Alior Bank Sa · GPW:ALR
Alior Bank Sa — Q3 2013 Earnings Presentation
32 slides from Alior Bank Sa's earnings presentation, Nov 14, 2013
Slide 1: Alior Bank S.A. Q3 2013
ALIOR BANK S.A. Q3 2013 November 14, 2013
Slide 2: Q3 2013 Highlights
Q3 2013 HIGHLIGHTS • Bancassurance accounting impact • Change in methodology • Adopted most conservative approach • 309 M by EOY 2012 and 105 M in 2013 YTD • Capital increase • Up to 10% • EGM 28th of November • Strategy: 2016 targets • Growth plan retained (4% Market Share) • C/I ratio target <45%
Slide 3: Key Financials (Bancassurance Impact Included)
KEY FINANCIALS (BANCASSURANCE IMPACT INCLUDED) M PLN Q3’13 YTD Q3’12 YTD % (A-B)/B Q3’13 QTD Q3'12 QTD % (D-E)/E A B C D E F Net interest income 731 622 18 249 225 11 Net fee and commission income 136 123 11 54 43 25 Trading result & other 204 173 18 58 75 -23 Operating income 1 072 918 17 362 344 5
Slide 4: Bancassurance Accounting
BANCASSURANCE ACCOUNTING MODEL MODEL MODEL 2009-JUN 30 2013 JUL 2013 – SEP 2013 AS OF OCT 2013 Life insurance Life insurance Life insurance Job-loss insurance Job-loss insurance Job-loss insurance Offering Alior acts as an Alior acts as an Alior acts as an insuring party with the insuring party with
Slide 5: Bancassurance Accounting Impact
BANCASSURANCE ACCOUNTING IMPACT The Management Board of Alior Bank decided on October 17, 2013 on full periodization of bancassurance income. Revenue not lost but deferred. No change to liquidity position. Future recognition of deferred income from previous years (in PLN m) 39 115 87 414 62 42 69 De
Slide 6: NIM – Decrease with Positive Outlook
NIM – DECREASE WITH POSITIVE OUTLOOK Alior NIM progression NIM in selected Polish Banks Data as of Q3’13; PKO BP and GetinNoble – Q2’13 5,0% 4,8% 4,8% GetinNoble 2,0% 4,1% 4,1% BRE 2,1% NIM level before bancassurance reconciliation Millennium 2,2% ING BSK 2,7% Q1'13 Q2'13 Q3'13 Bank BPH 2,7% 5,06 4,
Slide 7: Favorable Development of Loan Book and Deposit Gathering
FAVORABLE DEVELOPMENT OF LOAN BOOK AND DEPOSIT GATHERING Loan book split L/D = 94,7% RETAIL L/D=76% 18 150 324; 2% Other business Deposits Loans +37% 608; 3% 66% 53% Factoring 2 983; 12 622 16% Investment loans 11 211 6 893 8 544 13 227 47% 9 601 Term, own banking 474; 4% securities, other 608; 5% 5
Slide 8: Fee Income Performance
FEE INCOME PERFORMANCE Fee income split (in PLN m, structure) +15 % 99 97 13; 13% other 86 10; 9% 7; 8% 11; 11% 13; 13% 9; 10% brokerage 30; 31% 30; 30% other banking activities 31; 36% settlements 19; 20% 18; 21% 23; 23% non-lending 12; 14% 21; 22% 12; 12% insurance sale intermediation 10; 11% 6; 7
Slide 9: Developing Scale of Activity While Keeping Cost Effectiveness
DEVELOPING SCALE OF ACTIVITY WHILE KEEPING COST EFFECTIVENESS Alior broaden ...managing its cost base the capacity.... effectively vs. vs. Q3’13 Q3’12 Q3’12 in PLN m Outlets +18% HR costs +22% -337 -19 Number of +42% -5% NHR costs -213 customers 0 Total Depreciation revenues +17% +4% -56 Tax and Fee
Slide 10: Credit Risk Overview
CREDIT RISK OVERVIEW 9,2 8,7 NPL (%) 7,8 6,7 6,9 6,3 1,2 1,3 1,5 Market avg. Corporate 11,5 Other retail 13,4 MTG 3,0 Q1'13 Q2'13 Q3'13 Coverage 69 58 59 58 ratio (%) 54 56 20 18 17 Market avg. Corporate 45 Other retail 69 MTG 50 Q1'13 Q2'13 Q3'13 Loan portfolio Corporate Other retail Mortgages stru
Slide 11: Non-Collateralized Retail Credit Risk
NON-COLLATERIALIZED RETAIL CREDIT RISK Tough acceptance criteria High predictability of CoR + risk based pricing = high ROE Excellent Best in scoring class quality collection CoR for Q3’13 = 2,81% 11
Slide 12: Non-Collateralized Retail Credit Risk - Recoveries
NON-COLLATERALIZED RETAIL CREDIT RISK - RECOVERIES Improving recoveries on Cash Loans 60% 50% 40% 2009 2010 30% 2011 2012 20% 2013Q1 10% 0% 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 Months of Workout Recoveries - payments and cures discounted and expressed as percent of exposur
Slide 13: CAR Above 12% Capital Required to Secure 2016 Targets
CAR ABOVE 12% CAPITAL REQUIRED TO SECURE 2016 TARGETS 14,0% 8,0% 15,1% 13,0% 20,0% 15,8% 14,4% 12,0% 14,8% 7,0% 18,0% 12,5% 12,0% 6,0% 12,6% 12,6% 16,0% 10,0% 12,4% 10,3% 14,0% 12,0% 5,0% 12,9% 12,5% 8,0% 9,2% 12,0% 4,0% 11,5% 10,0% 6,0% 10,4% 10,7% 10,5% 1,7% 8,0% 3,0% 4,0% 1,5% 11,0% 6,0% 2,0% 0,9
Slide 14: On Track to Capture 4% Market Share
ON TRACK TO CAPTURE 4% MARKET SHARE Deposits MARKET SHARE Loans 2,5% 2,5% 2,3% 2,1% 2,2% 1,7% Q3'12 Q2'13 Q3'13 Q3'12 Q2'13 Q3'13 Deposits MONtHLY GROWTH Loans Total Retail Corporate Total Retail Corporate ALIOR Market ALIOR Market ALIOR Market ALIOR Market ALIOR Market ALIOR Market APR 1,7% -0,1% 1
Slide 15: Alior Retains Its Top Position in Client Acquisition
ALIOR RETAINS ITS TOP POSITION IN CLIENT ACQUISITION No of Alior’s customers (in ths.) Current account acquisition 1H 2013 +188 Alior Bank (incl. Alior Sync) 334 Getin Noble Bank 232 1 928 Bank Pocztowy 223 1 740 117 mBank 157 1 589 113 1811 ING Bank Śląski 138 108 1 627 PKO BP 128 1 481 BZ WBK 95 B
Slide 16: Continued Strong Loan Growth Across Each Segment
CONTINUED STRONG LOAN GROWTH ACROSS EACH SEGMENT Retail loans (new production per quarter) 1 287 1 314 1 151 1 189 74 55 Other retial 1 067 75 74 259 321 965 95 899 886 895 229 245 Mortgages for real 781 180 94 76 196 178 estates 644 130 159 221 188 229 Cash loans 187 227 955 938 776 848 868 221 605
Slide 17: Distribution Network Growth
DISTRIBUTION NETWORK GROWTH No of Alior’s outlets 795 804 759 720 684 142 109 173 603 65 100 528 45 438 16 410 411 441 444 422 350 304 230 208 208 208 209 209 209 209 209 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Branches Agencies Alior Express The number of Alior Express outlets will increase
Slide 18: Strategic Initiatives
STRATEGIC INITIATIVES CF portfolio in PLN m Consumer Finance – started in March 2012 Gaining a strong footprint in over 600 455 +72% locations of major retailers Ever increasing presence online (Allegro, 264 PayU, Neo24.pl) Consumer Finance portfolio: PLN 455 M (Q3 2013) Q2'13 Q3'13 +7% +29% Alior B
Slide 19: Strategic Outlook
STRATEGIC OUTLOOK 506 Figures present consensus based on 385 Net profit the analysts reports post 231 October 18, 2013 in PLN M* 2013E 2014E 2015E ROE 2016 • >16% Loans volumes monthly • > PLN 400 m per month C/I 2016 • < 45% (vs. < 42% previously) Market share 2016 • 4% *based on: Espirito Santo -
Slide 20: Back Up
ALIOR BACK UP 20
Slide 21: Q3 2013 Highlights - Bancassurance
Q3 2013 HIGHLIGHTS - BANCASSURANCE • Full periodization of bancassurance income for the production up to 2012 affected the Bank’s equity in the total amount of PLN -309 M. Impact on: 2009 2010 2011 2012 Loan receivables -28 -94 -237 -377 Deferred income tax receivables 5 18 43 72 Undistributed resul
Slide 22: Shareholding Structure
SHAREHOLDING STRUCTURE Number of Nominal value Shareholder shares / votes of shares Alior Lux S.a r.l. & Co. S.C.A. (including Alior Polska 22 918 382 229 183 820 Sp. z o.o.) European Bank for Reconstruction and Development 5 614 035 56 140 350 Other 35 050 548 350 505 480 Total 63 582 965 635 829 6
Slide 23: Polish Macro Outlook
POLISH MACRO OUTLOOK GDP growth (% yoy) Investments and private consumption (% yoy) 11 4,30 8,5 3,90 9 7 Investments Private 2,50 5 consumption 4,5 3,2 2,00 2,1 2,5 3 1,2 1,6 1,60 1,30 1 -0,8 0,6 -1 -1,2 -0,4 -3 -1,8 2009 2010 2011 2012 2013F 2014F 2009 2010 2011 2012 2013F 2014F Inflation (CPI % yo
Slide 24: Polish Macro Outlook
POLISH MACRO OUTLOOK NBP referance rate (%) WIBOR 3M (%) 4,50 4,99 4,25 4,27 3,50 3,50 4,13 3,95 2,75 3,10 2,50 3,00 2009 2010 2011 2012 2013F 2014F 2009 2010 2011 2012 2013F 2014F End of period End of period FX rate (EUR/PLN) Fiscal policy (% of GDP) 4,42 Public debt 58,2 20 60 56,2 55,6 18 54,9 16
Slide 25: Polish Market – Loans and Liabilities
POLISH MARKET – LOANS AND LIABILITIES Loans to households (bln PLN) Loans to corporations (bln PLN) 281 281 552 546 276 274 536 534 272 531 531 271 Jun 12 Sep 12 Dec 12 Mar 13 Jun 13 Sep 13 Jun 12 Sep 12 Dec 12 Mar 13 Jun 13 Sep 13 End of period End of period Liabilities from households (bln PLN) Li
Slide 26: Income Statement Snapshot
INCOME STATEMENT SNAPSHOT Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Interest income 289 365 371 407 393 373 367 Interest expense -118 -139 -146 -171 -155 -130 -118 Net interest income 171 227 225 236 239 243 249 Dividend 0 0 0 0 0 0 0 Fee and commission income 75 72 83 82 86 97 99 Fee and commission
Slide 27: Balance Sheet Snapshot
BALANCE SHEET SNAPSHOT Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Cash and balances with Central Bank 579 590 701 1 030 729 722 755 Financial assets held for trading 187 205 174 174 215 265 234 Financial assets available for sale 2 113 2 345 2 328 4 321 3 259 3 447 2 929 Hedging derivatives 0 0 0 0 0
Slide 28: Effective Utilization of Current Infrastructure Reflected in Flat Cost Development
EFFECTIVE UTILIZATION OF CURRENT INFRASTRUCTURE REFLECTED IN FLAT COST DEVELOPMENT in PLN m Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 HR costs -98 -87 -92 -242 -103 -113 -121 NHR costs, icluding inter alia: -64 -78 -83 -85 -74 -70 -69 building maintenance -32 -35 -35 -33 -36 -31 -32 IT costs -6 -7 -
Slide 29: Retail Driven, Stable Revenue Structure
RETAIL DRIVEN, STABLE REVENUE STRUCTURE Net revenue split (%) Q3’12 Q3’13 Treasury Treasury 5% 8% Retail Retail Business 55% Business 55% 40% 37% 29
Slide 30: Employees
EMPLOYEES 6 154 5 720 4 873 5 049 3 749 3 533 3 128 3 301 2 187 2 405 1 745 1 748 Q4'12 Q1'13 Q2'13 Q3'13 Headquaters Outlets 30
Slide 31: 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 31
Slide 32: 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 Q3 2013. B