Alior Bank Sa · GPW:ALR
Alior Bank Sa — H1 2017 Earnings Presentation
36 slides from Alior Bank Sa's earnings presentation, Aug 10, 2017
Slide 1: Alior Bank S.A. 1H'17 Results Presentation
ALIOR BANK S.A. 1H’17 RESULTS PRESENTATION August 10, 2017 1
Slide 2: Agenda
AGENDA 1. New Management Introduction & Key Highlights 2. Operational Performance 3. Appendix 2
Slide 3: New Management Introduction & Key Highlights
1. NEW MANAGEMENT INTRODUCTION & KEY HIGHLIGHTS 3
Slide 4: New Management Board
NEW MANAGEMENT BOARD 6 50% Alior persons internal appointments 110y+ 50% external experience of relevant professional experience at EY, PwC, MCI, other banks 4
Slide 5: New Management Board Ready for Digital Disruptor Transformation
NEW MANAGEMENT BOARD READY FOR DIGITAL DISRUPTOR TRANSFORMATION Management Board Members Michał Jan Filip Sylwester Urszula Katarzyna Celina Chyczewski Gorczyca Grzebinoga Krzyżanowska- Sułkowska Waleśkiewicz Piękoś Acting Chief Chief Financial Chief Legal Chief Business Chief Risk Officer Chief Tec
Slide 6: Key Appointments to Strengthen Alior's Agility and Effectiveness
KEY APPOINTMENTS TO STRENGTHEN ALIOR’S AGILITY AND EFFECTIVENESS Monika Stołowska Maciej Surdyk Bruno Ferreira Executive Director Executive Director Executive Director HR Division Business Clients Division Corporate Development Division With Alior since 2014. With Alior since 2013. Responsible for c
Slide 7: Strong Underlying Business Performance
STRONG UNDERLYING BUSINESS PERFORMANCE Q2’17 BOTTOM LINE DECOMPOSITION (PLN M) 12 Other income 99 Trading result 118 NFC 503 719 216 NII 40 49 40 29 141 12 Market consensus 100 Total Administra Net OZE Banking Income Net Integration Fair value Net profit revenues tive impairment provisioning tax tax
Slide 8: Key Highlights
KEY HIGHLIGHTS • Q2’17 net profit of 100 m (above market consensus even with increased impairment charges for OZE of 40 m) • 1H’17 NIM at 4.8% vs. strategic target of 4.5% • CoR in 1H’17 at the level of 1.8% vs strategic target of 1.7% • Synergies execution on track. Synergies plan maintained (2017:
Slide 9: 2017 Outlook
2017 OUTLOOK CURRENT 2017 NET PROFIT MARKET CONSENSUS: PLN 408 M 1H2017 2017 EoY Strategy (2020) NIM 4.8% 4.6%-4.7% 4.5% CoR 1.8% 1.8% 1.7% C/I 55% 54% 39% C/I 52% 49% 39% excl. Integration cost Alior 2017 EOY Guidance and comparison to strategic targets: • NIM: already above 4.5% target, which safe
Slide 10: Alior on Track to Achieve Ambitious ROE of 14%
ALIOR ON TRACK TO ACHIEVE AMBITIOUS ROE OF 14%. ILLUSTRATIVE EXAMPLE: ROE CONSIDERATIONS (%) Strategy implementation 14 BPH core merger synergies 10.7 1H’17 banking sector ROE: 7,4% 5.8 1H’17 2017* Strategic target Information about operational plan for 2018-2020 will be presented post Q3’17 results
Slide 11: 1H'17 Net Synergies Impact on Track, Outlook for 2017 Positive
1H’17 NET SYNERGIES IMPACT ON TRACK, OUTLOOK FOR 2017 POSITIVE THE PREVIOUSLY ANNOUNCED PLAN REMAINS UNCHANGED. BULK OF SYNERGIES ALREADY IN 2018. in PLN m 2017 2018 2019 Synergies 167 351 374 (incl. revenue dissynergies) Integration cost -195 0 0 2017 SYNERGIES AND INTEGRATION COST STATUS 2017 Syne
Slide 12: OZE (Renewable Energy) Exposures Sufficiently Provisioned
OZE (RENEWABLE ENERGY) EXPOSURES SUFFICIENTLY PROVISIONED • Total Alior Bank wind farm exposure: ~ 2% of total loan book (PLN 1,1 bn) • Total Provisioning: PLN 87 PLN (14% coverage of NPL) of which PLN 53 m in 1H’17 • All exposures are serviced on time • Previously communicated provisiong plan maint
Slide 13: Agenda
AGENDA 1. New Management Introduction & Key Highlights 2. Operational Performance 3. Appendix 13
Slide 14: Operational Performance
2. OPERATIONAL PERFORMANCE 14
Slide 15: Key Financials
KEY FINANCIALS PLN M (quarterly) Q1'17 Q2'17 ch. qoq (%) ch. qoq (PLN M) Total revenues 868 948 9.3 80 General administrative expenses -489 -503 2.8 -14 Net impairment -212 -256 21.0 -44 Banking tax -50 -49 -0.7 0.3 Gross profit 118 140 19.4 23 Income tax -35 -40 14.9 -5 Net profit 82 100 21.3 18 PL
Slide 16: Key Financials
KEY FINANCIALS % (quarterly) Q1'17 Q2'17 ch. qoq (%) ch. qoq (pp) ROE 5,3 6,3 19,6 1,0 ROA 0,5 0,7 20,7 0,1 C/I 56,4 53,0 -6,0 -3,4 CoR -1,6 -1,9 15,9 -0,3 L/D 95,8 95,0 -0,9 -0,9 NPL ratio 9,9 11,2 13,0 1,3 NPL coverage ratio 56,3 53,0 -5,9 -3,3 TCR 14,4 13,6 -5,2 -0,8 Tier 1 12,2 11,5 -5,0 -0,6 16
Slide 17: Strong Loan Book Growth Across All Major Segments
STRONG LOAN BOOK GROWTH ACROSS ALL MAJOR SEGMENTS LOAN BOOK SPLIT (in PLN bn) +6% ; +2.8 +1.4% ; +0.7 48.4 49.1 46.3 1.5 Other business 1.7 Factoring 0.8 0.8 1.3 0.8 8.2 8.4 Investment loans 7.5 45% 43% 44% Business Working Capital 11.3 11.5 10.7 0.8 0.7 Other retail 0,8 0.8 Mortgage other 0.8 0.8 M
Slide 18: Level of Deposits Reaches Desired Mix of Current and Term Accounts
LEVEL OF DEPOSITS REACHES DESIRED MIX OF CURRENT AND TERM ACCOUNTS (in PLN bn) L/D = 95% L/D=85% Retail +30% ; +7.2 -1.2% ; -0.4 32.2 31.8 24.6 14.0 12.8 14.7 18.2 19.0 Term, own 9.9 banking sec., other Q2’16 Q1’17 Q2’17 Current Corporate L/D=111% +48% ; +6.4 +8% ; +1.5 18.3 19.8 13.4 10.0 11.5 9.4
Slide 19: Key Credit Risk Ratios
KEY CREDIT RISK RATIOS NPL total (%) Market avg.* +2.2 pp -0.1 pp 13.2 13.1 13.0 12.1 11.0 10.9 -0.2 pp 11.0 8.2 2.9 2.6 2.5 2.4 Q2'16 Q1'17 Q2'17 Q2'16 Q1'17 Q2'17 Q2'16 Q1'17 Q2'17 CORPORATE RETAIL MORTGAGE Coverage ratio (%) +2 pp -12 pp 66 67 68 +2 pp 54 48 42 49 60 31 33 33 49 Q2'16 Q1'17 Q2'17
Slide 20: Strong Profitability Maintained. 1H'17 NIM Reaches 4.8%
STRONG PROFITABILITY MAINTAINED. 1H’17 NIM REACHES 4.8% ALIOR NIM DEVELOPMENT (%) +0.6 pp NIM 4.8 4.2 4.1 1H’16 2016 1H’17 CoR -2.0 -1.9 -1.8 -0.2 pp +0.8 pp NIM - CoR 3.0 2.2 2.2 1H’16 2016 1H’17 NIM formula for 1H’16: NII for 1H’16 annualized, divided by average of IEA from 2015 and 1H’16; NIM for
Slide 21: Fees and Commissions
FEES AND COMMISSIONS (in PLN m) +55% ; +42 76 117 118 Net F&C +53% ; +72 209 F&C income 195 137 103 102 fees related to C/A, loans, 71 20 transfers 17 29 46 53 bancassurance 25 33 payment and credit 13 30 cards servicing Q2’16 Q1’17 Q2’17 brokerage fees -61 -78 -91 F&C expenses +30% ; +49 21
Slide 22: Capital Position Supports Future Loan Origination Objectives
CAPITAL POSITION SUPPORTS FUTURE LOAN ORIGINATION OBJECTIVES Issue of shares preceding Purchase of BPH Core Merger with BPH Core Recognition of BPH Core the purchase of BPH Core negative goodwill in capital position 20.9% 16.1% 17.3% 14.4% 13.6% 13.5% 13.6% 12.5% 13.4% 12.1% 11.3% 11.5% 10.6% 9.7% Q
Slide 23: Agenda
AGENDA 1. New Management Introduction & Key Highlights 2. Operational Performance 3. Appendix 23
Slide 24: Appendix
3. APPENDIX 24
Slide 25: Polish Macro Outlook
POLISH MACRO OUTLOOK GDP growth (% yoy) Inflation (CPI % yoy) Unemployment rate (%) 4,00 1,8 13,4 3,80 3,30 0,9 11,4 2,70 9,7 0,0 1,40 8,3 6,9 -0,6 -0,9 2013 2014 2015 2016 2017F 2013 2014 2015 2016 2017F 2013 2014 2015 2016 2017F End of period FX rate (EUR/PLN) NBP reference rate (%) WIBOR 6M (%) 4
Slide 26: Polish Banking Sector – Growth of the Main Balance Sheet Figures
POLISH BANKING SECTOR – GROWTH OF THE MAIN BALANCE SHEET FIGURES ASSETS LOANS +5.2% +4.4% +5.5% +4.2% 1 734 1 750 1 711 1 663 1 670 1 173 1 186 1 609 1 600 1 631 1 136 1 142 1 163 1 577 1 090 1 108 1 105 1 097 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16
Slide 27: Alior Bank Continues Its Market Share Expansion
ALIOR BANK CONTINUES ITS MARKET SHARE EXPANSION MARKET SHARE DEPOSITS LOANS 5.1% 5.2% 5.1% 5.1% 4.0% 3.7% Q2'16 Q1'17 Q2'17 Q2'16 Q1'17 Q2'17 Alior’s deposits as well as gross loans according to published financial statements. Non financial loans for sector loans data. QUARTERLY GROWTH (%) DEPOSITS
Slide 28: Alior Bank Income Statement Snapshot
ALIOR BANK INCOME STATEMENT SNAPSHOT in PLN m Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Interest income 694 724 858 867 893 Interest expense -250 -233 -259 -206 -173 Net interest income 444 491 599 661 719 Dividend 0 0 0 0 0 Fee and commission income 137 135 180 195 209 Fee and commission expense -61 -59 -89 -7
Slide 29: Alior Bank Balance Sheet Snapshot
ALIOR BANK BALANCE SHEET SNAPSHOT 30 Jun’16 30 Sep’16 31 Dec’16 31 Mar’17 30 Jun’17 Cash and balances with Central Bank 726 1 285 1 083 1 781 2 377 Financial assets held for trading 402 310 420 387 421 Financial assets available for sale 8 505 5 394 9 358 6 517 6 469 Investment securities held to ma
Slide 30: Alior Bank Shareholding
ALIOR BANK SHAREHOLDING LARGEST FREE FLOAT AMONG POLISH FINANCIAL INSTITUTIONS 31.33% PZU SA* 59.73% Free float 8.94% Aviva OFE Aviva BZWBK** * based on the information presented in the current report no 36/2017. ** based on the number of shares registered on Ordinary GSM which took place on June 29
Slide 31: Alior Bank New Loans Sales in Retail & SME
ALIOR BANK NEW LOANS SALES IN RETAIL & SME RETAIL LOANS (NEW PRODUCTION PER QUARTER) 2 705 2 850 2 819 2 270 2 273 2 415 79 Other retail 2 010 2 253 78 52 44 49 55 70 591 491 1 530 46 550 Mortgages 529 459 456 481 55 556 526 2 077 2 179 2 277 Cash loans 1 697 1 765 1 742 1 865 1 407 949 Q2'15 Q3'15
Slide 32: Alior Bank Customer Base
ALIOR BANK CUSTOMER BASE (in thousands) 4 115 3 928 188 183 3 213 Corporate clients 133 Retail clients 3 927 3 745 3 080 Q2’16 Q4’16 Q2'17 Slight decrease in number of clients in Q2’17 is of technical nature as a result of new definition of active client. 32
Slide 33: Alior Bank Headcount
ALIOR BANK HEADCOUNT FTEs EVOLUTION -7.4% ; -757 -5.3% ; -531 10 245 10 019 9 488 4 417 3 792 3 531 Outlets Headquaters 5 828 6 227 5 957 2016 Q1'17 Q2'17 33
Slide 34: 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 34
Slide 35: 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 interim condensed consolidated financial stat
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