Alior Bank Sa · GPW:ALR
Alior Bank Sa — H1 2020 Earnings Presentation
47 slides from Alior Bank Sa's earnings presentation, Aug 19, 2020
Slide 1: Presentation of H1 2020 Financial Performance
Alior Bank SA Presentation of H1 2020 Financial Performance Alior Bank S.A. Group | 19 August 2020 | Consolidated Performance of the Group
Slide 2: Agenda
Agenda 1 Key issues 2 COVID19 impact on the Bank's operations 3 Operations 4 Financial performance 5 Credit risk 6 Appendices 2
Slide 3: Key issues
Key issues 3
Slide 4: Key issues
Key issues Bank's safe capital position. As a result of write-offs and one-off provisions TIER1 at the level of 13.14% and TCR at the totalling approx. PLN 495 M related mainly to level of 15.72%. the COVID-19 epidemic, the Bank recorded a Surplus above TIER1 regulatory minima totals negative net re
Slide 5: Bank's stable position: considerable TIER1 buffer exceeding regulatory minimum
Bank's stable position: considerable TIER1 buffer exceeding regulatory minimum TIER1 and TCR capital ratios at the end of Q2 2020 leave buffers above regulatory minima of 464 b.p. (PLN 2 223 M) and 522 b.p. (PLN 2 514 M) respectively. Capital position TIER 1 13,37% 13,48% 13,14% 12,92% 12,94% 12,42%
Slide 6: Impact of individual events on the H1 2020 performance
Impact of individual events on the H1 2020 performance Total impact of recurrent Total impact of one-off events on the net profit/loss PLN M events on the net profit/loss PLN -495 M PLN -165 M - 607 160 89 93 178146 76 93 64 80 -483 -513 339 12 Net profit Net profit Impact of Impact of the Impact of
Slide 7: Sales of Bank's key products in the times of COVID-19
Sales of Bank's key products in the times of COVID-19 (PLN M) July vs. average sales in Jan.-Feb. period Loan - 21% Mortgage loans + 101% 515 523 308 423 412 283 388 313 210 265 167 163 173 139 styczeń February January March kwiecień luty marzec April maj May czerwiec June lipiec July styczeń Januar
Slide 8: Innovations at the Alior Bank in the times of epidemic
Innovations at the Alior Bank in the times of epidemic Customer remote verification Joint activities with start-ups and renowned The implementation of the method of verifying partners customers' identity without visiting the branch, • An option to arrange a visit to the branch office which has alrea
Slide 9: Major distinctions and awards received in Q2 2020
Major distinctions and awards received in Q2 2020 Top quality of Quality of customer Telemarketer Best loan rendered BM services service of the Year • Fist place in 11th "Golden Banker" • For a consecutive year in a row • First place in the "Golden • First place in the "Telemarketer poll in the cash
Slide 10: COVID-19 impact on the Bank's operations
COVID-19 impact on the Bank's operations 10
Slide 11: COVID-19: Comprehensive assessment of impairment in a pandemic environment
COVID-19: Comprehensive assessment of impairment in a pandemic environment Macroeconomic scenarios for estimating impairment Influenced areas covered by the COVID-19 write-down Scenario Characteristics Probability Growing Probability of Decrease in recoverability of Default (PD) collective portfolio
Slide 12: COVID-19: repayment holidays
COVID-19: repayment holidays Retail Customer Business Customer Lease No. of repayment holidays granted: 46 554 3 841 21 897 Share (%) of applications processed positively 95.2% 90.3% 99.7% Repayment holidays granted in volume terms (PLN M) 4 461 4 742 1 725 Share (%) of repayment holidays granted in
Slide 13: Alior Bank measures representing material support for the Customers
Alior Bank measures representing material support for the Customers Repayment Holidays BGK guaranteed loans Subsidies under PFR Financial Shield • No. of repayment holidays granted: • In the micro and SME segments Alior Bank extended: • 46 554 (Retail) • Accepted and disbursed funds under • 3 841 (B
Slide 14: Impact of interest rate cuts on the financial performance
Impact of interest rate cuts on the financial performance Impact of interest rate reductions on the financial performance Measures taken by the Bank According to the published Current Report No. 14/2020, the Bank estimates the impact of the interest rate cut* on the quarterly net profit/loss in the
Slide 15: Actions taken to minimise the impact of COVID-19
Actions taken to minimise the impact of COVID-19 To SUMMARY be decided Income-side initiatives Cost-side initiatives • Changes in the Bank's Table of Fees and Charges • optimization of costs of rented office space and fuelling growth of fee income number of branch offices • an increase of fee income
Slide 16: Operations
Operations 16
Slide 17: Effective Building of a Lasting Relationship with the Customers
RETAIL Effective Building of a Lasting Relationship with the Customers CUSTOMERS Sales of savings & current accounts (‚000) Noumber of retail Customers (M) (No. of savings and current accounts opened for New to Bank i New to Product customers) 119 thous. -14% 4.19 4.23 4.15 46.38 4.11 4.10 43.50 43.
Slide 18: Growing significance of digital channels
RETAIL Growing significance of digital channels CUSTOMERS Sales of cash loan via remote channels (PLN M) Users of Alior Bank's mobile applications ('000) -19% +52% 387 544 361 362 383 504 338 456 292 398 357 315 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020
Slide 19: Significant increase of customer satisfaction index
RETAIL Significant increase of customer satisfaction index CUSTOMERS Own branch NPS Relationship NPS +9 p.p. 35% 36% 68% 72% 63% 63% 64% 64% 28% 29% 27% 24% Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20 Partnership outlet NPS 86% 86% 85% 85% 84% 87% We simplify
Slide 20: Micro customers: No. of customers up and improved relationship
SEGMENT MICRO Micro customers: No. of customers up and improved relationship MICRO No. of business customers in Micro segment ('000) New business customers in Micro segment ('000) -13% +15% 10,9 9,4 7,5 7,9 6,5 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20 182 192 200 201 175 No. of Micro segment customers pay
Slide 21: High coverage with guarantees of new sales transactions
MICRO High coverage with guarantees of new sales transactions MICRO Micro new sales coverage with BGK guarantees Micro portfolio coverage with BGK guarantees 93% 97% 97% 55% 88% 92% 92% 54% 54% 52% 49% 45% Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20 Q4 '18 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 • Coverage
Slide 22: Business customers: transformation into more active and sustainable relationships
BUSINESS Business customers: transformation of business customer base into more active CUSTOMERS and sustainable relationships New business customers in Small /Medium /Large Enterprises segments BankConnect Customers* (number of customers) (number of customers) +14%** -7%** 837 940 1 000 379 677 352
Slide 23: Robust new loan sales to companies in Q2 2020
BUSINESS Robust new loan sales to companies in Q2 2020 CUSTOMERS Limit of new sales* Sales limit using automatic decision-making process (M PLN, small , medium and large) (M PLN, small, medium and large enterprise segment) 2 371 123 180 184 188 1 463 170 1 385 157 159 50 248 1 197 58 180 67 47 118 2
Slide 24: Above 2300 businesses, PLN 5,5 bn
The proposal of Alior Bank offered jointly with the Bank of National Economy (BGK) Alior Bank is one of the main distributors of portfolio guarantees jointly with BGK Alior Bank was one of the first to modify the guarantee schemes in the times of COVID-19 took advantage of special terms and conditio
Slide 25: The Financial Shield of the Polish Development Fund (PFR) at Alior Bank
The Financial Shield of the Polish Development Fund (PFR) at Alior Bank Alior Bank as one of 17 banks has been involved in The Financial Shield, government scheme from the very beginning. It is offered for companies and enables full support of subsidy application in the online process. PFR Financial
Slide 26: Financial performance
ta "a a =n Al LAY il Financial performance -
Slide 27: Profit and Loss Account - basic data
Profit and Loss Account - basic data PLN M H1 2020 H1 2019 Change y/y Financial income, including: 1 741 2 030 -289 Net interest income 1 499 1 634 -135 Net fee and commission income 290 325 -35 Trading and other income -47 71 -119 Bank's operating expenses -877 -906 29 Net write-off income -1 211 -
Slide 28: Interest net income
Interest net income (M PLN) Comparison y/y Net interest income on a quarterly basis Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 1 717 - income 4.13% NIM* 4.70% 4.63% 4.52% 4.34% excluding the impact of 2 067 (- 249) the CJEU judgment, interest rate cuts and 1.17% 1.14% 1.12% 1.02% 0.72% -12% 1 818 repay
Slide 29: Net fee and commission income
Net fee and commission income (PLN M) Comparison y/y Net fee and charges income on quarterly basis 350 400 549 564 Wynagrodzenie z tyt. pośrednictwa 302 305 294 Remuneration for sprzedaży insurance 284 brokerageubezpieczeń 269 300 24 25 47 21 24 43 Paymentkart Obsługa cards and credit płatniczych i
Slide 30: Bank has maintained high level of cost efficiency
Bank has maintained high level of cost efficiency (PLN M) Operating expenses (comparison y/y) Operating expenses on a quarterly basis C/I* 44.6% 42.8% 43.0% 50.7% 50.3% -29 906 877 -3.2% 133 113 121 120 482 394 372 89 395 213 190 352 12 24 BGF costs Koszty BFG 62 12 61 61 12 59 Amortization Amortyza
Slide 31: Impact of CJEU judgement on the Bank's performance
Impact of CJEU judgement on the Bank's performance Total Total PLN M Q3 2019 Q4 2019 Q1 2020 Q2 2020 H2 2019 H1 2020 Impact on the gross result -45 -90 -135 -64 -30 -94 Impact on other operating expenses -57 -186 -243 0 -99 -99 Impact on the gross result -102 -276 -378 -64 -129 -193 31
Slide 32: Credit risk
Credit risk 32
Slide 33: Structure and quality of the loan portfolio
Structure and quality of the loan portfolio Total loan portfolio (PLN M) Retail customer portfolio (PLN M) Business customer portfolio* (PLN M) 26 801 26 498 34 492 35 213 61 294 61 710 2 019 8% 2 279 9% 2 820 8% 3 096 9% 4 888 18% 5 257 20% 26 498 43% 34% 743 3% 744 26 801 44% 11 375 33% 12 077 3%
Slide 34: Continuous improvement of the quality of new loan sales
Continuous improvement of the quality of new loan sales Sales volume and quality of new cash loans (PLN M) 2 500 5,0% 1 942 2 025 2 009 2 060 1 722 1 755 1 745 1 707 1 807 1 766 1 728 1 654 2 000 4,0% 1 623 Loan amount granted 1 461 1 500 1 262 1 242 1 269 3,0% Default rate MOB6 (6 1 000 1,91% 2,0%
Slide 35: COVID-19: Portfolio by pandemic risk level
COVID-19: Portfolio by pandemic risk level Change of turnover – Jun. 2020 vs. Feb. 2020 Low risk industries Medium risk industries High risk industries Low risk industries, resilient or gaining in Industries threatened by interrupted supply Industries severally hit by economic importance, such as: p
Slide 36: COVID-19: Portfolio by pandemic risk level
COVID-19: Portfolio by pandemic risk level Sensitivity of KB portfolio Sensitivity of KB TOP100 portfolio Sensitivity of the regular KB TOP100 portfolio 13% 16% 18% 5% 4% 25% Low risk industries 62% 80% 78% Medium risk industries High risk industries Gross balance sheet value of the micro and other
Slide 37: COVID-19: Sensitivity of cash loan portfolio to the risk of employment termination
COVID-19: Sensitivity of cash loan portfolio to the risk of employment termination Share in total cash loan portfolio Scale of sensitivity to the risk of employment 16,6% termination based on: (including 16.4% • source of income accounting for 20,4% • employment sector repayment holidays) • age • re
Slide 38: COVID-19: Change of lending policy
COVID-19: Change of lending policy Area Scope of changes Industry policy • Implementation of additional analysis and requirements for risk acceptance for customers in directly and indirectly exposed industries • Imposing financing constraints on the customers generating income under civil law contra
Slide 39: Appendices
Appendices 39
Slide 40: No. of customers ['000]
No. of customers ['000] +141 (+3.3%) 4 376 4 424 4 459 4 224 4 318 4 313 225 232 230 201 207 214 4 023 4 111 4 099 4 152 4 192 4 230 Q1’19 I kw.'19 IIQ2’19 kw.'19 IIIQ3’19 kw.'19 IVQ4’19 kw.'19 I Q1’20 kw.'20 IIQ2’20 kw.'20 Retail customers Business customers 40
Slide 41: Alior Bank Group – headcount
Alior Bank Group – headcount +0.8% Including 395 FTEs related to RUCH SA press 8 269 8 288 8 359 distributor 8 159 8 143 8 086 509 503 505 894 519 529 7 760 7 785 7 654 7 624 7 557 7 465 IQ1’19 kw.'19 II Q2’19 kw.'19 IIIQ3’19 kw.'19 IVQ4’19 kw.'19 I Q1’20 kw.'20 II Q2’20 kw.'20 Alior Bank Subsidiari
Slide 42: Alior Bank branch offices
Alior Bank branch offices -12.6% 855 858 832 820 791 750 215 214 213 212 207 205 640 644 619 608 584 545 IQ1’19 kw.'19 II Q2’19 kw.'19 IIIQ3’19 kw.'19 IVQ4’19 kw.'19 I Q1’20 kw.'20 IIQ2’20 kw.'20 Agencies Own branches 42
Slide 43: Macroeconomic prospects
Macroeconomic prospects GDP growth (% y/y) Inflation rate (CPI % y/y) 3,3 4,9 5,1 4,1 4,0 2,3 2,1 3,1 2,0 1,7 2016 2017 2018 2019 2020F 2021F -0,6 -3,6 2016 2017 2018 2019 2020P 2021F Actual change Average annual National Bank of Poland (NBP) reference rate (%) Unemployment rate (%) 8,2 7,5 6,6 5,8
Slide 44: Alior Bank shareholding structure
Alior Bank shareholding structure* 31.91% PZU SA Group 48.06% 31.91% 51.92% 7.25% Other shareholders 7.12% 8.92% 5.66% Nationale-Nederlanden OFE 7.25% AVIVA OFE AVIVA Santander The largest free float among Polish financial institutions. 44 *Based on the number of shares registered at the Ordinary Ge
Slide 45: Disclaimer
Disclaimer This document has been prepared by Alior Bank S A . ("Bank", "Company”) solely for the Presentation purposes. Any forward looking statements concerning future economic and financial performance of the Bank contained in this Presentation are based on the Report of the Alior Bank Capital Gr
Slide 46: Contact
Contact Should you have any questions or querries do not hesitate to send them at: relacje.inwestorskie@alior.pl Director of Investor Relations Department: Dominik Prokop ph. +48 508 700 362 46
Slide 47: Thank you for your attention.
Thank you for your attention. Presentation of H1 2020 financialperformance 47 Alior Bank S.A. Group | 28 February 2020 | Consolidated performance of the Alior Bank S.A. Group | 19 August 2020 | Consolidated Performance of the Group