Alior Bank Sa · GPW:ALR
Alior Bank Sa — Q1 2023 Earnings Presentation
47 slides from Alior Bank Sa's earnings presentation, Apr 28, 2023
Slide 1: Presentation of results for 1Q'23
Presentation of results for 1Q’23 Warsaw, April 26, 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: Another quarter with very good financial results – record revenues and net profit
Another quarter with very good financial results – record levels of revenues and net profit Total revenues (PLN mn) In 1Q’23 Alior Bank Group revenues amounted to PLN mn 1 330. This is a historic record for Alior Bank. +247 mn 1 341 • interest income PLN mn 1 103 (+28% y/y) 1 292 1 322 11 1 200 • fe
Slide 5: A successful quarter: improved efficiency, profitability and portfolio quality
A successful quarter for Alior Bank - noticeable improvement in efficiency, profitability and portfolio quality Assets (PLN bn) Gross Loans (PLN bn) Gross Performing Loans* (PLN bn) -0.4% -1.7% 0.0% 84,6 84,3 63,4 62,3 56,2 56,1 1Q 22 1Q 23 1Q 22 1Q 23 1Q 22 1Q 23 NIM 1Q’23 C/I 1Q’23 TCR 1Q’23 5.81%
Slide 6: Good quarter for the Business Customer segment
BUSINESS Good quarter for the Business Customer segment CUSTOMERS NEW CREDIT LIMIT REVENUES Y/Y NPL Y/Y 3.1 PLN BN +12% -3.2 P.P. AUTOMATION OF PROCESSES REWARDS AND DISTINCTIONS II place in Polish Real Estate Developers Union ranking of Pilot of new credit system with analyst banks – distinguished
Slide 7: Record sales of credit limits
BUSINESS Record sales of credit limits CUSTOMERS Segment: Small / Medium / Large Micro segment Total credit limit granted (PLN bn) Total credit limit granted (PLN bn) +57% 0% 2,7 0,38 0,38 0,32 0,31 2,1 1,8 2,0 0,27 1,7 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 Asset balance (PLN b
Slide 8: Simultaneously we are improving the portfolio structure
BUSINESS Simultaneously we are improving the portfolio structure CUSTOMERS Balance of assets Small/Medium/Large in regular service (PLN bn) Share of new sales to preferred industries +18% +19 p.p. 10,8 10,9 10,7 41% 34% 9,7 27% 26% 9,2 15% 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23
Slide 9: Upward trend of key performance metrics
BUSINESS Upward trend of key performance metrics CUSTOMERS Segment: Micro / Small / Medium / Large Number of active cards (k) % of instructions received remotely +2% +16 p.p. 103,6 45% 48% 103,1 102,4 44% 101,1 101,8 38% 39% 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 Number of Custo
Slide 10: We are actively acquiring new customers
BUSINESS We are actively acquiring new customers CUSTOMERS Special offer - 0% fee for loan decision Special offer - for customers with debit card Mastercard with Plus ▪ 0% fee for loan approval ▪ credit decision – in 20 minutes from loan application ▪ granted for daily business, investment, and ecol
Slide 11: Good quarter for the Retail Customer segment
RETAIL Good quarter for the Retail Customer segment CUSTOMERS LOAN SALES LOAN SALES IN REMOTE CHANNELS 1.6 PLN BN 50% (+33% y/y) MOBILE USERS MOBILE TRANSFERS REWARDS AND DISTINCTIONS 968 K 11.5 MN Alior Bank was a laureate of World Leaders in Banking and Insurance (+22% y/y) (+21% y/y) in the categ
Slide 12: Growth of the Bank's key products – mortgage loans
RETAIL Growth of the Bank’s key products – mortgage loans* CUSTOMERS Sale of mortgage loans (PLN bn) Number of Customers with a mortgage loan (k) -42% -2% 1,40 76,0 75,8 75,3 75,0 74,7 1,20 1,00 0,80 0,67 0,66 0,60 0,44 0,38 0,39 0,40 0,20 0,00 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 1Q 22 2Q 22 3Q 22 4Q 22 1
Slide 13: 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) Number of Customers with a loan (k) -4% +33% 409 402 397 392 390 1,60 1,41 1,30 1,32 1,20 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 Gross consumer loan portfolio (PLN bn) Record cash loan sales
Slide 14: Development of key products – Consumer Finance loans
RETAIL Development of the Bank’s key products – Consumer Finance (CF) loans CUSTOMERS Sales of CF loans (PLN bn) Number of CF Customers (k) -20% -3% 1,17 1,18 0,91 0,99 1600 1400 1 324 1 337 1 349 1 367 1 282 0,73 1200 1000 800 600 400 200 0 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 1Q 22 2Q 22 3Q 22 4Q 22 1Q 2
Slide 15: 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% +24% 4,13 4,16 670 4,06 4,10 4,10 610 636 541 578 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 Number of motorway jou
Slide 16: 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) +22% +21% 968 11,0 11,5 882 928 10,2 10,3 791 839 9,5 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 Structure of A
Slide 17: We introduced comprehensive ESG management
We introduced comprehensive ESG management Current ESG actions Disclosures from article 8 of EU Taxonomy For 2022 Calculation of scopes 1 and 2 of carbon footprint including estimation Data since 2020 of reduction tendencies Mapping ESG data collection processes required by CSRD Until Q4 2023 Consid
Slide 18: Social Responsibility of Alior Bank
Social Responsibility of Alior Bank Project „Ona” („She”) Alior University • On March 8 we initiated a free of charge developmental- • Alior University (AU) was established in order prophylactic program addressed to Alior Bank employees. to become a center of excellence and competence for bank emplo
Slide 19: Supporting Innovation
Supporting Innovation 5. Edition RBL_START • RBL_START accelerator develops the competencies of startups. IMPLEMENTING AND DEVELOPING AI TOOLS - INFONINA • The prize from the 5. Edition was received by Dreams Technology, which enables construction of savings targets based on behavioristics and Cashb
Slide 20: Clients and the market appreciate services and changes in Alior Bank
Clients and the market appreciate services and changes in Alior Bank Alior Bank took 2. place in the XVI edition of the Bank Ranking prepared by the Alior Bank’s card with Ashe from Polish Real Estate Developers Union. League of Legends is nominated in The jury appreciated the bank’s good Payment ca
Slide 21: #WeSupportGamers
#WeSupportGamers Baltic Playground Geek Week Meet at Rift • Alior Bank supported Baltic Playground e-sport • Alior Bank supported an event catering to fans of • Alior Bank supported Meet at Rift festival, for fans of league, organizer of international League of Legends gaming, e-sport, and fantasy.
Slide 22: Credit risk
22 Credit risk
Slide 23: Credit policy and NPL reduction strategy lower 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 +39 PLN mn y/y 500 +28 bps y/y 450
Slide 24: The restructuring of the loan portfolio brings tangible results
The restructuring of the loan portfolio brings tangible results Impaired loans (PLN bn) NPL reserve coverage ratio* Cost of Risk - CoR** 2,00% 11,31% 8 10,98% 1,64% 1,00% 10,70% 8 1,61% 1,57% 7 1,46% 9,80% 9,80% 0,00% 7 57,27% 1,33% 56,25% 55,81% 6,94 6,79 6 9,00% 6,54 53,67% 53,65% 5,89 5,88 6 8,00
Slide 25: Stable and secure position: capital and liquidity above regulatory minimum
Stable and secure position of the Bank: capital and liquidity surplus significantly above the regulatory minimum TIER I* 14,26% 13,48% 13,14% 12,99% 13,06% 13,00% 12,55% 12,63% 12,43% The levels of TIER I and TCR capital adequacy ratios as at the end of 1Q’23 significantly exceed the regulatory 561
Slide 26: Financial results
26 Financial results
Slide 27: Income statement
Income statement PLN mn 1Q 22 4Q 22 1Q 23 % y/y y/y % q/q q/q Total Income 1 093,2 1 322,1 1 329,6 22% 236,4 1% 7,5 Net interest income 862,4 1 139,1 1 103,1 28% 240,7 -3% -36,0 Net fee and commission income 190,7 183,2 208,6 9% 17,9 14% 25,3 Other income 40,1 -0,2 18,0 -55% -22,1 - 18,2 Total costs
Slide 28: NIM remains relatively stable at a high level
NIM remains relatively stable at a high level Interest income and expenses (PLN mn) Interest margin and financing cost* 5,92% 5,87% +73% 5,81% 0% 5,11% 5,81% 1 708 1 812 1 810 4,58% Other Interest Income 329 355 408 1 349 11 1 046 187 Interest Cost 525 3,07% 126 1 457 2,44% One-off items*** 1 402 2,
Slide 29: Alior Bank improves fees and commissions income
Alior Bank improves fees and commissions income Fees and Commissions Income (PLN mn) +9% +14% 221 Bank accounts, transfers, cash 202 209 operations (net) 191 49 183 -9% y/y 43 41 Bancassurance (net) 45 42 21 22 20 -1% y/y 22 16 Leasing, loans and advances 61 60 61 +4% y/y 59 63 Brokerage commissions
Slide 30: The Bank is improving its operational efficiency
The Bank is improving its operational efficiency, despite growing inflationary pressure on costs Operating costs (PLN mn) C/I ratio** +3% +11% 591 59,5% C/I normalized*** 493 507 - C/I reported 195 456 457 58 8 1 - 97 53 49,3% 66 65 19 -41%y/y 57 59 60 45,1% 139 123 +13%y/y 102 102 99 +21%y/y 40,5%
Slide 31: Main financial targets of the strategy
The main financial targets of the strategy „Your Bank of everyday life, your Bank for the future” Profitability 03.2023 2024 ROE 22.7% >13% C/I 38.1% <45% Equity Tier 1 14.3% >13.5% TCR 15.4% >15% Credit risk CoR 1.6% <1.6% NPL 9.8% <10% 31
Slide 32: Why Alior Bank?
Why Alior Bank? ▪ Safe and stable capital position ▪ High NIM ▪ Innovation, digitization, high quality of services for Customers ▪ Improvement of performance by increasing revenue and cost optimalization ▪ Improvement in the loan portfolio quality ▪ Consumer Finance market leader ▪ Growing share of
Slide 33: Other issues
33 Other issues
Slide 34: Drop in private consumption at the beginning of 2023
At the beginning of 2023 in the limelight, we see a drop in private consumption We expect a significant decrease in GDP in 1Q’23… … with indications of a substantial weakening of consumption… GDP growth (real, %, y/y) and its structure (p.p.) 10,0 Retail sales (2015=100, seas. adj.) 160 5,0 150 140
Slide 35: Domestic market under pressure from global contraction
The domestic market situation also remains under the pressure of global contraction, including in the EU Polish industry is stalling… … with decelerating domestic and global consumption… Industrial production (Dec'19=100, swda) Retail sales growth 20 25 (%, y/y, swda) 15 20 10 15 10 5 5 0 0 -5 -5 -1
Slide 36: Economic growth will reappear in the second half of 2023
Economic growth will reappear in the second half of 2023 Insignificant GDP growth this year Inflation will decrease but from a high basis GDP growth y/y with main components y/y Price index y/y and MPC interest rate 16 14,3 8,0 6,8 14 6,0 4,8 11,7 12 3,6 4,0 3,1 10 8 6,5 2,0 0,1 6 5,1 0,0 3,9 4 -2,0
Slide 37: 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 38: Alior Bank's investment services
Alior Bank’s investment services Alior Bank’s Brokerage House Alior TFI In 1Q’23 we observed WSE trading around 30% smaller than In 1Q’23 Alior TFI is rapidly rebuilding its AUM. Net inflows in 1Q’22, which corresponded to a weaker commission amounted to PLN 111 mn. The largest inflows were recorded
Slide 39: 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) -6% -38% +9% -3% +23% 74,3 6,0 0,8 -27% 68,3 69,9 68,1 +39% +16% 5,8 5,8 0,7 55,4 0,6 0,5 0,5 5,4 5,0 1Q 19 1Q 20 1Q 21 1Q 22 1Q 23 2019 2020 2021 2022 1Q 23 2019 2020 2021 2022 1Q
Slide 40: Gross structure of the loan portfolio
Gross structure of the loan portfolio (PLN mn) Loan portfolio in total Retail Customer Segment Business Customer Segment* -2% -5% +3% 0% -1% +2% 38 571 37 230 36 822 25 445 63 357 62 072 24 786 24 842 62 267 4 250 4 328 4 009 6 198 6 106 6 156 24 786 24 842 25 445 251 15 859 328 15 985 16 092 6 161
Slide 41: The Bank adjusts its deposit portfolio to the 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 2% +2% 0% 2% -1% 70 780 70 777 71 856 +9% 2 419 1 289 1 566 4 587 5 484 7 948 49 335 51 07
Slide 42: Consolidated statement of the financial standing
Consolidated statement of the financial standing of the Alior Bank Group (PLN mn) 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 % q/q q/q % y/y y/y Total assets 84 649,7 84 223,5 84 070,7 82 877,2 84 325,2 2% 1 448,0 0% -324,5 Cash and cash equivalents 4 989,9 4 940,2 5 428,9 2 584,1 4 578,0 77% 1 993,9 -8% -411,8
Slide 43: New sale of loans
New sale of loans (PLN mn) Sales in the Business Customer Segment* +47% +35% 3 069 2 432 2 414 1 197 2 196 2 276 +59% y/y 2 082 2 103 691 1 823 628 1 137 1 455 754 603 1 194 1 516 562 1 872 +41% y/y 1 741 1 568 1 220 1 328 1 277 893 909 760 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 Non-r
Slide 44: Additional information
Additional information Employment (FTEs) Alior Bank’s branches -302 -4% -100 -18 -16% +0% -8 7 357 626 -1% 478 7 089 7 036 7 074 7 055 589 548 534 526 210 484 476 482 482 192 190 180 150 110 70 190 188 187 41 23 2 6 668 6 504 6 425 6 410 6 482 393 376 356 346 339 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 1Q 22
Slide 45: 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 38.75 50 (data as at March 31, 2023) Capitalization: PLN bn 5.1 Value of shares in free trade: PLN bn 2.2 P/BV**: 0,7x 40 -9.7% y
Slide 46: 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 • 1H 23 –
Slide 47: 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