Alior Bank Sa · GPW:ALR
Alior Bank Sa — Q4 2022 Earnings Presentation
46 slides from Alior Bank Sa's earnings presentation, Mar 10, 2023
Slide 1: Presentation of results for 2022
Presentation of results for 2022 Warsaw, March 3, 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: Very good financial results achieved in 2022 allow us to be optimistic about the future
Very good financial results achieved in 2022 allow us to be optimistic about the future Total revenues (PLN) In 2022, revenues amounted to PLN 4.382 bn +1 269 mn +387 mn • interest income PLN 3.560 bn (+27% y/y) 1 292 1 322 • fees and commissions income PLN 796 mn (+4% y/y) 4 907 1 200 525 1 093 3 6
Slide 5: A successful quarter for Alior Bank - improvement in 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) -0,2% -2,4% -0,2% 83,0 82,9 63,6 56,1 56,0 62,1 4Q 21 4Q 22 4Q 21 4Q 22 4Q 21 4Q 22 C/I 4Q 22 ROE 4Q 22 NIM 4Q 22 COR
Slide 6: Increase in sales and effectiveness of the loan portfolio
BUSINESS Increase in sales and effectiveness of the loan portfolio... CUSTOMERS Segment: Small / Medium / Large Micro segment Total credit limit granted (PLN bn) Total credit limit granted (PLN bn) +7% -14% 0,36 0,38 0,32 0,31 2,1 1,8 0,27 1,8 2,0 1,7 4Q 21 1Q 22 2Q 22 3Q 22 4Q 22 4Q 21 1Q 22 2Q 22
Slide 7: Simultaneous improvement of the portfolio structure and new sales
BUSINESS ... simultaneous improvement of the portfolio structure and new sales CUSTOMERS Balance of assets Small/Medium/Large in regular service (PLN bn) Share of new sales to preferred industries +19% +21 p.p. 41% 10,8 10,7 9,2 9,7 9,0 27% 26% 20% 15% 4Q 21 1Q 22 2Q 22 3Q 22 4Q 22 IV kw. 21 I kw. 2
Slide 8: Upward trend of key performance measures
BUSINESS Upward trend of key performance measures CUSTOMERS Segment: Micro / Small / Medium / Large Number of active cards (k) % of instructions received remotely +3% +13 p.p. 44% 45% 38% 39% 103,1 102,4 101,1 101,8 32% 99,6 4Q 21 1Q 22 2Q 22 3Q 22 4Q 22 4Q 21 1Q 22 2Q 22 3Q 22 4Q 22 Number of Custo
Slide 9: Technological foundations of growth – the latest initiatives
BUSINESS Technological foundations of growth – the latest initiatives CUSTOMERS New automatic online business account application for IDG* Launch of the new internet banking project for Business Customers 5 min. 40 sec. mobile Latest security The best user experience Fastest account opened since 85%
Slide 10: 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) -57% -0,5% 1,40 1,20 76,0 75,8 0,88 1,00 0,67 75,5 75,3 0,66 75,0 0,80 0,60 0,44 0,38 0,40 0,20 0,00 4Q 21 1Q 22 2Q 22 3Q 22 4Q 22 4Q 21 1Q 22 2Q 22 3Q 22
Slide 11: Growth of the Bank's key products – cash loans
RETAIL Growth of the Bank’s key products – cash loans* CUSTOMERS Sale of loans (PLN bn) Number of Customers with a loan (k) -6% -1% 417 1,41 409 1,35 402 397 1,30 1,32 392 1,20 4Q 21 1Q 22 2Q 22 3Q 22 4Q 22 4Q 21 1Q 22 2Q 22 3Q 22 4Q 22 Gross consumer loan portfolio (PLN bn) -10% Development of the
Slide 12: Development of the Bank's key products – Consumer Finance loans
RETAIL Development of the Bank’s key products – Consumer Finance (CF) loans CUSTOMERS Sale of CF loans (PLN bn) Number of CF Customers (k) -22% 0% 1,52 1600 1 367 1 324 1 337 1 349 1 367 1,17 1,18 1400 0,91 0,99 1200 1000 800 600 400 200 0 4Q 21 1Q 22 2Q 22 3Q 22 4Q 22 4Q 21 1Q 22 2Q 22 3Q 22 4Q 22
Slide 13: 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) 2% +25% 610 636 4,13 4,16 578 4,09 4,06 4,10 541 508 4Q 21 1Q 22 2Q 22 3Q 22 4Q 22 4Q 21 1Q 22 2Q 22 3Q 22 4Q 22 Number of motorway jour
Slide 14: 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) +25% +19% 882 928 11,0 791 839 740 10,2 10,3 9,5 9,2 4Q 21 1Q 22 2Q 22 3Q 22 4Q 22 4Q 21 1Q 22 2Q 22 3Q 22 4Q 22 Structure of Al
Slide 15: Alior Bank – Digital Leader
Alior Bank – Digital Leader BOT Offer – implementation of the offer module in selected infoNINA thematic bundles The task of the sales module is to encourage the customer to get acquainted with the loan offer when trying to contact the Bank’s hotline. A short proposal will be sewn into selected topi
Slide 16: In 2022 the Bank addressed ESG activities comprehensively
In 2022 the Bank addressed ESG activities comprehensively Environmental Protection Social responsibility Financing the transformation Pro-ecological transformation Dialogue and cooperation Mental and physical health ~5.6 thousand employees 8 eco-products and eco- Adoption of a volunteering use PZU Z
Slide 17: Social Responsibility of Alior Bank
Social Responsibility of Alior Bank “Active with Alior” • More than a dozen sporting and recreational events in 2022 • Promotion of a healthy lifestyle and active leisure. • In Q4 2022, we continued our partnership in the organisation of sporting and recreational events (including Wild Run in Wrocła
Slide 18: #WeSupportGamers
#WeSupportGamers Poznań Game Arena – the largest computer games and multimedia entertainment fair in our part of Europe. In our zone, participants could set up an account for players and apply for a unique debit card with the image of Ashe - a champion from League of Legends. New account holders rec
Slide 19: Credit risk
19 Credit risk
Slide 20: Change in credit policy and NPL reduction strategy reduced CoR and improved portfolio quality
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 2000 2,80% 2,39% -57 mn PLN y/y 18
Slide 21: 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** 00% 11,77% 11,31% 8 10,98% 1,64% 00% 10,70% 8 1,57% 1,54% 7 1,46% 9,80% 00% 7 57,27% 1,33% 55,92% 56,25% 55,81% 7,25 6 6,94 6,79 00% 6,54 53,67% 5,89 6 00% 5 4Q 21
Slide 22: 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 The levels of TIER I and TCR capital adequacy ratios as at the end 13,14% 13,48% 12,99% 13,06% 13,00% of 4Q 22 significantly exceed the regulatory minimum by: 435 bps 12,55% 12,63%
Slide 23: Financial results
23 Financial results
Slide 24: Income statement
Income statement PLN mn 4Q 21 4Q 22 % y/y y/y 2021 2022 % y/y y/y Total Income 934,8 1 322,1 41% 387,3 3 637,1 4 381,6 20% 744,5 Net interest income 757,9 1 139,1 50% 381,2 2 798,2 3 559,9 27% 761,6 Net fee and commission income 216,1 183,2 -15% -32,9 766,7 796,1 4% 29,3 Other income -39,1 -0,2 - 38
Slide 25: High market interest rates have a positive impact on interest income
The high level of market interest rates has a positive impact on the level of interest income and enables building capital that will finance future lending Interest income and expenses (PLN mn) Interest margin and financing cost* 000 +95% +120% 5,81% 5,92% 000 5 915 +6% 5,11% 525 1 812 4,58% 000 1 7
Slide 26: High interest rates make it difficult to improve fees and commissions income
The high level of interest rates renders it difficult to improve fees and commissions income Fees and Commissions Income (PLN mn) -15% +4% -9% Bank accounts, transfers, cash 221 operations (net) 216 796 202 767 191 49 -4% y/y 49 183 -14% y/y 178 Bancassurance (net) 43 185 45 42 21 -16% y/y 22 20 -27
Slide 27: Despite the increase in costs, the Bank is improving operational efficiency
Despite the general increase in costs, the Bank is improving its operational efficiency Operating costs (PLN mn) C/I ratio** +16% +0% +26% 591 1 998 - - 59,5% C/I normalized*** 62 - Employee 493 195 457 214 expenses 456 - C/I reported 1 8 1 583 98 -8% y/y 394 97 53 General and 66 -95% y/y 49,3% 106
Slide 28: The main financial targets of the strategy
The main financial targets of the strategy „Your Bank of everyday life, your Bank for the future” Profitability 12.2022 12.2024 ROE 11.3% >13% C/I 45.6% <45% Capital Tier 1 13.0% >13.5% TCR 14.2% >15% Credit risk CoR 1.5% <1.6% NPL 9.8% <10% 28
Slide 29: Why Alior Bank?
Why Alior Bank? ▪ Safe and stable capital position ▪ 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 housing loa
Slide 30: Other issues
30 Other issues
Slide 31: Polish economy growth continues to slow, first signs of disinflation
The growth rate of the Polish economy continues to slow down, we can observe the first signs of disinflation GDP in 4Q 22 continues to slow down, amid the drop in consumption… … and persistently high interest rates … GDP growth (viable, %, y/y) and its structure (p.p.) 14,0 Interest rates in the CEE
Slide 32: The Polish economy is still a leader compared to the EU and the region
The Polish economy is still a leader compared to the EU and the countries of the region Polish industry is at the forefront compared to the EU… … despite slowing consumption… Industrial production Retail sales rate of growth (Dec'19=100, swda) (Dec'19=100, fixed prices) 135 130 125 120 115 105 110 9
Slide 33: Economic growth remains burdened by high inflation and interest rates
Economic growth remains burdened by high inflation and interest rates, as well as by a weakening external economic situation Economic growth is in a downward trend Inflation will slow down only in 2025 GDP growth y/y with main components y/y Price index y/y and MPC interest rate 8,0 6,8 16 14,4 14,3
Slide 34: We have been successfully addressing climate-related challenges
We have been successfully addressing climate-related challenges We cooperate with: 28 PLN 1.2 bn PLN 1.2 bn thousand balance volume of new eco- new Customers as at the end of sales at the end of as at the end of 4Q 22* 4Q 22* 4Q 22* ECO OFFER in 4Q 22 #EKO category Eco-benefits for credit Eco Loan C
Slide 35: Awards and promotion of Alior Bank's offer
Awards and promotion of Alior Bank’s offer The highest – among Polish financial institutions – 22nd place in the ranking of the British daily Financial Times in Special award in the “Trustworthy Employer” the “Banking and Financial Services” category. The ranking competition – for special commitment
Slide 36: One-offs affecting reported results of Alior Bank Group
One-offs affecting reported results of Alior Bank Group Impact on Impact on 2021 (PLN mn) gross profit net profit 1Q 2Q 3Q 4Q Tax asset write-off related to the operations of the Bank's branch in Romania -25 -25 -25 -25 TOTAL 2021 -25 -25 Impact on Impact on 2022 (PLN mn) gross profit net profit 1Q
Slide 37: Alior Bank's investment services
Alior Bank’s investment services Alior Bank’s Brokerage House Alior TFI In 4Q 22, the turnover on the WSE was significantly lower In October 2022, the Alior Odpowiedzialny sub-fund was than in the first half of the year, which translated into a lower launched, which promotes social and environmental
Slide 38: Activities of Alior Leasing
Activities of Alior Leasing Sale of lease and loans (PLN bn) Number of customers (in thousand) Lease portfolio and loans (PLN bn) +9% -6% -16% +32% -25% +23% 74,3 69,9 68,3 6,0 5,8 3,0 +58% 5,4 2,7 55,4 5,0 2,3 2,2 3,9 35,1 2019 2020 2021 2022 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 • Alio
Slide 39: 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% -4% -1% -3% -2% -3% 38 593 37 933 37 230 25 743 63 579 63 676 62 072 24 986 24 842 4 328 4 277 4 328 6 225 6 170 6 106 24 986 25 743 24 842 344 279 251 15 549 15 937 15 985 6
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 -2% +4% -14% -2% -1% 72 006 -4% 72 363 70 777 1 059 1 255 49 020 51 733 51 071 22 985 1 28
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) 4Q 21 1Q 22 2Q 22 3Q 22 4Q 22 % q/q q/q % y/y y/y Total assets 83 048,4 84 649,7 84 223,5 84 070,7 82 877,2 -1% -1 193,5 0% -171,2 Cash and cash equivalents 3 763,4 4 989,9 4 940,2 5 428,9 2 584,1 -52% -2 844,8 -31% -1
Slide 42: New sale of loans
New sale of loans (PLN mn) Sales in the Business Customer Segment* +4% +8% 2 729 2 432 2 414 2 196 2 276 865 2 103 2 082 691 1 818 1 823 628 1 137 1 619 754 1 455 1 363 666 541 603 1 194 1 516 +141% y/y 436 562 1 864 1 741 1 568 1 152 1 220 1 328 1 277 1 078 927 893 909 760 -52% y/y 1Q 20 2Q 20 3Q 2
Slide 43: Additional information
Additional information Employment (FTEs) Alior Bank’s branches -368 -5% -99 +38 -16% +1% -14 7 441 7 357 633 626 -3% 7 089 7 074 589 483 7 036 548 534 478 193 192 210 210 484 476 482 190 190 188 180 110 34 41 150 23 2 6 749 6 668 6 425 6 410 6 482 406 393 376 356 346 4Q 21 1Q 22 2Q 22 3Q 22 4Q 22 4Q
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 : 34.27 PLN (data as at December 30, 2022) Capitalisation : 4.5 PLN bn 60 Value of shares in free trade : 2.0 PLN bn P/BV**: 0.7x 50 -
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 • 1Q 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