ Safe and stable capital position ▪ High NIM ▪ Innovation, digitization, high quality of services for Customers ▪ High performance due to an increase in revenue and cost optimalization ▪ Improvement in the loan portfolio quality ▪ Consumer Finance market leader ▪ Growing share of ho
Slide 32: Other issues
32 Other issues
Slide 33: The Polish economy is in a contraction phase, inflation is lower
The Polish economy is in a contraction phase, inflation is lower Second consecutive quarter of decreasing GDP Household consumption still weak GDP growth (real, %, y/y) and its structure (p.p.) Key domestic data, Poland 10,0 140 (Dec'19=100, sa, fixed prices) 130 5,0 120 0,0 110 - 5,0 100 90 - 10,0
Slide 34: Trends in Poland in line with global trends
Trends in Poland in line with global trends Largest economies losing momentum… …which supports deceleration of inflation from the global perspective 75 PMI Composite 20 CPI (%, y/y) 15 65 10 55 5 45 0 35 -5 Jul-20 Dec-20 May-21 Oct-21 Mar-22 Aug-22 Jan-23 Jun-23 Jun-19 Dec-19 Jun-20 Dec-20 Jun-21 De
Slide 35: First signals of an incoming economic rebound
First signals of an incoming economic rebound In 2023 GDP will increase due to a better second half of the year An increase in real wages will strengthen consumers GDP growth with main components Job market 8,0 6,9 15,0 6,0 5,1 12,5 3,9 10,0 4,0 2,6 7,5 2,0 0,5 5,0 0,0 2,5 6,2 5,4 5,2 5,4 5,4 -2,0 0
Slide 36: 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 37: Alior Bank's investment services
Alior Bank’s investment services Alior Bank’s Brokerage House Alior TFI In 1H’23 we observed WSE trading around 15% smaller than In 2Q’23 Alior TFI rebuilt its AUM and is nearing its level from the in the same period of the previous year, which corresponded end of 2021. Net inflows in 2Q’23 amounted
Slide 38: Activities of Alior Leasing
Activities of Alior Leasing Sale of lease and loans (PLN bn) Number of customers (k) Lease portfolio and loans (PLN bn) -38% -6% -30% +9% -5% +63% +23% 74,3 6,0 +20% 68,3 69,9 66,6 5,8 1,5 1,5 5,8 1,3 55,4 1,1 5,4 0,9 5,0 1-2Q'19 1-2Q'20 1-2Q'21 1-2Q'22 1-2Q'23 2019 2020 2021 2022 2Q'23 2019 2020 20
Slide 39: 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) -1% -3% +3% +1% 0% +1% 38 245 36 913 25 784 36 822 24 988 25 445 63 234 62 267 62 697 4 195 4 089 4 009 6 217 6 156 6 212 24 988 25 445 25 784 312 16 074 16 092
Slide 40: The Bank adjusts its deposit portfolio to the current 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 0% 0% +1% -2% -2% 71 856 0% 70 741 70 706 2 244 1 566 2 102 49 591 50 397 49 344 21 150 21
Slide 41: 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 22 3Q 22 4Q 22 1Q 23 2Q 23 % q/q q/q % y/y y/y Total assets 84 223,5 84 070,7 82 877,2 84 325,2 83 527,5 -1% -797,7 -1% -696,0 Cash and cash equivalents 4 940,2 5 428,9 2 584,1 4 578,0 3 167,6 -31% -1 410,4 -36% -1
Slide 42: New sale of loans
New sale of loans (PLN mn) Sales in the Business Customer Segment* +17% -8% 3 069 2 833 2 432 2 414 1 197 2 196 2 103 2 276 +25% y/y 2 082 1 424 691 1 823 628 1 137 1 455 754 603 1 194 1 516 562 +10% y/y 1 741 1 872 1 568 1 409 1 220 1 328 1 277 893 909 760 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 2Q 22 3Q 22
Slide 43: Additional information
Additional information Employment (FTEs) Alior Bank’s branches -48 -1% -65 -14 -11% -0% -2 -0% 7 089 7 036 7 074 7 055 7 041 589 484 482 482 548 534 526 524 476 488 110 70 190 180 150 72 190 188 187 186 23 2 6 425 6 410 6 482 6 504 6 482 376 356 346 339 338 2Q 22 3Q 22 4Q 22 1Q 23 2Q 23 Alior Bank A
Slide 44: 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 : PLN 48.36 50 (data as at June 30, 2023) Capitalization: PLN bn 6.3 +77.8% y/y Value of shares in free trade : PLN bn 2.8 40 P/BV**:
Slide 45: 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 Website Following events: Facebook fanpage • 3Q 23 –
Slide 46: 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