Alior Bank Sa · GPW:ALR
Alior Bank Sa — Q1 2014 Earnings Presentation
38 slides from Alior Bank Sa's earnings presentation, May 8, 2014
Slide 1: Alior Bank S.A. Q1 2014 results presentation
ALIOR BANK S.A. Q1 2014 results presentation May 8, 2014 1
Slide 2: Agenda
AGENDA • Highlights • Recent Management Changes • Operational Performance • Strategic Initiatives • Outlook • Appendix 2
Slide 3: Agenda
AGENDA • Highlights • Recent Management Changes • Operational Performance • Strategic Initiatives • Outlook • Appendix 3
Slide 4: Highlights
HIGHLIGHTS Volume growth in line with guidance L/D < 96% + PLN 1.278 m of loans (+6,5% vs Q4’13) + PLN 1.040 m of deposits (+5,0% vs Q4’13) Client acquisition on track to achieve 400k by EOY +116 k of retail clients vs. Q4’13 T-Mobile Launched with strong ATL campaign Business grow
Slide 5: Key Financials
KEY FINANCIALS M PLN Q1'14 Q4'13 Q1'13 % (A/B)-1 % (A/C)-1 A B C D E Net interest income 271 298 222 -9,0 22,2 Fee and commission expense 84 88 55 -5,4 50,6 Trading result & other 63 62 51 0,7 22,7 Operating income 417 448 328 -6,9 27,1 General Administrative Expenses -215 -233 -198 -7,9 8,7 Impairm
Slide 6: Agenda
AGENDA • Highlights • Recent Management Changes • Operational Performance • Strategic Initiatives • Outlook • Appendix 6
Slide 7: Recent Management Changes
RECENT MANAGEMENT CHANGES Alior Bank current management structure Wojciech Sobieraj CEO Krzysztof Katarzyna Witold Michał Czuba Sułkowska Skrok Hucał CEO Business Risk & Operation Finance Development Strategy Sales Retail risk Controlling Product development Audit Alternative sales Corporate risk Ac
Slide 8: Agenda
AGENDA • Highlights • Recent Management Changes • Operational Performance • Strategic Initiatives • Outlook • Appendix 8
Slide 9: NIM
NIM Alior NIM development Q1’14 NIM drivers: Successful price promotion for cash loans 4.6% 4.7% 4.6% 4.6% 4.5% Intermediaries sale intensification Competition Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 NIM in selected Polish banks (Alior, Millennium, mBank, BZWBK - Q1’14, other Q4’13) 4.5% 3.7% 3.6% 3.2% 3.4% 2
Slide 10: Continued strong loan book growth paired with conservative deposit level
CONTINUED STRONG LOAN BOOK GROWTH PAIRED WITH CONSERVATIVE DEPOSIT LEVEL Loan book split L/D = 96% in PLN m +34% 20 936 RETAIL L/D=74% 272;1% Other business Deposits Loans 536;3% Factoring 69% 54% 15 199 3 380; 14 224 16% Investment loans 11 986 Term, own 15 619 8 588 banking sec., 46% 8 360 11 291
Slide 11: Fee income performance
FEE INCOME PERFORMANCE Fee income split (in PLN m, structure) 141 15 125 115 116 7 other 16 104 10 13 14 brokerage 6 11 13 33 9 34 other banking activities 30 31 30 23 21 settlements 19 18 23 39 insurance sale 34 intermediation 29 38 29 15 14 granted loans 10 7 9 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 11
Slide 12: Credit risk overview
CREDIT RISK OVERVIEW NPL total (%) Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 10,2 8,9 9,4 8,4 8,4 6,9 7,4 6,3 6,7 6,5 Market avg.* 11,5 13,1 3,2 1,2 1,3 1,5 2,0 2,3 Corporate Retail Mortgage Coverage ratio (%) Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 67 58 59 60 58 60 61 54 56 48 Market avg.* 46 68 49 20 18 17 14 15 Corpo
Slide 13: Strong capital position allows for continuous profitable growth
STRONG CAPITAL POSITION ALLOWS FOR CONTINUOUS PROFITABLE GROWTH 14.0% 8.0% 7.0% 12.7% 12.0% 11.1% 11.2% 6.0% 10.0% 11.0% 5.0% 8.0% 9.0% 4.0% 6.0% 3.0% 1.2% 1.0% 1.1% 4.0% 0.8% 1.0% 2.0% 2.0% 1.0% 0.0% 0.0% Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 ROE ROA 20.0% 13.5% 13.0% 18.0% 13.4% 12.8% 12.8% 16.0% 11.0% 12
Slide 14: On track to capture 4% market share by 2016
ON TRACK TO CAPTURE 4% MARKET SHARE BY 2016 Deposits MARKET SHARE Loans 2.56% 2.61% 2,6%* 2.5% 2.23% 2.0% Q1'13 Q4'13 Q1'14 Q1'13 Q4'13 Q1'14 Deposits MONTHLY GROWTH (%) Loans Total Retail Corporate Total Retail Corporate ALIOR Market ALIOR Market ALIOR Market ALIOR Market ALIOR Market ALIOR Market
Slide 15: Alior remains a top pick for increasing number of customers
ALIOR REMAINS A TOP PICK FOR INCREASING NUMBER OF CUSTOMERS Acceleration of customer acquisition Current accounts growth Q4’13 vs. Q4’12 (ths) +116 +191 +188 Alior Bank 278 +151 +102 2 119 2 234 1 928 118 119 Getin Noble 231 1 740 117 2 115 1 487 1 589 113 2 000 108 1 811 104 1 627 ING Bank Śląski 1
Slide 16: Wide range and diversified distribution network
WIDE RANGE AND DIVERSIFIED DISTRIBUTION NETWORK 4th largest distribution network in Poland 854 759 220 109 528 438 16 441 417 304 230 208 208 209 217 Q4'11 Q1'12 Q1'13 Q1'14 Branches Agencies Alior Express Intermediaries 3 000 Retailers offering Consumer Finance 705 Since May 7th we are in ~840 outl
Slide 17: Agenda
AGENDA • Highlights • Recent Management Changes • Operational Performance • Strategic Initiatives • Outlook • Appendix 17
Slide 18: T-Mobile banking services launched on May 6th
T-MOBILE BANKING SERVICES LAUNCHED ON MAY 6TH Sales started! • Strongest T-Mobile ATL campaign this year • Offering available in ~840 T-Mobile outlets • Hook product: best-in-class current account with instant pre-scored overdraft • Our target in the following months: 250.000 customers 18
Slide 19: Close cooperation between bank and telco company
CLOSE COOPERATION BETWEEN BANK AND TELCO COMPANY Focus on effective and swift execution: • Regular meetings on board level and dozens of B-1 and B-2 meetings every week • Thousands of employees involved in business, IT and sales True telco bank not only partnership • Alior provides IT, credit risk a
Slide 20: Ambitious targets for the project
AMBITIOUS TARGETS FOR THE PROJECT Alior ambition: acquisition of ~2 M clients within 5 years • Mainly from 16 M strong T-Mobile client base • Taking advantage of synergies in T-Mobile distribution and marketing Strong profitability • Planned ROE in year 3 of 16% growing to ~40% in year 5 • Estimated
Slide 21: Consumer finance development
CONSUMER FINANCE DEVELOPMENT White label POS in 700+ shops Installment loans Cross-sell loans 24 month maturity 60 month maturity PLN 674 m of loans as of Q1’14 PLN 183 m of loans as of Q1’14 Target 2016: PLN 1 bln Target 2016: PLN 3 bln Low margin (<1%) Regularly priced cash loans 21
Slide 22: Agenda
AGENDA • Highlights • Recent Management Changes • Operational Performance • Strategic Initiatives • Outlook • Appendix 22
Slide 23: 2014 Outlook
2014 OUTLOOK Growth Loan growth > PLN 400 m net monthly NIM ~4,7% Costs C/I 2014 below 50% EOY Risk CoR 2014 – 2,2% 23
Slide 24: Agenda
AGENDA • Highlights • Recent Management Changes • Operational Performance • Strategic Initiatives • Outlook • Appendix 24
Slide 25: Polish macro outlook
POLISH MACRO OUTLOOK GDP growth (% yoy) Investments and private consumption (% yoy) 4.5 3.9 Private 10.6 Investments consumption 4.5 2.9 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 26: Polish macro outlook
POLISH MACRO OUTLOOK NBP reference rate (%) WIBOR 3M (%) 4.50 4.99 4.25 4.27 3.50 3.50 4.13 3.95 3.00 3.30 2.50 2.71 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 27: Polish banking sector – moderate growth of main balance sheet figures
POLISH BANKING SECTOR – MODERATE GROWTH OF MAIN BALANCE SHEET FIGURES Assets Loans +4,2% +2,7% +6,0% +3,0% 1 429 1 444 1 401 1 407 1 374 1 002 1 350 993 966 972 936 945 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Equity Deposits +5,6% +2,1% +3,3% 999 991 978 945 966 +1,6%
Slide 28: 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 29: Income statement snapshot
INCOME STATEMENT SNAPSHOT in PLN m Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Interest income 376 370 357 415 392 Interest expense -155 -130 -118 -117 -121 Net interest income 222 240 239 298 271 Dividend 0 0 0 0 0 Fee and commission income 104 115 116 141 125 Fee and commission expense -49 -55 -45 -52 -42 Net f
Slide 30: Balance sheet snapshot
BALANCE SHEET SNAPSHOT Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Cash and balances with Central Bank 729 722 755 1 067 1 078 Financial assets held for trading 215 265 234 243 208 Financial assets available for sale 3 259 3 447 2 929 3 389 3 172 Hedging derivatives 0 0 3 12 21 Receivables from banks 138 170 182
Slide 31: Shareholding
SHAREHOLDING Free float 19.6m shares - 28,1% Entities controlled by Carlo Tassara Group 41.4m shares - 58,3% 5.6m shares - 8,0% Market free float European Bank for Reconstruction and Development 3.9m shares - 5,6% Wellington Management Company LLP Management incentive shares 2012 incentive scheme Op
Slide 32: Continued strong loan growth across each segment
CONTINUED STRONG LOAN GROWTH ACROSS EACH SEGMENT 1 621 Retail loans (new production per quarter) 125 1 374 1 271 1 314 1 189 370 61 Other retail 1 129 72 54 1 039 74 342 965 74 260 322 899 886 891 95 247 Mortgages for 780 229 178 93 70 196 real estate 654 173 156 188 134 223 173 233 1 126 229 939 93
Slide 33: Retail driven, stable revenue structure
RETAIL DRIVEN, STABLE REVENUE STRUCTURE Net revenue split before impairment charges (%) Q1’13 Q1’14 Treasury Treasury 4% 7% Business Retail Retail 39% Business 57% 57% 36% 33
Slide 34: Employees
EMPLOYEES Persons 6 512 6 500 6 154 5 720 4 873 5 049 2 388 2 485 2 405 2 187 1 745 1 748 3 749 4 027 4 112 3 128 3 301 3 533 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Outlets Headquaters FTEs 6 237 6 157 5 712 5 185 4 345 4 633 2 444 2 351 2 303 2 094 1 684 1 814 3 409 3 713 3 886 2 661 2 819 3 091 Q4'12
Slide 35: Regulatory update
REGULATORY UPDATE ECB 2014 Asset Quality Review April 2014 Stress Publication of AQR October 2014 scenarios results and Regulator review distributed to banks recommendations Bancassurance Draft Recommendation U still under consultation (banks, insurers, PFSA) Alior is actively involved in the di
Slide 36: Cost saving program on target
COST SAVING PROGRAM ON TARGET New Cost saving program savings of 25 M in 2014 + 25 M in 2015, structure: HR 45% External services 15% IT & telecommunication 14% Other 26% 36
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 Q1 2014. B