Alior Bank Sa · GPW:ALR
Alior Bank Sa — H1 2019 Earnings Presentation
49 slides from Alior Bank Sa's earnings presentation, Aug 6, 2019
Slide 1: Alior Bank S.A. 1H'2019 results presentation
Alior Bank S.A. 1H’2019 results presentation Alior Bank S.A. | August 6th, 2019
Slide 2: Agenda
Agenda 1 Key highlights 2 Financial results 3 2019 guidance 4 Appendix 2
Slide 3: Key highlights
Key highlights Net profit PLN 158 M. Results strongly impacted by: increase in BGF contribution to resolution fund (PLN 110 M) as well as food industry exposure write-off (PLN 161 M). Consistent increase (+9%) in net interest income to PLN 1 632 M in 1H 2019 vs. PLN 1 501 M in 1H 2018. Maintaining h
Slide 4: 1H 2019 financial results (PLN M)
1H 2019 financial results (PLN M) Net result Revenues 2 032 1 963 +70 426 71 -135 114 (+3.6%) 72 329 (-31.7%) 291 347 Total BGF pozostałe przychody Other revenues Składki BFG (BRR contributions oraz FGD) NFCprowizyjny wynik Wynik netto YTD -196 133 Net result YTD 354 wynik NII odsetkowy 1632 (-55.5%
Slide 5: Actions to improve business client segment credit risk quality
Actions to improve business client segment credit risk quality Monitoring, restructuring and Changes in the Loan policies debt collection processes organizational structure Map of industry attractiveness Strengthening of specialist and New approach to monitoring - managerial competences (new continu
Slide 6: 1H 2019 key financial ratios
1H 2019 key financial ratios NIM (y/y) C/I (y/y) -0.58 p.p. +0.06 p.p. 45.15% 4.60% 4.66% 44.57% BGF (BRR) impact 1.93% BGF (BRR) impact 5.41% -4.06 p.p. 43.23% 39.16% 1H 2018 1H 2019 1H 2018 1H 2019 CoR ratio (y/y) ROE ratio (y/y) 2.6% 13.40% +0.8 p.p. -5.18 p.p. 1.29% 1.7% Effect of excluding the
Slide 7: Awards received in Q2 2019
Awards received in Q2 2019 RBL_ among 25 best innovation labs in the world The Global Finance magazine has published 25 world best finance innovation labs. Among the distinguished ones is RBL_. The list has been published as part of the The Innovators 2019 competition. Efma innovation of the month:
Slide 8: Further increase in loan volumes in strategic segments (PLN B)
Further increase in loan volumes in strategic segments (PLN B) (based on management data) New loan sales in micro New leasing sales New cash loan sales High sales level accompanied by growth Maintaining high leasing sales… ...and high level of cash loan sales. of guarantees secured by BGK. 2.01 1.81
Slide 9: Retail client segment: increase in the number of clients
Retail client segment: increase in the number of clients Number of retail clients (M) New clients –current accounts openings (T) +40% 166 T 29.5 32.3 30.0 26.4 4.11 22.3 21.4 4.03 4.02 3.99 Q1’18 Q2’18 Q3’18 Q4’18 Q1’19 Q2’19 3.94 3.90 New clients – cash loans (T) +23% Q1’18 Q2’18 Q3’18 Q4’18 Q1’19
Slide 10: Retail client segment: building a primary relation
Retail client segment: building a primary relation Current accounts sales (T) (number of new current accounts for New to Bank and New to Product clients) Number of new priority clients (T) +29% 22.2 24.2 21.7 +44% 18.7 17.8 16.1 46.4 43.6 43.5 37.7 30.8 Q4’17 Q1’18 Q2’18 Q318 Q4’18 Q1’19* 30.1 Numbe
Slide 11: Retail client segment: increase in the importance of digital channels
Retail client segment: increase in the importance of digital channels +1.2 y/y Sales of cash loans in remote channels (PLN M) 4,6 OUT OF 5 APPSTORE RATING 14 000 of ratings +43% 361 362 320 277 233 253 +1.3 y/y 4,2 OUT OF 5 GOOGLE RATING 16 000 of ratings Q1’18 Q2’18 Q3’18 Q4’18 Q1’19 Q2’19 On-line
Slide 12: Retail client segment: maintaining high quality of service
Retail client segment: maintaining high quality of service NPS own branches NPS franchise branches 86% 86% 78% 78% 78% 79% 63% 63% 60% 59% 59% 60% Q1’18 Q2’18 Q3’18 Q4’18 Q1’19 Q2’19 Q1’18 Q2’18 Q3’18 Q4’18 Q1’19 Q2’19 High service quality maintained in both type of Alior outlets. Our clients apprec
Slide 13: Retail client segment: development of remote channels and mobile banking solutions
Retail client segment: development of remote channels and implementation of the latest mobile banking solutions in Q2 2019 Q2 2019 As part of the adjustment to the requirements of the BLIK phone number PSD2 Directive, electronic banking introduced the transfers possibility of giving consent to third
Slide 14: Business client segment: increase in the number of clients
Business client segment: increase in the number of clients combined with increase in transactions and primary client relation Business clients* Clients with a main transactional relationship (number of business clients in T) (clients paying social security & taxes from Alior account in T) +5% +15% 6
Slide 15: Increase in new micro sales with simultaneous asset quality improvement
Increase in new micro sales with simultaneous asset quality improvement New micro sales (PLN B) Share of the portfolio with BGK guarantees in the micro portfolio Pokrycie gwarancjami Guarantees coverage 90% 2 000 000.00 87% 89% 100% 1 800 000.00 75% 80% 1 600 000.00 1 400 000.00 59% 60% 1 200 000.00
Slide 16: Business client segment: on-line clients acquisition and automated processes
Business client segment: increased efficiency due to on-line clients acquisition and lending increase through automated processes New business clients acquired on-line Automated loan processes (new accounts openings in numbers) (new sales – limit in PLN M) Share of on-line acquisitions of new client
Slide 17: Business client segment: new multi-currency card
Business client segment: new multi-currency card well positioned on the market with growing sales and number of transactions Multi-currency cards issued Multi-currency card transactions (new open cards in items) (turnover in PLN M) Share in the sale of debit cards 7% 7% 10% +195% 12.1 +29% +17% 680
Slide 18: Business client segment: product development and credit risk assessment systems
Business client segment: product development and credit risk assessment systems New virtual card service for secure on-line payments FENIKS KB Credit system (since June 2019) Multiproductivity – 9 products in 1 process: • Business Loan (revolving facility) Automatic downloading of data Data confiden
Slide 19: Development of the product offer in cooperation with PZU
Development of the product offer in cooperation with PZU • Expanding cooperation with PZU by introducing cash loan Bancassurance and mortgage loan insurance Investment • Complete offer of PZU TFI (mutual fund) available to Alior clients products • New model of cooperation between PZU TFI and Alior T
Slide 20: RBL_START acceleration program 2nd edition
RBL_START acceleration program 2nd edition Recruitment Startups Partners Business challenges • New channels • Strengthening to reach a client client relationship • Data analytics • Security Results 200 Applications to the program 78 Meetings with startups 11 Participants invited to the program July’
Slide 21: Agenda
Agenda 1 Key highlights 2 Financial results 3 2019 guidance 4 Appendix 21
Slide 22: P&L statement – primary data
P&L statement – primary data PLN M 1H 2019 1H 2018 Change y/y Change y/y (%) Revenues, including: 2 032 1 963 70 4% Net interest income 1 632 1 501 131 9% Net fee and commission income 329 347 -19 -5% Net trading income and other 71 114 -43 -38% General administrative expenses, including: -906 -886
Slide 23: Volumes
Volumes PLN M 30.06.2019 31.12.2018 30.06.2018 Change 1H’19 Change 1H'19 (%) Change y/y Change y/y (%) Loans, including: 56 664 54 246 52 434 2 418 4% 4 231 8% Retail segment 30 393 29 443 28 363 949 3% 2 030 7% Business segment 26 271 24 802 24 071 1 469 6% 2 201 9% Deposits, including: 64 886 62 4
Slide 24: Net interest income (PLN M)
Net interest income (PLN M) Y/y comparison NII quarterly split NIM* 4.60% 4.63% 4.60% 4.68% 4.66% CoF* 1.22% 1.21% 1.20% 1.20% 1.17% 2 066 1 020 1 020 1 046 1 940 992 996 Net interest income 209 106 103 106 224 119 105 +131 1 632 Other interest income 801 804 828 1 501 763 783 (+8.8%) Interest incom
Slide 25: Net fee and commission (PLN M)
Net fee and commission (PLN M) Y/y comparison NFC quarterly split 553 286 529 283 287 47 265 267 23 36 pozostałe Other feeskoszty cost prowizyjne 23 29 13 15 24 6 39 17 9 19 7 144 koszty prowizyjne related związane to cards z kartami 79 119 Fees cost 66 70 -19 62 65 347 329 179 184 171 170 (-5%) Rev
Slide 26: Bank maintains high level of cost effectiveness (PLN M)
Bank maintains high level of cost effectiveness (PLN M) General and administrative expenses (y/y comparison) General and administrative expenses (quarterly) C/I* 45.2% 44.6% C/I* 45.2% 44.1% 43.1% 49.9% 44.6% 512 886 906 +20 430 411 407 122 72 (+2.2%) 133 17 394 86 17 17 12 43 121 koszty BFG BGF cos
Slide 27: Loan portfolio quality and structure
Loan portfolio quality and structure Total loan portfolio (PLN M) Retail client portfolio (PLN M) Business client portfolio (PLN M) 62 001 32 048 33 059 28 942 58 917 2 347 7% 26 869 2 609 8% 5 014 17% 4 024 15% 961 3% 10 864 33% 989 4% 26 869 46% 28 942 47% 10 491 33% 7 936 27% 8 128 30% 4 221 15%
Slide 28: Constant improvement in the quality of new loan sales
Constant improvement in the quality of new loan sales Sales volume and quality of new cash loan sales (PLN M) Miliony 2 500 2.5% 1 942 2 000 1 722 1 755 1 745 1 707 1 807 1 766 2.0% 1.91% 1.54% 1 654 1 623 Amount of granted credits 1 500 1 262 1 242 1 269 1.5% 1.31% Default rate MOB6 1 000 1.06% 1.0
Slide 29: Capital ratios at a safe level
Capital ratios at a safe level Own funds and capital requirements in total (PLN M) TIER 1 12.92% Own funds 4 076 4 069 8 055 7 780 51 28 11.29% 289 11.75% Capital Wymogi requirements kapitałowe z tytułu 402 for market ryzyka risk rynkowego 10.25% Capital requirements Wymogi kapitałowe z tytułu for o
Slide 30: Agenda
Agenda 1 Key highlights 2 Financial results 3 2019 guidance 4 Appendix 30
Slide 31: 2019 guidance
2019 guidance 1H 2019 actual 2019 guidance 2020 strategic target NIM net interest margin 4.7% 4.6% 4.5% C/I* 44.6% 41% 39% cost/income 39.2%** (previously 42%) CoR 2.3% cost of risk 2.6% 1.7% (previously 1.8%) Gross loan book growth*** PLN 2.8 B PLN 5 B PLN 5 – 6 B (12 months) Strategy update proces
Slide 32: Agenda
Agenda 1 Key highlights 2 Financial results 3 2019 guidance 4 Appendix 32
Slide 33: 1H 2019 net profit decomposition (PLN M)
1H 2019 net profit decomposition (PLN M) 2 032 Trading result & other revenues 71 Net fee & 329 commission 906 Net interest income 1 632 777 110 81 133 291 158 Total revenues General and Net impairment Banking tax Income tax Net profit Effect of BGF Net profit excl. administrative contributions BGF
Slide 34: Change in the portfolio structure in line with the strategy
Change in the portfolio structure in line with the strategy Loan portfolio structure (%) 31 30 29 30 28 Cash loans Retail segment Mortgage 20 20 20 20 loans 20 6 5 5 Other 7 7 11 15 14 Large 16 15 7 7 Business 7 7 9 segment Medium 11 6 6 7 13 Small 7 10 11 9 Micro 8 7 8 8 Leasing 1 3 31.12.2016 31.1
Slide 35: Bank's capital position allows to maintain dynamic loan volume growth
Bank's capital position allows to maintain dynamic loan volume growth (+) portfolio securitization 17bp (+) Q2'18 and Q3'18 result 72bp (+) Q4'18 result 35bp (-) Q4’18 volume increase 1bp (-) Q2'19 volume growth 3bp (+) share tranche 16bp (+) AMA2 33bp (-) Q3’18 volume growth 10bp (-) IFRS9 2nd tran
Slide 36: Macroeconomic outlook
Macroeconomic outlook GDP growth (% y/y) Inflation (CPI % y/y) 2.0 2.2 1.6 4.8 5.1 4.5 3.8 3.1 -.06 -0.9 2015 2016 2017 2018P 2019P 2015 2016 2017 2018P 2019P Real change Year average NBP reference rate (%) Unemployment rate (%) 9.7 8.2 6.6 5.8 5.4 1.5 1.5 1.5 1.5 1.5 2015 2016 2017 2018P 2019P 2015
Slide 37: Income statement
Income statement 01.01.2018 – 30.06.2018 PLN M 01.01.2019 – 30.06.2019 Adjusted data Interest income* 2 066 1 940 Interest expenses -433 -439 Net interest income 1 632 1 501 Fee and commission income 553 529 Fee and commission expenses -225 -182 Net fee and commission income 329 347 The result on fi
Slide 38: Balance sheet
Balance sheet PLN M 30.06.2019 31.12.2018 Cash and balances with the Central Bank 1 786 1 639 Amounts due to banks 999 612 Financial assets 14 110 13 728 Measured at fair value through total income 8 060 7 280 Measured at fair value through P&L 560 515 Measured at amortized cost 5 491 5 932 Derivati
Slide 39: New loans sales (PLN M)
New loans sales (PLN M) Retail loans (new quarterly sales) 3 313 3 063 2 878 2 928 2 997 35 36 39 49 63 391 367 452 Other 363 348 Mortgage loans 2 517 2 887 2 595 2 572 2 466 Consumer loans 06.2018 09.2018 12.2018 03.2019 06.2019 Business loans (new quarterly sales) 4 327 3 901 Other 1 357 3 030 3 2
Slide 40: Alior Bank – shareholding
Alior Bank – shareholding PZU SA PZU SFIO UNIVERSUM Other Shareholders 31.91% 48.06% 7.25% AVIVA OFE AVIVA SANTANDER 7.12% 5.66% Nationale-Nederlanden OFE BlackRock Inc The largest free float among Polish financial institutions. 40 *Based on the number of shares registered at the AGM convened for Ju
Slide 41: Consistent increase in the number of clients
Consistent increase in the number of clients +193 (+4.7%) 4 318 4 178 4 227 4 224 4 125 Q2’18 Q3’18 Q4’18 Q1’19 Q2’19 41
Slide 42: Alior Bank Group – FTE evolution
Alior Bank Group – FTE evolution -1.3% 8 401 8 248 8 228 8 269 8 288 374 442 501 509 503 8 027 7 807 7 760 7 785 7 727 Q2’18 Q3’18 Q4’18 Q1’19 Q2’19 Alior Bank Subordinated entities 42
Slide 43: Alior Bank – number of branches
Alior Bank – number of branches 874 864 861 855 858 244 221 218 215 214 630 643 643 640 644 Q2’18 Q3’18 Q4’18 Q1’19 Q2’19 Franchise branches Own branches 43
Slide 44: Change in the presentation of the transaction margin on FX transactions
Change in the presentation of the transaction margin on FX transactions 2018 2018 Change Before change After change Interest income 3 085 3 085 Fee and commission income 436 274 710 The result on financial assets measured at fair value through 372 -274 98 profit or loss and FX result The result on d
Slide 45: Impact of accounting adjustments on net profit 2018 (PLN M)
Impact of accounting adjustments on net profit 2018 (PLN M) Q1’18 Q2’18 3.3 0.9 - 6.8 - 7.0 - 2.9 195.6 199.8 171.1 154.5 Net result Secutiries/ IFSR 9 EIR Net result Net result IFSR 9 EIR change Net result reported Tax & BGF change adjusted reported adjusted Q3’18 Q4’18 6.0 15.9 - 4.1 - 2.1 172.9 1
Slide 46: Q1 2019 tax adjustment impact on net profit
Q1 2019 tax adjustment impact on net profit (mln PLN) Q1’19 19 - 81 185 122 103 Profit before Tax Net profit prior Tax Net profit after tax to adjustment adjustment adjustment 46
Slide 47: 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 Bank contained in this Presentation are based on the Financial Report of the Alior Bank Group for
Slide 48: Contact
Contact Please direct all inquiries to: relacje.inwestorskie@alior.pl +48 734 412 408 Head of IR Department: Piotr Bystrzanowski piotr.bystrzanowski@alior.pl +48 782 892 015 48
Slide 49: Thank you for attention
Thank you for attention 1H 2019 Alior Bank S.A. results presentation Alior Bank S.A. | 06.08.2019