Alior Bank Sa · GPW:ALR
Alior Bank Sa — Q3 2023 Earnings Presentation
47 slides from Alior Bank Sa's earnings presentation, Oct 30, 2023
Slide 1: Presentation of results for 3Q'23
Presentation of results for 3Q’23 Warsaw, October 26, 2023
Slide 2: Agenda
Agenda 1. Operating activities 2. Credit risk 3. Financial results 4. Other issues 2
Slide 3: Operating activities
3 Operating activities
Slide 4: Another record-breaking quarterly result for Alior Bank
Another record-breaking quarterly result for Alior Bank Total revenues (PLN mn) +591 mn (+16%) +158 mn (+12%) In 1-3Q’23 revenues amounted to PLN bn 4.164 4 175 1 341 1 450 1 385 • net interest income PLN bn 3.483 (+44% y/y) 3 584 11 1 292 1 322 11 • net fees and commissions PLN mn 597 (-3% y/y) 525
Slide 5: Record-breaking quarter: improved efficiency, profitability, and portfolio quality
Record-breaking quarter for Alior Bank - improved efficiency, profitability, and portfolio quality Assets (PLN bn) Gross Loans (PLN bn) Gross Performing Loans* (PLN bn) +3% +1% +3% 86,3 63,7 64,4 58,3 84,1 56,6 3Q 22 3Q 23 3Q 22 3Q 23 3Q 22 3Q 23 C/I 3Q’23 ROE 3Q’23 COR 3Q’23 33.4% 27.9% 0.96% -26.2
Slide 6: Good quarter for the Retail Customer segment
RETAIL Good quarter for the Retail Customer segment CUSTOMERS Alior Bank provided all clients with access to Alior Pay. Due to this innovative solution Alior Bank’s retail customer account holders may benefit from the option to defer transactions made on their account through the mobile app. Since J
Slide 7: Growth of the Bank's key products – mortgage loans
RETAIL Growth of the Bank’s key products – mortgage loans* CUSTOMERS Sale of mortgage loans (PLN bn) Number of Customers with a mortgage loan (k) +125% +2% 1,40 +65% 1,20 0,99 75,3 75,0 74,7 75,1 76,5 1,00 0,60 0,80 0,60 0,44 0,38 0,39 0,40 3Q 22 4Q 22 1Q 23 2Q 23 3Q 23 0,20 0,00 3Q 22 4Q 22 1Q 23 2
Slide 8: First Home Program: 2% Safe Mortgage
RETAIL Alior remains a significant market participant for products associated with the First Home CUSTOMERS Program 2% Safe Mortgage Alior Bank, since the first day of the First Home Program, maintains high levels of interest in the offer and increases new sales volumes. BK2% APPLICATIONS VOLUME OF
Slide 9: Growth of the Bank's key products – cash loans
RETAIL Growth of the Bank’s key products – cash loans* CUSTOMERS Sales of loans (PLN bn) +14% Number of Customers with a loan (k) -12% -2% 1,60 1,69 1,49 397 392 390 392 391 1,30 1,32 3Q 22 4Q 22 1Q 23 2Q 23 3Q 23 3Q 22 4Q 22 1Q 23 2Q 23 3Q 23 Gross consumer loan portfolio (PLN bn) -6% We continue w
Slide 10: Growth of the Bank's key products – Consumer Finance loans
RETAIL Growth of the Bank’s key products – Consumer Finance (CF) loans CUSTOMERS Sales of CF loans (PLN bn) Number of CF Customers (k) +21% +2% +21% 1,42 1 600 1 349 1 367 1 372 1 282 1 318 1,18 1 400 1,17 1,17 1 200 1 000 0,73 800 600 400 200 0 3Q 22 4Q 22 1Q 23 2Q 23 3Q 23 3Q 22 4Q 22 1Q 23 2Q 23
Slide 11: Effective establishment of a lasting relationship with Customers
RETAIL Effective establishment of a lasting relationship with Customers CUSTOMERS Number of Individual Customers (mn) Number of accounts “Konto Jakże Osobiste” (k) +2% +20% 700 732 636 670 4,20 610 4,13 4,16 4,10 4,14 3Q 22 4Q 22 1Q 23 2Q 23 3Q 23 3Q 22 4Q 22 1Q 23 2Q 23 3Q 23 Number of motorway jou
Slide 12: Growing importance of digital channels
RETAIL Growing importance of digital channels CUSTOMERS Users of Alior Bank mobile applications (k) Number of wire transfers initiated in the Alior Mobile application (mn) +18% +25% 15,5 1 200 1 006 1 042 15,2 928 968 13,5 14,3 1 000 882 12,4 800 600 400 200 0 3Q 22 4Q 22 1Q 23 2Q 23 3Q 23 3Q 22 4Q
Slide 13: Very good results of the Business Customer segment
BUSINESS Very good results of the Business Customer segment CUSTOMERS REVENUE AFTER COST OF NEW CREDIT LIMIT Y/Y NPL Y/Y RISK Y/Y +20% +9% -2.35 p.p. PLN bn 7.9 in 1-3Q’23 * • Over 5% market share in commitments up to PLN mn 20 • We have 8% market share in commitments up to PLN mn 1 for the self-emp
Slide 14: Rising trend in key efficiency indicators
BUSINESS Rising trend in key efficiency indicators CUSTOMERS Share of automatic decisions in new sales (Small segment) % of orders executed remotely +7 p.p. +19 p.p. 63% 61% 59% 57% 54% 50% 48% 48% 44% 45% III kw.22 3Q 22 IV 4Qkw.22 22 I1Q kw.23 23 II 2Q kw.23 23 III 3Qkw.23 23 III 3Qkw.22 22 IV kw.
Slide 15: Improvement in portfolio structure with increase in market share
BUSINESS An improvement in the portfolio structure with a simultaneous increase in market share CUSTOMERS Total balance of assets Small/Medium/Large (PLN bn) Change in performing portfolio volume y/y by commitment* -1% 13,5 29,5% 13,4 13,4 13,4 18,9% 13,0 10,9% 3,5% 3,5% -0,9% III 3Qkw.22 22 IV 4Qkw
Slide 16: Alior Bank – Digital Leader
Alior Bank – Digital Leader Alior Pay for all Alior Bank Customers FX Exchange – BLIK currency exchange The „Kantor Walutowy” (FX Exchange) product has an added The first Customers could use the service since December 2022. In following months, functionality to quickly purchase currency through the
Slide 17: Innovative implementations
Innovative implementations ALIOR PAY „START WITH PLN 400” CAMPAIGN ACCOUNT FOR YOUTH PROMOTION Alior Bank provided access to Entrepreneurs under self- The campaign focuses on Alior Pay to all Customers. ownership („JDG”) who benefits for teenagers such as Due to this innovative solution open an iKon
Slide 18: Social responsibility of Alior Bank
Social responsibility of Alior Bank Business mornings with Alior Bank „From darkness to light” • Autumn business breakfasts with • In Warsaw’s Łazienki park we could visit entrepreneurs. „From darkness to light„ exposition, • Meeting topics: macroeconomic situation, Polish which was made possible th
Slide 19: Customers and the market appreciate services and changes in Alior Bank
Customers and the market appreciate services and changes in Alior Bank Alior Bank won in „Best implementations in electronic banking” category in e-Commerce The highest long-term rating in the Bank’s history Polska Awards. The jury distinguished the bank for BB+ from S&P rating agency is confirmatio
Slide 20: ESG activities in Alior Bank
ESG activities in Alior Bank Selected activities in 3Q’23 Environment Social Governance • We worked on updating • We continued ONA (She) our ESG strategy initiative • We initiated cooperation with an ESG rating agency • We implemented the „Eco • We implemented a diversity and prepared for Loan” prod
Slide 21: Credit risk
21 Credit risk
Slide 22: Stable and secure position: capital and liquidity above regulatory minimum
Stable and secure position of the Bank: capital and liquidity surplus significantly above the regulatory minimum TIER I* The levels of TIER I and TCR capital adequacy ratios as at the end 15,86% of 3Q’23 significantly exceed the regulatory minimum by 721 bps 14,26% 14,16% (PLN bn 3.5) and 603 bps (P
Slide 23: Effective transformation of credit risk of Alior Bank Group
Effective transformation of credit risk of Alior Bank Group Default Rate (%) 5,1% Default rate 4,4% effectively 1 Credit quality 3,3% decreased and transformation 2,7% 2,5%* resilient to macro turbulences 2019 2020 2021 2022 3Q 23 Share of mortgage loans(%) 29,0% 28,3% Significant 26,6% 23,8% increa
Slide 24: Alior Bank consistently increases portfolio quality and decreases cost of risk
Alior Bank consistently increases portfolio quality and decreases cost of risk Alior Bank Group – cost of risk Alior Bank Group – NPL ratio 2500 2,39% 2,80% 2000 14,48% 1,60% 1,51% * 13,16% 1500 1,39% 1,16% 11,77% 1000 1 733 1 437 500 1 007 950 9,80% 549 9,39% 0 2019 2020 2021 2022 1-3Q 23 2019 2020
Slide 25: Changes in credit portfolio management have brought tangible results
Changes in credit portfolio management have brought tangible results Impaired loans (PLN bn) NPL reserve coverage ratio* Cost of Risk - CoR** 1,64% 1,61% 0% 1,57% 8 10,98% 1,43%*** 0% 8 7 9,80% 9,80% 0% 9,45% 7 57,3% 1,15% *** 9,39% 53,7% 53,7% 53,1% 54,1% 6,79 6 0% 6 0,95% 5,89 5,88 5,69 5,75 0,96%
Slide 26: Financial results
26 Financial results
Slide 27: Income statement
Income statement PLN mn 3Q 22 3Q 23 % y/y y/y 1-3Q 22 1-3Q 23 % y/y y/y Total Income 766,5 1 449,6 89% 683,0 3 059,5 4 164,3 36% 1 104,8 Net interest income 586,7 1 219,2 108% 632,6 2 420,8 3 483,2 44% 1 062,4 Net fee and commission income 201,6 172,3 -15% -29,3 612,9 597,0 -3% -15,9 Other income -2
Slide 28: NIM increased due to improvement in portfolio and asset profitability
NIM increased due to an improvement in portfolio and financial asset profitability Interest income and expenses (PLN mn) Interest margin and financing cost* +35% +10% 5,81% 5,87% +3% 5 543 1 887 6,05% 6,16% 11 1 812 1 821 1 835 5,92% 5,81% 1 708 1 231 355 408 401 423 4 103 Other Interest Income 329
Slide 29: Fees and commissions income impacted by FX transaction settlements
The reported fees and commissions income was impacted by the nature of FX transaction settlements Net Fees and Commissions Income (PLN mn) -15% -3% -20% 216 613 597 Bank accounts, transfers, cash 209 202 -8% y/y operations (net) 41 183 41 172 +1% y/y 136 125 43 Bancassurance (net) 42 24 +8% y/y 22 4
Slide 30: Maintaining operational efficiency despite inflationary cost pressure
The Bank is maintaining operational efficiency, despite growing inflationary pressure on costs Operating costs (PLN mn) C/I ratio** +6% -4% -1% 1 541 507 490 59,5% C/I normalized*** 1 480 484 - Koszty 456 457 58 1 53 C/I reported 59 pracownicze 8 1 68 62 214 53 - 194 66 65 97 Koszty ogólnego 19 zarz
Slide 31: Main financial targets of the strategy
The main financial targets of the strategy „Your Bank of everyday life, your Bank for the future” Profitability 9M 2023 2024 ROE 26.2% >13% C/I 35.5% <45% Equity Tier 1 15.9% >13.5% TCR 16.7% >15% Credit risk CoR 1.2% <1.6% NPL 9.4% <10% 31
Slide 32: Why Alior Bank?
Why Alior Bank? ▪ Safe and stable capital position ▪ High NIM ▪ Innovation, digitization, high quality of services for Customers ▪ High performance due to an increase in revenue and cost optimalization ▪ Improvement in the loan portfolio quality ▪ Consumer Finance market leader ▪ Growing share of ho
Slide 33: Other issues
33 Other issues
Slide 34: Polish economy in the trough of the contraction phase
Polish economy in the trough of the contraction phase, inflation is decreasing In 1H’23 Poland was in a recession from a y/y perspective In 3Q’23 manufacturing and consumer demand are slowly rebounding GDP growth (real, %, y/y) and its structure (p.p.) Key domestic data, Poland 140 (Dec'19=100, sa,
Slide 35: Global surroundings of the Polish economy remain challenging
The global surroundings of the Polish economy remain challenging with a relatively strong job market Increase in the concern of recession in the USA and Eurozone Downturn in activity supports a global decrease in inflation 75 PMI Composite 20 CPI (%, y/y) 15 65 10 55 5 45 0 35 -5 Oct-20 Mar-21 Aug-2
Slide 36: We are entering a period of economic revival
We are entering a period of economic revival In 2023 GDP will increase due to a better second half of the year Inflation and interest rates will decrease CPI and interest rate GDP growth with main components 16,0 8,0 6,9 7,0 14,0 6,0 5,1 12,0 5,0 3,8 4,0 3,2 10,0 3,0 2,0 0,5 8,0 1,0 0,0 6,0 -1,0 6,7
Slide 37: One-offs affecting reported results of Alior Bank Group
One-offs affecting reported results of Alior Bank Group Impact on Impact on 2022 (PLN mn) gross profit net profit 1Q Non-financial assets write-off related to the operations of Bank's branch in Romania -31 -31 -27 -27 2Q Joining the Protection Scheme (IPS) -195 -195 -158 -158 Provision for cost of c
Slide 38: Alior Bank's investment services
Alior Bank’s investment services Alior Bank’s Brokerage House Alior TFI Since the beginning of the year trading of shares decreased In 3Q’23 Alior TFI maintained a substantial increase in assets, by 10% v. 2022 and the share of Individual Investors similar in magnitude to the increase in the previou
Slide 39: Activities of Alior Leasing
Activities of Alior Leasing Sale of lease and loans (PLN bn) Number of customers (k) Lease portfolio and loans (PLN bn) -24% -6% -28% +9% -6% +44% +23% 74,3 6,0 6,0 2,3 +24% 68,3 69,9 65,5 5,8 2,1 2,0 55,4 1,6 1,6 5,4 5,0 1-3Q 19 1-3Q 20 1-3Q 21 1-3Q 22 1-3Q 23 2019 2020 2021 2022 3Q'23 2019 2020 20
Slide 40: Gross structure of the loan portfolio
Gross structure of the loan portfolio Loan portfolio in total (PLN mn) Retail Customer Segment (PLN mn) Business Customer Segment* (PLN mn) +1% 0% +2% +3% 3% +2% 37 933 36 913 38 046 25 743 25 784 26 375 63 676 62 697 64 421 4 277 4 089 4 369 6 170 6 212 6 509 25 743 26 375 279 25 784 15 937 16 999
Slide 41: Deposit portfolio structure
The Bank adjusts its deposit portfolio to the current market situation (PLN mn) Structure of net liabilities to Customers Net liabilities structure - Retail Segment Net liabilities structure - Business Segment +1% -2% +8% +3% +3% +4% 72 363 70 706 72 868 1 255 2 102 2 172 51 733 50 635 21 362 22 232
Slide 42: Consolidated statement of the financial standing
Consolidated statement of the financial standing of the Alior Bank Group (PLN mn) 3Q 22 4Q 22 1Q 23 2Q 23 3Q 23 % q/q q/q % y/y y/y Total assets 84 070,7 82 877,2 84 325,2 83 527,5 86 320,5 3% 2 793,1 3% 2 249,9 Cash and cash equivalents 5 428,9 2 584,1 4 578,0 3 167,6 3 819,9 21% 652,3 -30% -1 609,
Slide 43: New sale of loans
New sale of loans (PLN mn) Sales in the Business Customer Segment* -5% -29% 3 069 2 833 2 432 2 414 1 197 2 196 2 276 2 082 2 103 1 999 691 1 424 1 823 628 1 137 603 1 455 754 1 516 886 -26% y/y 1 194 562 1 741 1 872 1 568 1 409 1 220 1 328 1 277 893 909 760 1 113 +22% y/y 1Q 21 2Q 21 3Q 21 4Q 21 1Q
Slide 44: Additional information
Additional information Employment (FTEs) Alior Bank’s branches +114 +2% -25 +108 -5% +2% -1 -0% 7 074 7 150 7 036 7 055 7 041 548 534 526 524 523 482 482 519 476 488 110 70 72 71 190 188 187 186 183 150 2 6 410 6 482 6 504 6 482 6 560 356 346 339 338 340 3Q 22 4Q 22 1Q 23 2Q 23 3Q 23 3Q 22 4Q 22 1Q
Slide 45: Alior Bank S.A. - quotations, shareholding structure, ratings
Alior Bank S.A. - quotations, shareholding structure, ratings Alior Bank’s share price compared to WSE indices (comparable data for 12 months) Alior Bank share price: PLN 51.80 60 (data as of September 29, 2023) Capitalization: PLN bn 6.8 +124,0% y/y Value of shares in free float: PLN bn 3.0 50 P/BV
Slide 46: Contact
Contact Contact data Investor Relations and Subsidiaries Supervison Department Address details e-mail: ir@alior.pl Alior Bank S.A. Investor Relations and Subsidiaries Supervision Department ul. Łopuszańska 38D 02-232 Warsaw Poland More information Website Following events: Facebook fanpage Twitter p
Slide 47: Disclaimer
Disclaimer This data has been prepared by Alior Bank S.A. (“Bank”, “Company”) solely for the purpose of the Presentation. Any and all data that may constitute a projection for the Company’s future economic and financial results, contained in this presentation, has been prepared based on the Report o