Alior Bank Sa · GPW:ALR
Alior Bank Sa — Merger or Acquisition (2016)
18 slides from Alior Bank Sa's merger presentation, 2016
Slide 1: Acquisition of Core Bank BPH
Acquisition of Core Bank BPH 0
Slide 2: Transaction Highlights
TRANSACTION HIGHLIGHTS Acquisition of 87% of Core Bank BPH from GE with c.PLN8.5bn of net loans (excluding, inter alia, entire mortgage portfolio – PLN, CHF and other currencies, and BPH TFI) and PLN1,646m TBV, valuing Core Bank at PLN1,532m (implied P/TBV of 0.93x). The proposed price assumes add
Slide 3: Core Bank BPH – Highly Synergistic Asset
CORE BANK BPH – HIGHLY SYNERGISTIC ASSET Core Bank BPH (estimated as at 30-Sep-2015) Core Bank BPH: Bank BPH excluding the entire c. PLN 1,646m mortgage portfolio (PLN, CHF and other Tangible Equity Value currencies), related parent funding, and assets @ 13.25% Tier 1 ratio and liabilities related
Slide 4: Acquisition of Core Bank BPH for PLN1,532m
ACQUISITION OF CORE BANK BPH FOR PLN1,532M TRANSACTION STRUCTURE (1/3) 1 Current Situation Acquisition Overview The purchase price for 87,23% interest in Core Bank BPH held Alior Free BPH Free by GE amounts to PLN 1,225 m subject to adjustments1 PZU GE Float Float Valuation of 100% Core Bank BPH
Slide 5: Rights Issue to Finance the Acquisition and Support Capital Position
RIGHTS ISSUE TO FINANCE THE ACQUISITION AND SUPPORT CAPITAL POSITION TRANSACTION STRUCTURE (2/3) 3 Rights Issue Rights Issue Overview Size of the rights issue to be announced shortly The final number of shares to be issued in the rights issue Alior Free Float PZU and the issue price will be dete
Slide 6: Tender Offer & Demerger – Execution Stage
TENDER OFFER & DEMERGER – EXECUTION STAGE TRANSACTION STRUCTURE (3/3) 4 Tender Offer Transaction Structure Overview Shares Transaction via a Tender Offer for Bank BPH shares, with a subsequent demerger of Core Bank BPH. Alior’s shares in Bank Consideration BPH will cease to exist Shares After th
Slide 7: Strong Strategic Rationale
STRONG STRATEGIC RATIONALE 1 Build critical mass Delivering on strategy to become a top 5-6 player in Poland Addition of c.PLN8.5bn of higher margin loans, strengthening Alior’s market position in its key segments Further strengthening position in Consumer Lending (currently #2) 2 Significant
Slide 8: In Search of Higher Return, Banks Are Acquiring Critical Mass Through Consolidation
1 IN SEARCH OF HIGHER RETURN, BANKS ARE ACQUIRING CRITICAL MASS THROUGH CONSOLIDATION M&A Deals in Poland €0.5bn €5.2bn €0.1bn €0.6bn €1.1bn 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 ? Dec-09 Dec-15 €1.0bn # of Commercial €0.4bn 49 38 Banks in Poland Top 5 Banks (by €0.3m €0.7bn 44% 49% Asse
Slide 9: Transaction Will Lead to a Significant Increase of Alior's Portfolio
1 TRANSACTION WILL LEAD TO A SIGNIFICANT INCREASE OF ALIOR’S PORTFOLIO Core Bank BPH PLNbn Alior (2015) (Q3 2015)¹ Combined* Net Loans PLN 30.9bn c. PLN 8.5bn c. PLN 39.4bn Deposits PLN 33.7bn c. PLN 12.1bn c. PLN 45.8bn Operating Income PLN 2.2bn c. PLN 1.0bn (annualised) c. PLN 3.2bn Customers 2.7
Slide 10: Combined Entity Becomes #9 Bank in Poland with Potential to Reach #6
1 COMBINED ENTITY BECOMES #9 BANK IN POLAND WITH POTENTIAL TO REACH #6 IN NEAR FUTURE Assets No Bank (2015 in PLN bn) 1 PKOBP 267 2 Pekao 169 3 BZWBK 140 4 mBank 124 5 ING 109 6 71 7 Millennium 66 8 BGŻBNP 65 9 Alior + Core 53** 10 Handlowy 50 Alior 40 11** Deutsche Bank 38 Excluding banks not quote
Slide 11: Maintaining Superior Net Interest Margin
1 MAINTAINING SUPERIOR NET INTEREST MARGIN Alior NIM development (YTD) 4.7% 4.6% 4.6% 4.5% 4.5% Market Average 2.7% 2014 Q1'15 1H'15 Q3'15 2015 Alior has currently a superior NIM when compared to the market. Core Bank BPH has a similar business focus and as such also an attractive NIM profile (4.5%*
Slide 12: Significant Synergy Potential Identified
2 SIGNIFICANT SYNERGY POTENTIAL IDENTIFIED… Identified pre-tax synergies of c. PLN 300 m in addition to PLN 160 m of savings from announced Business Transformation Plan Cost / Income Ratio Pre-Tax Synergies PLNbn 100% (16)% 84% (30)% 54% 25% Achieved in 2017 Phasing > 80% Achieved in 2018 Full Run-r
Slide 13: Allowing Alior to Sustain Its Market Leading Cost/Income Ratio
2 … ALLOWING ALIOR TO SUSTAIN ITS MARKET LEADING COST/INCOME RATIO, WHILST GROWING MATERIALLY Cost / Income Ratio of Polish Banks 96 % 85 % 72 % 68 % 59 % 52 % 53 % 55 % 48 % 48 % 50 % 45 % 46 % Core Bank BPH Core Bank BPH incl. Business incl. Business Transformation Transformation Plan & Plan Syner
Slide 14: Changes in Business Model Will Drive Down the Cost Base
2 CHANGES IN BUSINESS MODEL WILL DRIVE DOWN THE COST BASE Ratios Alior Core Bank BPH Customers / FTEs 420 140 Customers / 8,152 4,200 Branches The new Alior will have top 3-4 distribution network in Poland Note: Expected post implementation of Business Transformation Plan figures for Core Bank BPH;
Slide 15: Meritum Experience Proves Achievability of Synergies
2 MERITUM EXPERIENCE PROVES ACHIEVABILITY OF SYNERGIES Operational merger concluded on Oct 26th Our integration with Meritum was the fastest on the Polish market Integration costs amounted to c.PLN35m 2015 synergies of c.PLN38m neutralized integration cost impact 0 3 6 9 12 15 18 21 24 27 30
Slide 16: Estimated Capital Impact of Transaction and Capital Increase
ESTIMATED CAPITAL IMPACT OF TRANSACTION AND CAPITAL INCREASE Target capital levels with 50bps buffer to the regulatory minimum Target Capital Ratios >13.75%¹ Targeted estimated Tier 1 ratio above 10.75% post 12.5% transaction Targeted estimated CAR of above 13.75% post transaction Consideratio
Slide 17: Key Takeaways
KEY TAKEAWAYS 1 Acquisition of Core Bank BPH is a transformational transaction in line with Alior’s ambition to become a top 5-6 bank in Poland 2 Attractive economics will deliver significant returns in medium term 3 Complementary geographical structure Country-wide footprint (top 4-5 distribution
Slide 18: Disclaimer
DISCLAIMER This presentation (the ”Presentation”) has been prepared by Alior Bank S.A. (“Alior”, the “Bank”) solely for use by its clients and shareholders or analysts. This material is for informational purposes only and under no circumstances shall constitute an offer or invitation to make an offe