Ab Artea Bankas · OMXVSE:ROE1L
Ab Artea Bankas — Šiaulių Bankas — Q1 2024 Earnings Presentation
35 slides from Ab Artea Bankas's earnings presentation, Apr 29, 2024
Slide 1: Q1'24 Financial Results
Šiaulių Bankas Q1‘24 Financial Results April 29, 2024
Slide 2: Another Strong Quarter: Q1'24 Net Profit Up 17% YoY
Another Strong Quarter: Šiaulių Bankas Reports Q1'24 Earnings With Net Profit Up 17% YoY NET PROFIT € 22.5m ▪ Strong revenue growth driven by both net interest income and net fee & commission income RETURN ON EQUITY ▪ Solid RoE delivered, demonstrating effective capital management and continued shar
Slide 3: Q1'24 Business Segment Highlights
Q1’24 Business Segment Highlights Corporate Private Investment ▪ €200m Renovation Fund ▪ Unlocking Growth Potential ▪ Record High AuM Šiaulių Bankas established a new €200 million Empowered our sales network with SB Asset Management surpassed €1.25bn fund together with European Investment Bank expan
Slide 4: Macroeconomic Overview
Macroeconomic Overview Section I
Slide 5: Lithuania's economy is relatively well-prepared to catch recovering external demand
Lithuania's economy is relatively well-prepared to catch the first waves of the recovering external demand Economic Sentiment Indicator, (sa, 3-month MA smoothing) Real GDP, annual change, % (average = 100) 7.1 125 5.6 5.5 120 EA DE EE LV 4.2 4.0 115 LT PL SE 3.1 2.5 110 2.4 2.2 1.5 1.6 1.3 105 0.7
Slide 6: Labour market demonstrates resilience against cyclical challenges
Labour market demonstrates resilience against cyclical challenges Registered unemployed and vacancies per month, thou 45 Number of new vacancies 40 Number of the registered unemployed 35 30 25 20 15 10 5 0 2023-12 2021-01 2021-06 2021-11 2022-04 2022-09 2023-02 2023-07 UNEMPLOYMENT AVERAGE GROSS MON
Slide 7: Economic recovery will benefit from a pick-up in private consumption
Economic recovery will benefit from a pick-up in private consumption, aided by easing inflation and improved purchasing power of households Consumer Confidence Indicator (3-month MA smoothing) 10 EA DE EE 5 LV LT PL LT PL 0 SE -5 SE -10 LV DE -15 EA -20 -25 -30 -35 EE -40 2021-01 2021-08 2022-03 202
Slide 8: Major sectors gear up for recovery
Major sectors gear up for recovery Manufacturing production at constant prices, annual change, % 25 20 Manufacturing 15 Manufacturing (excl. mineral products) 10 4.5 5 3.5 0 -1.8 -5 -10 -15 -20 2022-01 2022-07 2023-01 2023-07 2024-01 • ITC services, civil-engineering construction works, finance and
Slide 9: Key Macroeconomic Highlights
Key Macroeconomic Highlights Despite the external woes, Lithuania‘s economy demonstrates resilience yielding the most robust results in the region ▪ The external demand is expected to remain sluggish in the first half of 2024, but it will gather pace later in the year, injecting energy Lithuania's m
Slide 10: Q1 2024 Financial Results
Q1 2024 Financial Results Section II
Slide 11: Financial Performance Highlights
Financial Performance Highlights Income Statement In €'m Q1'24 Q1'23 %∆ ▪ Net interest income (NII) continue to grow mainly from an Net Interest Income 39.6 35.4 12% expanding loan portfolio Net Fee & Commission Income 6.5 4.6 40% ▪ With the first full quarter after the merger with INVL Retail, net
Slide 12: Loan Portfolio
Loan Portfolio Key Highlights Loan Book and Yield Dynamics +13% 3,100 3,045 ▪ The loan portfolio expanded by 4% since the last quarter and by 13% in 13.0% the past year. This growth was largely driven by strong originations in 3,000 2,932 11.0% our corporate banking segment 2,895 2,900 9.0% 2,791 7.
Slide 13: Net Interest Income
Net Interest Income Key Highlights Net Interest Income (€’m) ▪ Net interest income increased by +12% 12% in Q1’24, compared to the same period last year 40.0 40.5 40.7 39.6 ▪ The increase was driven by both 35.4 growing loan portfolio and higher net interest margin (NIM) ▪ Asset yields peaked and st
Slide 14: Net Fee & Commission Income
Net Fee & Commission Income Key Highlights Net Fee & Commission Income (€’m) ▪ Net fee & commission income (NFCI) surged by 40% year-over-year, driven primarily by the acquisition of INVL Retail business (asset management and life insurance) ▪ Excluding the acquisition impact, NFCI increased by heal
Slide 15: Operating Expenses
Operating Expenses (1) Key Highlights Operating Expenses Structure(1) ▪ Operating expenses increased year-over-year, driven largely by increasing headcount following the merger with INVL Retail and overall inflationary pressures Other ▪ Increased IT spend and a higher D&A charge drove an increase in
Slide 16: Funding
Funding Key Highlights Funding Portfolio Breakdown (Mar-2024) Cost of Funding Other 8% 2.5% ▪ The deposit portfolio maintained Wholesale 2.2% strong growth in Q1, reaching Funding Term Deposits 15% 1.4% 1.8% €3.3 billion 34% 1.0% ▪ This growth reflects a continued €4,923m 1.7% 2.0% 1.7% shift by cus
Slide 17: Loan Portfolio Quality
Loan Portfolio Quality Key Highlights Gross Value of NPEs Loans (€’m) 110.0 7.0% 100.0 6.0% ▪ Cost of Risk decreased slightly year-on-year compared to Q1’23 85.3 86.6 90.0 84.4 5.0% 78.7 79.2 ▪ In Q1’24, allowance for impairment losses largely attributable to revised 80.0 3.0% 4.0% 2.9% 2.7% 2.8% 2.
Slide 18: Capital and Liquidity Position
Capital and Liquidity Position Key Highlights Capital Adequacy Ratio (CAR) 21.3% 20.7% 21.1% ▪ Capital position remains strong, even after the distribution of record- 19.0% 19.6% 18.1% high dividends in Q1’24 and factoring in the new buyback program 17.7% 17.8% 16.6% 16.7% 16.7% 16.7% ▪ The increase
Slide 19: Update on Capital Allocation: New Share Buyback Program Planned
Update on Capital Allocation: New Share Buyback Program Planned Share Buybacks Dividends Share Organic Buybacks Growth ▪ The bank has submitted an ▪ Record-high dividend of €0.0485 application to the ECB for a share per share (representing a payout buyback of up to €11.5 million of 42.6%) was paid o
Slide 20: Strong Momentum in Asset Management Business: AuM Crosses €1.25bn
Strong Momentum in Asset Management Business: AuM Crosses €1.25bn Mark ▪ Asset management AuM reached a +79% new high mark of €1.27bn at the end of Q1’24 1,272 ▪ The increase was driven by strong 1,174 79 investment returns and new client 71 136 inflows in Pillar II funds 123 930 939 ▪ Pillar II pen
Slide 21: Undisputed Leader In Renovation Financing: New €200 Million Fund
Undisputed Leader In Renovation Financing: The New €200 Million Fund Launched Key Highlights Key Program Benefits Renovation Finance Market Share ▪ Šiaulių Bankas strengthens renovation Living conditions for 11,000 Šiaulių Bankas is a pioneer of innovative financing leadership with a new €200 Lithua
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Slide 23: Appendix
Appendix
Slide 24: Key Investment Highlights of Šiaulių Bankas
Key Investment Highlights of Šiaulių Bankas A Profitably Growing Lithuanian Banking Franchise with New Strategic Expansion Initiatives 1 Operating in a structurally attractive market with strong growth potential 2 Differentiated and diversified business mix 3 A strategic focus on selected lending ar
Slide 25: Key Financial Targets
Key Financial Targets Focus Areas 2024 2025 2026 2027–2029 Growth Loan Book €3.3bn €3.7bn €4.1bn CAGR: ~8% Deposits €3.3bn €3.6bn €4.0bn CAGR: ~10% Total Operating Income €202m €211m €243m CAGR: ~10% Net Fee Income €27m €29m €33m CAGR: ~20% Efficiency C/I ratio 49.7% 53.2% 48.8% Below 47.5% Profitab
Slide 26: Income Statement
Income Statement Q1'24 Q1'23 %∆ In EUR'000 Interest income 59,541 40,010 49% Other similar income 5,940 4,153 43% Interest expense (25,901) (8,769) 195% Net interest income 39,580 35,394 12% Fee and commission income 8,710 6,331 38% Fee and commission expense (2,227) (1,693) 32% Net fee and commissi
Slide 27: Statement of Financial Position
Statement of Financial Position 31 March 2024 31 December 2023 % ∆ 31 March 2023 % ∆ In EUR'000 ASSETS Cash and cash equivalents 675,561 751,499 (10%) 363,329 86% Securities in the trading book 221,928 207,677 7% 60,029 270% Due from other banks 2,629 3,013 (13%) 2,733 (4%) Derivative financial inst
Slide 28: Loan Portfolio Segments Performance
Loan Portfolio Segments Performance Corporate Lending – Portfolio(1) Mortgage – Portfolio Consumer Financing – Portfolio mEUR mEUR mEUR 1,700 7.2% 7.5% 7.1% 7.1% 340 12% 1,600 7.0% 800 6% 6.6% 6.0% 5.9% 300 11% 6.5% 5.8% 1,500 700 5.7% 5% 10.2% 9.6% 6.0% 4.5% 9.9% 9.7% 9.9% 1,400 5.3% 260 10% 600 9.
Slide 29: Šiaulių Bankas Market Share in Lithuania
Šiaulių Bankas Market Share in Lithuania Corporate Lending(1) 21.4% 20.1% 23.5% SEB 26.8% SEB Swedbank Swedbank 9.9% Luminor Luminor Šiaulių Bankas 13.1% Šiaulių Bankas Others Others 28.9% 26.6% 17.5% 12.2% Mortgage(1) 28.9% 27.3% SEB 36.6% 43.8% Šiaulių Bankas Swedbank Other banks Šiaulių Bankas Co
Slide 30: Management Board
Management Board Vytautas Sinius Šiaulių Bankas: Daiva Šorienė Šiaulių Bankas: ▪ Chief Executive Officer of Šiaulių Bankas 12 years ▪ Head of Corporate Clients 25 years ▪ Chairman of the Management Board of ▪ Deputy Chief Executive Officer of Šiaulių Bankas Financial Industry: Financial Industry: Ši
Slide 31: Board of Directors
Board of Directors Valdas Vitkauskas Mindaugas Raila ▪ Chairman of the Supervisory Council of Šiaulių Bankas since August 2022 ▪ Chairman at Willgrow, Girteka Logistics and SIRIN Development ▪ Member of the Supervisory Council of Šiaulių Bankas since June 2022 ▪ Member of the Supervisory Council of
Slide 32: Shareholders
Shareholders 19,087 19,106 18,524 16,573 20.0% 8.9% 48.7% 9,053 7.2% 5,391 5.3% 4,992 4,496 5.0% 4.9% Other investors Algirdas Butkus (Founder) Gintaras Kateiva 2017 2018 2019 2020 2021 2022 2023 2024 Q1 (Early-stage Investor) Number of shareholders 32 Note: (1) Expected shareholders structure after
Slide 33: Total Shareholder Returns & Broker Outlook
Total Shareholder Returns & Broker Outlook 200% +57% 180% +78% +46% 160% € 1.05 € 0.98 140% 120% +14% 100% 80% 60% 40% 20% Swedbank Enlight Research Šiaulių Bankas (SAB1L) 12M Target Price MSCI EM Europe ex Russia NR Index Implied Upside(1) 33 Note: (1) Based on SAB1L share price of €0.67 as of 2024
Slide 34: Šiaulių Bankas – An Award Winning Organisation
Šiaulių Bankas – An Award Winning Organisation Bank of the year, Lithuania 2013; 2015; 2016; 2019; 2021; 2022; 2023 Banking Awards, “Global Finance”: Asset Management Awards (INVL): 2023 Best bank in Lithuania 2023 Refinitiv Lipper Fund Awards - "INVL Baltic Fund” recognised as the best Emerging Eur
Slide 35: Disclaimer
Disclaimer General The material in this presentation has been prepared by AB Šiaulių Bankas (Šiaulių Bankas) and solely for use at this presentation. The information provided in this presentation pertaining to Šiaulių Bankas, its business assets, strategy and operations is for general informational